07 February 2012
The Financial Crisis Of 2008 Was Just A Warm Up Act For The Economic Horror Show That Is Coming
The people out there that believe that the U.S. economy is experiencing a permanent recovery and that very bright days are ahead for us should have their heads examined. Unfortunately, what we are going through right now is simply just a period of "hopetimism" between two financial crashes. Things may seem relatively stable right now, but it won't last long. The truth is that the financial crisis of 2008 was just a warm up act for the economic horror show that is coming. Nothing really got fixed after the crash of 2008. We are living in the biggest debt bubble in the history of the world, and it has gotten even bigger since then. The "too big to fail" banks are larger now than they have ever been. Americans continue to run up credit card balances like there is no tomorrow. Tens of thousands of manufacturing facilities and millions of jobs continue to leave the country. We continue to consume far more than we produce and we continue to become poorer as a nation. None of the problems that caused the crisis of 2008 have been solved and we are even weaker financially than we were back then. So why in the world are so many people so optimistic about the economy right now?Just take a look at the chart posted below. It shows the growth of total debt in the United States. During the financial crisis of 2008 there was a little "hiccup", but the truth is that not much deleveraging really took place at all. And since the recession "ended", total credit market debt has gone on to even greater heights....
So what does this mean for the future?
Well, if a small "hiccup" in the debt bubble caused so much chaos back in 2008, what is going to happen when this debt bubble finally bursts?
That is something to think about.
READ MORE
Greek talks Falter/Sprott offering memorandum/jobs report analysis
Good evening Ladies and Gentlemen:
The banking cartel continued to launch their assault on the precious metals with gold falling by $13.00 to $1722.80 and silver slipping 1 cent to $33.72. The bankers are in no mood to see the rise in the precious metals. The lease rates lowered considerably Thursday night. Could the following have been a harbinger of things to come i.e. the raid on Friday?
Let us head over to the comex and see how trading fared today and determine amounts of metals standing.
We had a vicious raid on Friday and generally the bankers hope to shake many gold leaves from the gold tree and many silver leaves from the silver tree. You will be totally surprised by the data.
The total gold comex OI rose by 1599 contracts from 433,372 to 434,971. The bankers were thoroughly
annoyed that nothing fell in either metal so they raided again today. These crooks are something else.
The front delivery month of February saw its OI fall from 1201 to 1083 for a loss of 118 contracts. We had 54 delivery notices so we lost 64 contracts to cash settlements as Blythe must be getting worried with the huge delivery notices and no real metal to give our longs. The next big delivery month is 7 weeks away and here the OI fell slightly from 239,062 to 238,833.
The estimated volume today at the gold comex was 135,060. The confirmed volume on Friday was a monstrous 204,286. It kind of shows you what a raid will do with respect to volume. No doubt our HFT traders also played a part in bringing down the gold price.
The total silver comex OI rose by a rather large 1131 contracts despite the raid. As I mentioned above, no silver leaves fell as these longs are very strong and they are totally oblivious to any banker raids. The front options expiry month of February saw its OI fall by only 5 contracts despite 73 delivery notices on Friday.
We thus gained 68 contracts or an additional 340,000 oz of silver standing. The next delivery month is March and it is only 3 weeks away. Here the OI fell from 46,622 to 45,083 for a loss of 1500 contracts as these rolled to the future month of April. The estimated volume today was very anemic at 36,392 contracts.
No wonder silver rebounded as the bankers were loathe to supply too much non backed paper. The confirmed volume on Friday was big at 56,010 contracts.
READ MORE
The Federal Reserve's Explicit Goal: Devalue The Dollar 33%
The Federal Reserve Open Market Committee (FOMC) has made it official: After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years. The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level.
An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar.
But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.
The Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits. In effect, the Fed has announced a course of action that will steal — there is no better word for it — nearly 10 percent of the value of American’s hard earned savings over the next 4 years.
Why target an annual 2 percent decline in the dollar’s value instead of price stability? Here is the Fed’s answer:
READ MORE
An increase in the price level of 2% in any one year is barely noticeable. Under a gold standard, such an increase was uncommon, but not unknown. The difference is that when the dollar was as good as gold, the years of modest inflation would be followed, in time, by declining prices. As a consequence, over longer periods of time, the price level was unchanged. A dollar 20 years hence was still worth a dollar.
But, an increase of 2% a year over a period of 20 years will lead to a 50% increase in the price level. It will take 150 (2032) dollars to purchase the same basket of goods 100 (2012) dollars can buy today. What will be called the “dollar” in 2032 will be worth one-third less (100/150) than what we call a dollar today.
The Fed’s zero interest rate policy accentuates the negative consequences of this steady erosion in the dollar’s buying power by imposing a negative return on short-term bonds and bank deposits. In effect, the Fed has announced a course of action that will steal — there is no better word for it — nearly 10 percent of the value of American’s hard earned savings over the next 4 years.
