Jay's Daily News

Chinese official slams banks over derivatives

A senior Chinese official who oversees the country’s largest state-owned enterprises has publicly slammed western investment banks for “maliciously” peddling complicated derivative products that caused huge losses for Chinese companies over the last year.

http://www.ft.com/cms/s/0/9d3ce434-e...nclick_check=1

Interesting read. 24hgold's predictions for 2010. I don't agree with everything in there but it does make one think.

http://www.24hgold.com/english/news-...gand&ref=&mk=1

North Korean currency devalued and replaced.

http://www.timesonline.co.uk/tol/new...cle6940482.ece

US Mint Runs Out Of Tenth-Ounce Gold Coin Inventory Day After Its Release For Broad Purchase

http://www.zerohedge.com/article/us-...broad-purchase

Just got an email from a currency report I subscribe to about this with links to encourage replies to your senators and stuff...

I'm not able to run this down any further atm, but it looks like a thing for US traders to keep an eye on... I'll park the blurb here for future reference and discussion elsewhere if appropriate...

Democrats push $150B stock tax on Wall Street

By Silla Brush - 11/24/09 12:05 PM ET
A House bill still being drafted aims to raise $150 billion each year to pay for new jobs.

Under a bill being drafted by Democratic Reps. Peter DeFazio (Ore.) and Ed Perlmutter (Colo.), the sale and purchase of financial instruments such as stocks, options, derivatives and futures would face a 0.25 percent tax.

The bill, a copy of which was obtained by The Hill, is titled the “Let Wall Street Pay for the Restoration of Main Street Act of 2009....”


http://thehill.com/homenews/house/69...150b-stock-tax

Ushering in the Amero?

By Robert P. Murphy

First under the Bush Administration and even more so under President Obama, the federal government has been seizing power and spending money as it hasn’t done since World War II. But as bold as the Executive Branch has been during this financial crisis, the innovations of Fed chairman Ben Bernanke have been literally unprecedented. Indeed, it is entirely plausible that before Obama leaves office, Americans will be using a new currency.
Bush and Obama have engaged in record peacetime deficit spending; so too did Herbert Hoover and then Franklin Roosevelt (even though in the 1932 election campaign, FDR promised Americans a balanced budget). Bush and Obama approved massive federal interventions into the financial sector, at the behest of their respective Treasury secretaries. Believe it or not, in 1932 the allegedly “do-nothing” Herbert Hoover signed off on the creation of the Reconstruction Finance Corporation (RFC), which was given billions of dollars to prop up unsound financial institutions and make loans to state and local governments. And as with so many other elements of the New Deal, FDR took over and expanded the RFC that had been started under Hoover.
In the past year, the government has seized control of more than half of the nation’s mortgages, it has taken over one of the world’s biggest insurers, it literally controls major car companies, and it is now telling financial institutions how much they can pay their top executives. On top of this, the feds are seeking vast new powers over the nation’s energy markets (through the House Waxman-Markey “Clean Energy and Security Act” and pending Kerry-Boxer companion bill in the Senate) and, of course, are trying to “reform” health care by creating expansive new government programs.
For anyone who thinks free markets are generally more effective at coordinating resources and workers, these incredible assaults on the private sector from the central government surely must translate into a sputtering economy for years. Any one of the above initiatives would have placed a drag on a healthy economy. But to impose the entire packageon an economy that is mired in the worst postwar recession, is a recipe for disaster.

More at http://www.amconmag.com/blog/killing-the-currency/

This was too good a story to let pass completely under radar.


Drugs and crime chief says $352bn in criminal proceeds was effectively laundered by financial institutions

Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.

Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were "the only liquid investment capital" available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

This will raise questions about crime's influence on the economic system at times of crisis. It will also prompt further examination of the banking sector as world leaders, including Barack Obama and Gordon Brown, call for new International Monetary Fund regulations. Speaking from his office in Vienna, Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. "In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor," he said. Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.



http://www.guardian.co.uk/global/200...n-cfief-claims

Small Chinese Company Tells Goldman To Take A Hike, Refuses To Pay $80 Million In Derivatives.

http://www.zerohedge.com/article/sma...ivative-losses

Tuesday, December 29, 2009Credit Card Delinquencies, Chargeoffs Rise Again; Bank of America Has Credit Card Headaches

http://globaleconomicanalysis.blogsp...Trend+Analysis)

So the Greeks have been lying about how much debt they got.

http://www.ft.com/cms/s/0/33b0a48c-f...nclick_check=1 (free signup may be required)

EXECUTIVE ORDERS AND THE CONSTITUTIONAL MILITIA

By: Devvy
January 16, 2010
2009 - NewsWithViews.com

While a bit unusual, this column is going to be audio. Events are happening at hyper speed and I want to talk to you as we go through these items one by one so we can all see the bigger picture.

The Internet has literally been melting down the past week over the second, dangerous Executive Order issued by Marxist Barack Obama. Below are links to the documents I wish to bring to your attention. Not only are these Executive Orders an in your face blueprint for tyranny, the timing is what should concern everyone.

You can click on the audio here to listen.

(Note: By clicking on this link and also dependent on the speed of your Internet connection, this mp3 audio track should download to your computer and open Windows Media Player or other application that you have designated to play this type of content. You may also right click the link and download the entire mp3 file to play in some other application of your choice.)

Please feel free to click on the links below as I cover them or just listen if you prefer and visit the links afterwards.

North Made Plans to Call Martial Law.

'Our civilian-military face-off' (Sacramento Bee, November 30, 1997).