Why target an annual 2 percent decline in the dollar’s value instead of price stability? Here is the Fed’s answer:
READ MORE
Keiser Report - Episode 246
In this episode, Max Keiser and co-host, Stacy Herbert, discuss the supercommittee that runs America, the perils of Draghi’s “blitz” and the IMF turnaround on austerity for Greece. In the second half of the show, Max talks to Gonzalo Lira about austerity, printing and running.
"Bold Alligator 2012" drills 20,000 troops on US East Coast for Persian Gulf action
DEBKAfile Exclusive Report February 7, 2012, 9:53 AM (GMT+02:00)
Bold Alligator went into its operational phase Monday, Feb. 6, the same day as a large-scale exercise began in southern Iran opposite the Strait of Hormuz. This simultaneity attests to the preparations for a US-Iranian showdown involving Israel behind the words on Feb. 5 of US President Barack Obama ("I don't think Israel has decided whether to attack Iran") and Ayatollah Ali Khamenei on Feb. 3 ("The war itself will be ten times as detrimental to the US.").
Monday, Feb. 6, the US president ordered the tightening of sanctions by freezing Iranian assets in America and blocking the operations of Iranian banks including its central bank.
US Rear Adm. Kevin Scott and Brig. Gen. Christopher Owens are coordinating the exercise over large stretches of coastal terrain in Virginia, North Carolina and Florida and Atlantic Ocean from the USS Wasp amphibian helicopter carrier. It is led by the USS Enterprise nuclear carrier with strike force alongside three amphibian helicopter carriers, the USS Wasp, the USS Boxer and the USS Kearsage. On their decks are 6,000 Marines, 25 fighter bombers and 65 strike and transport helicopters, mainly MV-22B Ospreys with their crews. Altogether 100 combat aircraft are involved.
READ MORE
;)
Bold Alligator 2012 exercise
Some 20,000 marines, seamen and air crews from half a dozen countries, a US nuclear aircraft carrier strike group and three US Marine gunship carriers are practicing an attack on a fictitious mechanized enemy division which has invaded its neighbor. It is the largest amphibian exercise seen in the West for a decade, staged to simulate a potential Iranian invasion of an allied Persian Gulf country and a marine landing on the Iranian coast. Based largely on US personnel and hardware, French, British, Italian, Dutch, Australian and New Zealand military elements are integrated in the drill.Bold Alligator went into its operational phase Monday, Feb. 6, the same day as a large-scale exercise began in southern Iran opposite the Strait of Hormuz. This simultaneity attests to the preparations for a US-Iranian showdown involving Israel behind the words on Feb. 5 of US President Barack Obama ("I don't think Israel has decided whether to attack Iran") and Ayatollah Ali Khamenei on Feb. 3 ("The war itself will be ten times as detrimental to the US.").
Monday, Feb. 6, the US president ordered the tightening of sanctions by freezing Iranian assets in America and blocking the operations of Iranian banks including its central bank.
US Rear Adm. Kevin Scott and Brig. Gen. Christopher Owens are coordinating the exercise over large stretches of coastal terrain in Virginia, North Carolina and Florida and Atlantic Ocean from the USS Wasp amphibian helicopter carrier. It is led by the USS Enterprise nuclear carrier with strike force alongside three amphibian helicopter carriers, the USS Wasp, the USS Boxer and the USS Kearsage. On their decks are 6,000 Marines, 25 fighter bombers and 65 strike and transport helicopters, mainly MV-22B Ospreys with their crews. Altogether 100 combat aircraft are involved.
READ MORE
The New Reason Gold Stocks Will Soar
By Jeff Clark, Senior Precious Metals Analyst
There are a number of reasons why many of us believe gold stocks will shoot for the moon before this bull market is over – they've done so many times in the past… the gold price still has a long way to climb… and producers are generating record revenue and profits. But I think there's another reason why gold stocks will soar – one that hasn't dawned on many in the industry yet.
The premise for my theory first lies in how gold itself is viewed. Some investors see gold as strictly a commodity or the infamous "barbarous relic." This group sees no compelling reason to buy the metal and so own little to none. Others view it as a play on a rising asset or because of supply and demand imbalances; they buy while those reasons are positive and sell when they turn negative. Still others view gold as a store of value, an alternative currency, or a hedge against inflation; they tend to buy and hold.
Ask yourself why you own gold. Is it because it's just another asset that offers diversification? Are you buying because it's going up and someone like Doug Casey thinks it will continue doing so? Or is it due to a genuine concern about the dilution of your currency, both now and in the future?
What's interesting to note is the shift in the number of investors wanting exposure to gold. Many who ignored it a decade ago are now buying. Those who started buying, say, five years ago, continue purchasing it today in spite of paying twice what they paid then. Slowly but surely, it's becoming more important to more people. To wit, increasing numbers of investors are viewing gold as a must-own asset.