A Primer on Martial Law by Dr. Edwin Vieira
August 31, 2009

H.R. 2655 - The Separation of Powers Restoration Act

Executive Order --- Amending Executive Order 12425 - click here to read

Whitehead's excellent analysis can be read here.

Executive Order Comrade Obama signed January 11, 2010

Establishment of the Council of Governors

Battle Plan for the 50 States - Sept. 22, 2008

John Warner National Defense Authorization Act: Section 1076

Use of the Armed Forces in major public emergencies

Law and Freedom - William J. Olson writings

Executive Orders and National Emergencies:
How Presidents Have Come to "Run the Country" by Usurping Legislative Power

Full Text of Policy Analysis No. 358 (PDF, 29 pgs, 162 Kb)

Dr. Edwin Vieira, Jr. on the Failure of the Public Sector, the Coming Military Crackdown and What Can Be Done to Stop It

Audio - Constitutional Militias

Tea Parties Need Teeth

I'll leave you with a few more items. One is this pdf file. This ad was run the same time I was collecting petition signatures to abolish the privately owned Federal Reserve and IRS; 1993. On September 29, 1993, a grass roots effort under my project delivered one million seven hundred sixty-three thousand signatures plus another 24,000 collected that day at the nation's capitol in Washington, DC.

Congress didn't listen then and they aren't listening now. Business as usual while they are plunder the people's purse as Americans stand in unemployment lines. Those outlaws are rubbing their corruption in our faces.

William Norman Grigg, one of my favorite writers, continues to write hard hitting columns on the growing paramilitarization of law enforcement. Look this picture:

http://www.newswithviews.com/Devvy/i...ponDrawn-a.jpg

"Either fight it now, or get used to this kind of thing: Pennsylvania State Troopers -- one with a drawn assault rifle, his trigger-finger ready -- bracket a terrified driver during a roadblock set up near Pittsburgh following the death of a "comrade" in a domestic shooting. Don't assume for a pico-second that the friendly people in official costumes would resist any opportunity to treat the rest of us like this." Click here to read the column.

Dr. Vieira tried to warn people about the banking collapse back in March, 2005:

Are Monetary & Banking Crises Inevitable in the Near Future?

He's written many more columns as have so many others who understand the end result of fiat currency.

Financial Meltdown will continue

This is underway and no way to stop it no matter how much confetti the Outlaw Congress and Comrade Obama print up and drop from Bernanke's helicopter:

A must watch video (6:20) - This will continue to kill the states because of what is rightly called trickle down economics. It is also why the states must adopt and put into place a sound money system apart from the FED and it's worthless paper (the dollar). "In the United States, a fiscal crisis is hitting states like Arizona, Illinois, Kentucky, California and Virginia. California has a whopping 56% deficit as a percent of its General Fund Budget."

The Second Massive Wave Of Mortgage Defaults

(Note: My new columns are posted regularly on my web site. You can also sign up for my free email alerts. What I can't get done in a column, I use the email alert system.)

Links:

1 - Foreclosures jumped 14% in December over the previous month
2 - More states on budget brink
3 - 25 states forced to borrow $24 billion to continue issuing checks
4 - The Recession Is Over - The Depression Just Beginning
5 - More than seven million households are either behind in their payments or in foreclosure
6 - How nation's true jobless rate is closer to 22%
7 - Detroit destroyed by liberal, "progressive" politicians (short video you should watch; our America in ruins)
8 - Why the Fed Likes Independence
9 - Soaring rate of bankruptcies expected to continue in 2010
10 - Late credit-card payments rise to record
11 - UAW president: rob the people's bank! No, Christmas wasn't good for retailers (as so many of us predicted was going to happen)
12 - December Retail Sales Drop .3 Percent, 2009 Sales See Biggest Drop In 27 Years

2010 - NewsWithViews.com - All Rights Reserved

January 18, 2010

Government Takeover of 401(k)s and IRAs?

Bloomberg reports that the Administration is considering measures to encourage Americans to convert their 401(k)s and IRAs into Government-provided annuities. The story has attracted a lot of negative commentary in the blogosphere:

 

1. Will Collier, Coming Soon: Substituting Government Annuities for Your 401(k)?
2. The International Forecaster, IRA's and 401k's to be Crammed Down While Tax Collections Plunge
3. The Market Ticker, 401k/IRA Screw Job Coming?
4. ROFASix, Is the Government Coming for Your IRA and 401k?

You owe it to yourself to read closely and get inside the collective head of some top traders, economists, and financial prognosticators. I found interesting the few points of disagreement between them.

The link takes you to the site where you can download the original pdf file.

2010: The Big Picture

Tuesday, 19 January 2010
http://futurefastforward.com/financi...-picture-19110

We love gold – but what about the economy, U.S. dollar, and inflation?

And how does one invest with these potential headaches in mind?

We asked a distinguished panel of economists, authors, and advisors what they
expect for 2010.

Caution: >> strong opinions ahead...

Jim Rogers:
is a best-selling author, investor, and American expatriate. He was a co-founder
of the Quantum Fund, a wildly successful hedge fund, and creator of the Rogers
International Commodities Index (RICI).

Marc Faber:
is president of Marc Faber Limited, an investment advisor, fund manager, and
broker/dealer based in Hong Kong , and publishes the widely read
newsletter The Gloom, Boom and Doom Report. He is the author of several
books, including best-seller Tomorrow ’s Gold – Asia’s Age of Discovery, and a
frequent speaker at investment seminars.

Bill Bonner:
is the president and founder of Agora, Inc, a world wide publisher of financial
advice and opinions. He is also the author of the Internet-based Daily
Reckoning and a regular columnist in MoneyWeek magazine.

Jeffrey Christian:
is managing director of CPM Group and a prominent analyst on precious metals
and commodities markets. CPM Group produces a comprehensive yearbook on
gold and silver and provides a wide range of consulting services. He
published Commodities Rising, an investors’ guide to commodities, in 2006.

Peter Schiff:
is president of Euro-Pacific Capital and is currently running for senator in
Connecticut (see Schiffforsenate.com). He is the author of Crash Proof; How to
Profit from the Coming Economic Collapse, and the recently released Crash
Proof 2.0. He’s a frequent guest on CNBC, Fox Business, and others.

David Tice:
is chief portfolio strategist of the Federated Prudent Bear Fund and the
Federated Prudent Global Income Fund. He gained national recognition through
articles he wrote for Barron’s and was the subject of numerous business journals
and television interviews at a time when few dared short the market.

Bob Hoye:
is chief financial strategist of Institutional Advisors, and writes Pivotal Events, a
weekly market overview . His articles have been published by Barron’s, Financial
Post, Financial Times, and National Post.

Dr. Krassimir Petrov:
is an Austrian economist and holds a Ph.D. in economics from Ohio State
University . He was assistant professor in economics at the American University
in Bulgaria , then an associate professor in finance at Prince Sultan University in
Riyadh , Saudi Arabia . He is currently an Associate Professor at Ahlia University
in Manama, Bahrain . He’s been a contributing editor for Agora Financial and
Casey Research.

Clyde Harrison:
is a former pension fund consultant with past partnerships with both Jim Rogers
and Carl Icahn. He’s owed a seat on the Chicago Options Board Exchange and
served as a bank director. He currently serves on the board of Golden Phoenix
Minerals.

Ian Gordon:
entered the financial services industry as a broker in 1983 and started writing
the Long Wave Analyst new sletter in 1998. He accurately predicted the
beginnings of a major bull market in gold in 2000, as well as the recent burst in
the real estate bubble and the subsequent banking crisis. Today, Ian is a leading
interpreter of the Kondratieff Cycle and continues to write his newsletters as the
president of the Long wave Group.

Steve Henningsen:
is a partner at The Wealth Conservancy in Boulder, CO , assisting clients
interested in “ wealth preservation.” And as he cautions, prudently managing
wealth these days “revolves around playing financial chess against the U.S.
government – who keeps changing the rules.”

>>> A lot of people, including the government, believe the worst is behind
us economically.
Do you agree? If not, what should we be on the lookout for in 2010?

Jim Rogers:
It is for the moment, but wait till the next slowdown. You ain’t seen
anything yet. There will be problems in the currency markets in 2010, and more
inflation.

Marc Faber:
The worst is over for now . But the question is about the
sustainability of the improvement in economic conditions and the distribution of
the improvement. The economic condition for the median household in the U.S.
is most likely not going to improve as unemployment stays high and as cost-ofliving
expenses continue to go up, leading to declining real incomes. For Wall
Street and the financial-sector “thieves,” the outlook is bright, as profits
flow to them and losses to the taxpayers.

Bill Bonner:
The worst is still ahead. Stocks should crash. So should U.S.
Treasuries, along with the economy itself.

Jeffrey Christian:
Our primary economic outlook is that the worst is behind us.
We are projecting real GDP growth in the United States of +2.8% for 2010, after
a -2.5% contraction in 2009. Our secondary analysis has a more negative
economic outlook, with a dip into renewed recession prompted by any
combination of a series of domestic and international political developments,
which could derail the fragile recovery now under way. The probability assigned
to the more negative alternative economic scenario is higher than the probability
assigned to such developments in the past, by which we mean that there is a
greater chance that things could go wrong than in the past.

Peter Schiff:
The worst is in front of us, by far. And the worst part of what’s
coming will be the currency crisis. The government has made mistakes – they
prevented deflation, but that’s what we needed. Rather than allowing the market
to correct, they chose to stimulate by printing money. The currency crisis will be
much more devastating than the credit crisis. We’ll have much higher interest
rates and much higher inflation, and when you add these on top of a recession,
we’ll get even higher unemployment. A lot of institutions that were bailed out will
need bailing out again, and the U.S. government itself will need to be bailed out.

David Tice:
I believe that we’re in the “eye of the storm,” and we’re about to
experience another severe leg down. There could be a funding crisis for Treasury
issuance ahead, or more quantitative easing, and certainly higher interest rates.
We think the stimulus has caused a sugar high that’s artificial, and we expect that
the market will fall again in 2010, and the economy will worsen significantly.
Unemployment will go substantially higher.

Bob Hoye:
It is very popular to believe that the worst is behind us – as it was on
the huge rebound after the 1929 crash. There have been five previous great
financial manias, and each was followed by a long credit contraction.
One feature of such a contraction is that the recession starts virtually with the
start of the bear market. Typically, the market tops 10 to 12 months before the
economy does. The Dot-Com Bubble burst in March 2000, and the NBER
[National Bureau of Economic Research] pegged the recession’s start in March
2001.

The stock market peaked in September 1929, and the first recession started that
August. The previous bubble completed in September 1873, and the NBER
determined that the recession started that October. In our example, the stock
market topped in October 2007, and the NBER marked December as the start of
the recession. Close enough.

A good indicator that the contraction has resumed would be high-yield corporate
bonds turning dow in price, with the spread widening relative to long-dated
Treasuries. Our technical research indicates this could happen soon. Another
indicator would be the gold/silver ratio increasing above 66.

Krassimir Petrov:
I’d say that the worst is yet to come. Yes, the government has
inflated the previous (housing) problem by creating an even bigger and more
dangerous bubble – the government finance bubble. When that bubble bursts, it
will get real ugly. Investors should stay focused on two things only: the long
bond and the dollar.

When both start falling and start feeding on each other to the downside, then the
financial markets will learn the true meaning of “ugly.”
However, calling for the bursting of the government finance bubble, like calling
for the bursting of any bubble, is next to impossible: it can burst in two weeks, or
two months, or two years. It is hard to say. I’ll give it a 50% chance of bursting in
2010, and maybe a 45% chance in 2011.

Clyde Harrison:
What you have to watch now is Washington D.C. The center of
finance is no longer Ne w York but Washington , and their decision this year was
to borrow our way out of debt. It’s never worked in the past, and it won’t work
now because they think they’re smarter and speak more articulately. What you w
ant to watch when they lose control of the markets is:
first, the U.S. dollar... if the dollar index breaks below 70, it’s a big warning sign,
and gold will go wild to the upside; and second, the 10-year Treasury... if it goes
above 4%, then you need to turn verycautious because that means we’re going
back into deflation and gold won’t do much for a while.

Ian Gordon:
I certainly do not agree. Things are bad, but they are going to get a
lot worse. It’s the debt, that’s all we need to know . These debt bubbles have
occurred throughout history, and the end result has always been debt deflation.
This debt bubble is without precedent. It is far bigger than all earlier bubbles and
much more international in scope. Thus, the consequences are likely to be more
catastrophic than those experienced following past debt bubble explosions.
So in 2010 we should anticipate that debt will be the principal issue, which will
impact negatively both debt markets and equity markets around the world. The
depression will worsen, with greater vocal opposition to government support of
the principal architects of the problem, mainly the major banks and the central
banks.

Steve Henningsen:
No, for as my 10-year-old son even knows, you don’t cure a
debt problem with more debt. Although the “heart attack” stage is behind us, I
believe we have several years of deleveraging left. This means slow growth (as
compared to the past several decades) as consumers rebuild their balance
sheets, while the government tries to hold up the financial system via FASB
(Financial Accounting Standards Board) rule manipulation, bank coddling,
socializing poor businesses, and in general, letting the Wall Street foxes rule the
roost.

>>> For the U.S. dollar in 2010, do you foresee it continuing to
bounce, resuming its descent, or perhaps trading in a range?
What’s your long-term view of the dollar?

Jim Rogers:
I suspect the rally will continue until we get a lot of bulls. Then the
serious long-term decline resumes.
Marc Faber: The dollar should rebound more against the yen and the euro
because these currencies might have even greater problems. However, long
term I cannot see anything favorable for the U.S. dollar. The problem is that other
paper currencies are not much better. Also, countries are increasingly using
competitive devaluations to export their own problems.

Bill Bonner:
Just a guess... but the dollar looks relatively good in the short run.
There’s a huge demand – thanks to federal government borrowing – and a
restrained, if not falling, supply – thanks to deleveraging. Long term, the dollar is
not a secure currency and not a place where you want to store wealth.
It has lost 97% of its value in the last 100 years...
it will probably take only a few years more to lose another 97%.

Jeffrey Christian:
We expect the dollar’s exchange rate to be extremely volatile
in 2010, moving broadly side ways but with a small upward bias. It is not that we
are bullish on the dollar but rather that we are more bearish on the economic
prospects of Europe, Japan, and the United Kingdom, which are the producers of
the alternative currencies. Thus, we expect the dollar to perform modestly well
against these currencies. For the dollar to fall, these currencies would have to
rise further than they already have, which seems far less likely to us.
We expect the dollar to fall against the Chinese yuan and would not be surprised
to see a one-time official revaluation of the yuan at some point in 2010. We also
expect the dollar to weaken against the currencies of commodities-exporting
countries.

Peter Schiff:
Resuming its descent. We may make it out of 2010 without a
collapse of the dollar – that w ill probably come in 2011 – but it’s coming.
The stimulus buys us some time, but the economy is still going to get
worse in 2010. Unemployment, interest rates, and inflation will all be
higher, so things will gradually get worse until they get catastrophic.

David Tice:
I see the dollar potentially rallying some for the short term, as the
dollar-short is a crowded trade that could easily reverse. Longer term, over the
next 3-5 years, I expect the dollar to continue to fall.

Bob Hoye:
The Dollar Index could continue to rise until the first post-bubble
recession ends. Technically, the Dollar Index has completed a bottoming pattern
that has been a reliable indicator. An intermediate rally could run into February
and after some correction could prevail at least to mid-2010. This would be
against most asset classes resuming their post-bubble troubles.

Krassimir Petrov:
The long term is easy to predict: as long as Ben keeps bailing
everybody out and Congress keeps spending like drunken sailors (I take great
pride in coining the nickname “Helicopter Ben” and having it published first on the
Internet), the long-term trend for the dollar is certainly downward. Yes, we are in
the midst of yet another bear market rally for the dollar, which may be over soon.
And yes, we may even get a second bear market rally late in the year. But the
long-term trend is down. Timing the length of bear market rallies is best left to the
very best and the fools.

Clyde Harrison:
Currencies don’t float, they just sink at different rates. All we’re
seeing in the dollar is a rally against the euro. You will not find that rally when you
go to the grocery store or gas station. Washington will push the pain off into the
future, which means they will print as long as they can get away with it. The
dollar bear market will continue; we’re just in a short-term bounce now.

Ian Gordon:
The problem is that all currencies are tied to paper and therefore
are essentially worthless. It’s only a matter of deciding which is the worst
currency. Unquestionably, that is the dollar, because the U.S. is by far the world’s
largest debtor nation and is increasing its debt at $2 trillion per year. That is not
sustainable. The Federal Reserve can’t monetize all that debt, and creditors
cannot be relied upon to continue to buy U.S. debt. In the long run, all money
backed by paper is worthless. We’ll have to come up with a new world monetary
system backed by gold and silver.

Steve Henningsen:
If there is a sovereign debt problem, like I think there will be,
then the dollar will trend higher in the short term, as the children run back to
mother reserve currency. However, once they discover that mother wants to eat
them, they will flee again, and the dollar will resume its long-term trend.

>>> Gold has risen eight years in a row, yet some in the media remain
skeptical.
What’s your view of the big picture for the metal?

Jim Rogers:
I own it and am not selling. I am not buying at the moment because
of the big run-up. I hope I will be smart enough to buy more during the correction,
as it will go over at least US$2,000 during the next decade.

Marc Faber:
When I look at pictures of Mr. Obama, Bernanke, Geithner,
Summers & Co. and listen to the lies they regularly dispense, I shall hold
on to my gold and keep on accumulating more.
I also think that mining exploration companies are relatively attractive.
The U.S. government’s balance sheet is beyond repair, and this will necessitate
more and more money printing. So, whereas we shall continue to see volatility, I
think that the future of hard currencies such as gold, silver, platinum, and
palladium is bright relative to paper currencies run by a bunch of largely
destructive central bankers.

Bill Bonner:
2010 may not be a great year for gold. The yellow metal goes up
most when inflation, or the threat of it, causes investors to worry, which is
probably not in the cards this year. But the world monetary system is so fragile,
an investor is well advised to keep accumulating gold as protection.

Jeffrey Christian:
We expect gold prices to be strong in the first four months of
2010, possibly moving to a new record high above last year’s intraday $1,227.50.
After that, we project gold prices to decline – assuming our main economic
scenario of stronger real economic growth persists over the remainder of the
year. We do not expect gold prices to plunge, however, as we think investors and
central banks will continue to add to their gold holdings as long-term investors,
even and especially if prices decline from current and projected high levels. We
think gold prices may remain above $950 – $1,000 in 2010.

Peter Schiff:
Gold will be up again. We could see $1,500-$2,000 this year, and
ultimately it’s headed higher than that. If the dollar crashes this year, look out.
David Tice: I believe that gold will go a lot higher. It might have a 15-20%
pullback, but I expect it to go far higher over the next 3-5 years. I believe that
the Dow and gold will eventually cross, and the level will be at least 2,500-
3,000.

Bob Hoye:
Until the credit contraction began in May-June 2007, gold’s price
increase was mainly due to dollar depreciation. Gold’s real price has declined to
an important low with every great financial bubble. PORT 1 We use our
Gold/Commodities Index as a proxy for the real price, and it declined to a cyclical
low in May 2007 and, appropriately, turned up as the credit markets turned down.
By this measure, gold has been increasing for some two and a half years against
a probable increase of four years. Typically, gold’s real price can increase until
the great contraction completes, which has been around twenty years.

Krassimir Petrov:
Gold’s fundamentals are fantastic: monetization of massive
deficit spending as far as the eye can see. Gold bugs are some of the most
intelligent and sophisticated investors in the world, yet I am puzzled at their
universal dislike for Ben Bernanke. Instead, gold bugs should thank Bernanke for
making gold a superb long-term, low-risk, high-return investment in coming
years. For fundamentals, I also look at the Dow-Gold ratio. It tells me that gold
is still dirt cheap relative to financial assets; I expect the ratio to overshoot to
below 1(!!!).

Clyde Harrison:
Sell gold when Time magazine likes it. Right now gold stocks
are as underpriced as they’ve ever been vs. the asset value in the ground. Gold
is going much higher because they’re going to print money.

Ian Gordon:
Let’s just say, how high does gold have to go to convince these
stupid skeptics? And when they are convinced, perhaps that’s the time to leave
gold. Gold will continue to rise in value as long as the economic and debt
problems persist. Given the initial response by governments to the problems,
which is to create more debt, we would expect that the problems will persist for a
long time and that people will continue to accumulate and hoard gold as a hedge
against continued government ineptitude and the probable collapse of all paper
assets including paper currencies.

Steve Henningsen:
My view is to own it, which I have since 2003, and not think
about it. All the reasons for owning the shiny one back then are still here
today. My interest in gold and silver will fade once the skeptics are gone
and there is no one left to call me a fool w: YES !.

>>>What’s your best investment advice for 2010?

Jim Rogers:
Buy low; sell high.

Marc Faber:
I suppose that 2010 will show that the great “exit strategy” of Mr.
Bernanke and Geithner will be more fiscal stimulus and more money printing.
This will be bad for bonds and cash and good for asset markets, such as
commodities and stocks. However, whereas 2009 was a superb year to make
money, 2010 will be a year of capital preservation and of far more moderate
gains. Sometime in 2010, probably in about three months’ time, but it could
also happen sooner, equities will correct at least 20% to 30%. Thereafter,
money printing will lift them again. Japanese stocks are the most contrarian
play. Among commodities, agricultural commodities may do best in 2010.

Peter Schiff:
It will be a good year for commodities, gold, and foreign stocks. I
don’t think overall they’ll be as good as 2009 coming off the 2008 meltdown, but
gold, commodities, and foreign assets will all outperform U.S. assets. You don’t
want to be in U.S. dollars or U.S. debt.

Bill Bonner:
Sell U.S. stocks and bonds. Buy Japanese stocks and gold. Keep
cash balances high (!!).

Jeffrey Christian:
Be long commodities, but hedge your long positions by
purchasing out-of-the-money puts. We are bullish on silver, platinum, and
palladium as well as gold.

David Tice:
Be cautious, lighten your equity exposure, be hedged, pay off debt,
and hold gold and other precious metals.

Bob Hoye:
The increase in gold’s real price indicates improving profit margins
for producers, and this has not been fully priced into the sector. Big-and smallercap
producers have been good performers through most of 2009, and the best is
yet to come. Gold’s real price advance also enhances valuations on gold
deposits, and this will likely ensure that the play will rotate into exploration
stocks. The big producers desperately need gold reserves. The big winner in
2010 will likely be the “juniors.”

Krassimir Petrov:
For the aggressive investor, I would recommend staying
mostly in gold and silver. The conservative investor should diversify across the
full spectrum of commodities, with significant weights in food and energy. I would
stay out of stocks, bonds, and real estate, regarding them as overvalued and
risky. I am also an inflationist, so I recommend staying out of fiat currencies. If I
had to pick only one investment, it would definitely be gold, preferably physical, in
bullion and coin form.

Clyde Harrison :
The ruler for your investment success is the U.S. dollar, and
it’s declined 25% since 2000. The stock market has declined 20%, so in real
terms you’re off 40%. So, as long as they print money, you want to be invested in
stuff – gold, silver, and commodities. And everybody has to learn to trade
because we’re no longer in a buy-and-hold environment, because we don’t know
what Washington is going to do. Washington is a bunch of lawyers, and I have
socks that know more about economics than they do. We’re heading to a debt
cliff; the math tells us what they’re doing can’t work. Mean while, commentators
talk about what we’re doing to our grandchildren – but this will be over before we
have grandchildren. Those earning a living right now will be hit with this. Our best
hope is that the revolution is at the ballot box and not in the street.

Ian Gordon:
Short equities and debt, and go long precious metals and precious
metal equities.

Steve Henningsen:
Don’t be misled by 2009; we are still in a
wealth preservation situation!
Own gold and silver, commodities (especially agricultural), lots of cash – as
you never know when Mr. Opportunity will show up – and short long-term U.S.
Treasuries. Oh, and keep your eye on Uncle Sam!

>>> The best advice to deal with what’s ahead economically:
Diversify politically.
If you have all your assets in one country, you’re screwed.
Best advice for investors
Get money out of your home country.
Own a lot of precious metals and a productive farm in a nice place.
And hold on to your hat ….

http://www.zerohedge.com/article/death-capitalism

In 2009, when almost every major US bank manufactured profits out of thin air and declared themselves financially healthy by (1) changing their regular reporting periods to exclude months in which huge losses occurred; (2) changing their definitions of bad debt, and (3) by revaluing their assets courtesy of FASB, particularly their commercial real estate portfolios, at fantasy land valuations that they will never receive in the open market, these events all marked the continuation of the Enronization of America that is ushering in the death of capitalism. The systemic injection of fraud and deceit into nearly every aspect of American life, has been unfolding for decades, even prior to the Enron scandal itself.

...

When regulations are enforced through self-monitoring and self-policing as is too often the situation, and when all financial regulatory agencies are themselves lacking in integrity and transparency, new regulations can be enacted every day without effect.

...

It amazes me that people still foolishly follow the words of this administration and not its actions. It amazes me that I still hear people praising Obama’s proposed plan (proposed being the key word here) to impose limits on the size and trading activities of the nations largest banks without awaiting the resultant actions from such talk. I read one financial journalist that stated high praise for this proposal as he inferred that banks have become too big and that a freeze on mergers and acquisitions in the US banking industry would be welcomed. Did this journalist even consider that the biggest consolidation of power on Wall Street in the last couple of decades just happened within the past two years when Goldman Sachs and JP Morgan virtually eliminated all of their competition and the US Federal Reserve utilized the very crisis they created to seize even more power? Did this journalist even pause to consider that this administration’s cabinet and advisory boards consist of more Wall Street executives than any administration in the last several decades? Did this journalist consider that the greatest theft of American taxpayer money occurred under this adminstration’s watch with the $850 billion bailout plan that is now morphing into trillions of dollars? Did this journalist bother to note that the Senate Finance Committee is now seeking to increase the debt ceiling by a radical $1.9 trillion after just approving a $290 billion increase at the end of last year that was necessary to avoid an unprecedented default on US Treasury bonds? And did this journalist miss the CFTC hearings regarding the imposition of position limits on energy commodities and somehow miss that the true nature of discourse during these hearings was not to ban speculators from creating and bursting bubbles in the commodity markets but only to ensure, in a round-about-manner, that Wall Street can continue this speculation?

another great reading at zh

Deep Thoughts From Howard Marks - January Edition

http://www.zerohedge.com/article/dee...anuary-edition

Did you think that the FDIC getting 3 years worth of funds in advance was bad?

You're pissed about bailing out American banks? How would you feel about potentially saving banks in other countries?

Bankers in favour of paying global fee

http://www.ft.com/cms/s/0/ab5c1fec-0...44feabdc0.html

Davos: The Bomb Shelter

By Darryl Robert Schoon
Feb 9 2010 3:35PM


Predators and parasites recently gathered in Davos to discuss the mounting problems of their prey. All present agreed the problem needed urgent attention.

Historian David Hackett Fisher describes this passing era as the period of Victorian Equilibrium. England’s Victorian Equilibrium, however, was built on banker’s credit, a foundation of sand; and like the story of Cinderella where the carriage turns into a pumpkin at midnight, the banker’s credit has now turned into defaulting debt and the fairy-tale world it built is collapsing.

Lies, lies and more lies

On February 5th, a Bloomberg headline reported: US Economy, Unemployment Unexpected Falls To 9.7%. Bloomberg’s headline wasattempting to convey a more positive outlook for those considering additional borrowings to help restart the banker’s stalled engine of credit and debt (their credit and your debt); but the following chart tells the real story about US unemployment, a far different version than the optimistic story being spun by Bloomberg:

Note: If you still listen to, read or watch mainstream media for your news, you could believe any or all of the following: (1) the “recession” is over, (2) Iraq had weapons of mass destruction, (3) 9-11 was the work of terrorists and (4) Lee Harvey Oswald killed JFK. If you believe any of the above, you don’t need sleep aids as you are sleeping quite well on your own.

http://www.kitco.com/ind/Schoon/images/feb092010_1.jpg

http://www.calculatedriskblog.com/20...s-lost-97.html

The real US unemployment picture is one reason why the parasites and predators who gather in Davos are so concerned. Their 300 year-old system of credit and debt concocted to drain the productivity of others has succeeded beyond their wildest dreams; but it has come at a cost—their host, society, upon which their profits depend is now collapsing.

Their concern is genuine, similar to that of plantation owners whose slaves are falling prey to disease and death brought on by age and overwork. That such was inevitable did not occur to them so inured were they from living off the labor of others; and, now, while their dilemma is obvious the solution is not.

Were it not for the trillions of dollars of government aid in 2009, the global banking system would have already collapsed and the world would again be deep in the throes of another depression, where credit-driven demand sinks in an ocean of debt and settles on the bottom where it slowly drowns.
But the collapse has not been averted, it has only been delayed. The trillions of dollars spent to postpone the day of reckoning were borrowed and soon the bill will be proffered and payment demanded for having done so.
Despite the apparent resolve of those attending Davos, there is no way out except complete systemic collapse. All beginnings have endings and the end of the three hundred year system of economic slavery by credit and debt has arrived.

THE DAYS OF YORE ARE NO MORE

In the not too distant past, the punchbowls at Davos were overflowing with Dom Perignon, bankers were celebrating billion-dollar bonuses and tall high-priced call girls were as common as the short wealthy men who paid them The reason for such exuberant celebration is clear. The following chart shows why:

http://www.kitco.com/ind/Schoon/images/feb092010_2.jpg

Beginning in 1990, the profits of the financial sector began to increase relative to the rest of the economy. This, of course, did not happen by accident. It happened because Alan Greenspan, the maestro of America’s demise, began to allow Wall Street more “freedom” during his tenure as Fed chairman; and, as we all know, freedom is a good thing—except, of course, when, in the name of freedom and free markets you turn the keys to the country over to thieves and robbers for ideological reasons, e.g. Republicans, and financial contributions, e g. Democrats.

This is what happened when Bill Clinton sold out America to the bankers. Because Wall Street already owned the Republicans, when Bill Clinton and the Democrats entered into their time-share agreement with the bankers, the fate of America was sealed.

Under the tenure of “Easy Al” Greenspan who never saw a problem easy credit couldn’t delay and the “welcome to the henhouse” policy extended by Bill Clinton to Goldman Sachs and their Wall Street cohorts, the stage was set for the climactic economic gang-bang of America that was to happen under Republican George Bush, Jr.

It was truly a bipartisan effort where both Republicans and Democrats united to give Wall Street carte-blanche to bet and lose the savings of Americans and allow bankers to obscenely profit no matter the outcome of their bets.

CELEBRATION DAVOS 2007
CONCERN DAVOS 2008
SHOCK DAVOS 2009
FEAR DAVOS 2010

The days of ostentatious celebration at Davos are over. Attending bankers and politicians are no longer smug and confident, their arrogance now replaced by vacillating indecision and enervating fear; and, today, if they don’t use enough deodorant, most would be politely asked to leave public areas. In Davos, despite its lofty altitude, the smell of change is in the air and it isn’t pleasant.

The present system of debt-based money and debt-based markets introduced by England’s bankers in 1694 is beyond redemption. Paul Volker, the hero of the 1980 clampdown on credit which gave capitalism one last putsch (1982-2007), has suggested reforming the banking sector in order to extend their now flagging run; and, as much as its victims would wish for it to succeed, it won’t. It’s too little, too late. The pumpkin is already waiting outside.

DO YOU KNOW WHERE YOUR CENTRAL BANKER IS?

Just five days after the bankers left Davos, the world’s top central bankers secretly reconvened in Sydney, Australia to discuss in emergency session the deterioration of global financial markets. On February 6th the Australian news media reported:

Representatives from 24 central banks and monetary authorities including the US Federal Reserve and European Central Bank landed in Sydney to meet..at a secret location…the two-day talks are shrouded in secrecy with high-level security believed to have been invoked by law enforcement agencies.

…Speculation that the chairman of the US Federal Reserve, Dr. Ben Bernanke, would make an appearance could not be confirmed…The event will be dominated by Asian delegations and is expected to include governors of the Peoples Bank of China, the Bank of Japan and the Reserve Bank of India…

The arrival of the high-powered gathering coincided with a fresh meltdown on world sharemarkets, sparked by renewed concerns about global growth and sovereign debt…Fears countries including Greece, Portugal, Spain and Dubai could default on debt repayments combined with disappointing US jobs data to spook investors.

Australia's ASX 200 slumped 2.4 per cent…echoing a sharp fall on Wall Street…Asian share markets were also pummeled, with Japan's Nikkei 225 down almost 3 per cent and Hong Kong's Hang Seng slumping 3.3 per cent…The damage was also being felt by European markets last night with London's FTSE 100 down sagging 1 per cent in early trade…Sovereign debt fears rippled through to the Australian dollar which was hammered to a four-month low of US86.43 and was trading at US86.77 cents last night.

“This does feel like '08 and '07 all over again whereby we had these sort of little fires pop up and they are supposedly contained but in reality they are not quite contained”, said H3 Global Advisors chief executive Andrew Kaleel…”Dubai should have been an isolated incident and now we are seeing issues with Greece, Portugal and Spain.” http://www.news.com.au/business/secr...-1225827289543

When bankers began arriving in Sydney on Friday, one hour before markets closed in New York, US markets began to suddenly rally in the last hour of trading to close almost in positive territory, a suspicious sign of renewed market intervention by the US plunge protection team.

That western capital markets are subject to government intervention and interference has been true for decades. When the house controls the manufacture and supply of chips it matters little to the house if the gaming tables are fixed or free; but, to the punters, as long as some come out ahead, most don’t care.

When their underwear is soiled, free-market advocates often become Keynesians

THE BREAKDOWN

If you are reading this, the odds of you having been in Australia to attend the secret meetings of central bankers are remote. Nonetheless, we do share something with those who were inside eating and drinking on the public dime. Indeed, our fates are intertwined and not in a good way.

http://www.kitco.com/ind/Schoon/images/feb092010_3.jpg

All of us, including the bankers, are in the above picture but we may not be where we think we are. Nonetheless, it is an accurate depiction of the current situation. The ship has hit an iceberg and is sinking. Only the time and manner of its demise are still unknown.

Some hope the ship can still be saved. It can’t. We are in the endgame predicted by those who warned us; and now it is too late to do what could only have been done before. We chose to do nothing and by so doing allowed the current tragedy to happen.

The dawning realization of what is happening has come too late to save the nation. The warnings by America’s founding fathers were ignored by all and the consequences are coming to pass as predicted.

America’s military, the world’s largest standing army, drained America of its once considerable wealth and private bankers have indebted the nation, its businesses and citizens beyond their ability to repay. Thomas Jefferson warned it could be so. We ignored his warnings and, now, it is too late.

The political process has proven singularly inadequate to prevent the collapse of the nation. Today, the political dialogue in America resembles a bitter domestic dispute in which the entire family will lose.

http://www.kitco.com/ind/Schoon/images/feb092010_4.jpg

WHERE ARE YOU?

Hoping for change, Americans voted for Barack Obama and instead got more of the same, the same foreign policy, the same bankers, the same problems. If voting doesn’t lead to change, the question then becomes, what will?

BETTER TIMES ARE AHEAD

In March, 25-29 in Szombathely, Hungary, Professor Antal Fekete, I and others will discuss the question, Is the Global Financial Crisis Really Over?; and, while the question may be rhetorical, much depends on its resolution.(to attend, contact [email protected])

It is my opinion that the crisis will end in a complete breakdown of the banker’s system of credit and debt, a collapse so great that the past will become exactly that, the past; and the future, when it does arrive, will be far different than the present.

Historian David Hackett Fisher wrote that all great epochs, e.g. feudal, renaissance, enlightenment, etc. end in complete devastation and economic collapse. It will be the same with the present epoch, the age of Victorian Equilibrium. Fisher also noted that after the collapse of each era, another and, in many respects, superior era took its place.

A new era and better era can be expected; but, first, the bankers’ system of fraudulent money must collapse. The good news is that it will. The bad news is that when it does, hardship and suffering will result.

But suffering and hardship must be seen in a larger context. Just as Buckminster Fuller believed that mistakes are necessary for learning, crises are necessary for growth. Had we a choice, we would avoid all crises and all mistakes; and, as a consequence, all growth and all learning.

Emergence through emergency
Buckminster Fuller

Buckminster Fuller wrote in 1981 in The Critical Path…that mankind would soon be entering a period of unprecedented crisis, a crisis universally intended to bring about the transformation of humanity. If we could, we would resist this crisis. But we can’t and since we can’t, let us succeed.
The transformation of humanity depends on us doing so.

Buy gold, buy silver, have faith.

Big Brother in Greece!

From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards"

http://www.reuters.com/article/idUSLDE61824V20100209

Most Germans want Greece thrown out of euro.

53 pc of Germans want Greece tossed out of euro if troubles deepen; 2/3rds against bailing out the country.

Stacy Herbert from Maxkeiser.com had an interesting comment on the subject "Well, I think about 2/3rds of Americans were against bailing out the banks too and look where that got them"

http://www.telegraph.co.uk/finance/c...t-of-euro.html

Saudi Central Banker Confirms that US Dollar is on its Deathbed.

http://www.zerohedge.com/article/sau...r-its-deathbed