So, what happens when it becomes a must-own asset to a substantial majority instead of a small minority? Sure, the price will rise, probably parabolically, but putting aside speculation on the price of gold for now, have you thought about what happens if you have trouble finding any actual, physical gold to buy?
READ MORE
There are a number of reasons why many of us believe gold stocks will shoot for the moon before this bull market is over – they've done so many times in the past… the gold price still has a long way to climb… and producers are generating record revenue and profits. But I think there's another reason why gold stocks will soar – one that hasn't dawned on many in the industry yet.
The premise for my theory first lies in how gold itself is viewed. Some investors see gold as strictly a commodity or the infamous "barbarous relic." This group sees no compelling reason to buy the metal and so own little to none. Others view it as a play on a rising asset or because of supply and demand imbalances; they buy while those reasons are positive and sell when they turn negative. Still others view gold as a store of value, an alternative currency, or a hedge against inflation; they tend to buy and hold.
Ask yourself why you own gold. Is it because it's just another asset that offers diversification? Are you buying because it's going up and someone like Doug Casey thinks it will continue doing so? Or is it due to a genuine concern about the dilution of your currency, both now and in the future?
What's interesting to note is the shift in the number of investors wanting exposure to gold. Many who ignored it a decade ago are now buying. Those who started buying, say, five years ago, continue purchasing it today in spite of paying twice what they paid then. Slowly but surely, it's becoming more important to more people. To wit, increasing numbers of investors are viewing gold as a must-own asset.
So, what happens when it becomes a must-own asset to a substantial majority instead of a small minority? Sure, the price will rise, probably parabolically, but putting aside speculation on the price of gold for now, have you thought about what happens if you have trouble finding any actual, physical gold to buy?
READ MORE
24 Signs That We Are Getting Dangerously Close To A Major War In The Middle East
Is 2012 the year when we will see a major war in the Middle East? For years we have heard about rising tensions in the Middle East, and for years we have heard politicians express concerns about Iran's nuclear program, but now things really do seem to be reaching a boiling point. In just the past few days, the U.S. government has imposed tough new sanctions on Iran and has totally shut down the U.S. embassy in Syria. The truth is that we are getting dangerously close to a major war in the Middle East. So will Israel strike Iran at some point in the next few months? Will the U.S. military intervene in the rapidly escalating conflict inside of Syria? If a major war does erupt, it could send the price of oil skyrocketing and there is the potential that the war could broaden very quickly. Hezbollah has already indicated that it will side with Syria, and there is always the potential that Hamas could as well. Russia and China have both stated that they are completely opposed to military action by the United States against Iran and Syria, and they have even hinted that they would possibly even help defend those countries. As the nations of the world take sides, there is even the potential that we could see World War III develop. Let us hope that it never comes to that, but with the world as unstable as it is right now, you never know what may happen.What makes war so much more likely now is that nobody has shown any signs of backing down.
Syrian President Bashar Assad has sworn that he will never step down.
U.S. President Barack Obama says that it is only a matter of time until he is forced to step down and that no other outcome is acceptable.
Iran has sworn that it will never end its nuclear program.
The United States believes that if Iran is allowed to develop a nuclear weapon it would be a fundamental threat to world security.
Israel believes that if Iran is allowed to develop a nuclear weapon it would be a fundamental threat to the very existence of the nation of Israel.
So if nobody backs down, what is going to happen?
I think we all know what is going to happen.
The following are 25 signs that we are getting dangerously close to a major war in the Middle East....
READ MORE
Treasury claims power to seize gold and silver -- and everything else
Submitted by cpowell on Sat, 2007-10-06 17:01. Section: Daily Dispatches | Confiscation
1p ET Saturday, October 6, 2007
Dear Friend of GATA and Gold:
Because of recent inquiries to GATA about the possibility of an attempt by the U.S. Government to confiscate privately held gold and silver bullion and coins and shares in companies mining the precious metals, we're republishing here the correspondence between GATA and the U.S. Treasury Department on the subject in 2005.
The Treasury Department was surprisingly candid in that correspondence, asserting the U.S. Government's authority, in declared emergencies, to confiscate precious metals and to restrict ownership of mining shares -- and to confiscate and restrict every other financial asset as well. So perhaps precious metals investors shouldn't feel too paranoid.
Confiscation has never seemed to GATA to be a serious or imminent threat. While the U.S. Government in 1933 did demand the exchange of circulating government-issued coins for paper money (proceeding to devalue the paper money after the gold was surrendered), that gold then was a huge part of the country's money supply, and amid the national economic collapse at that time the government could make a plausible complaint against "hoarding." There are no such circumstances today, gold no longer being in general circulation as currency. (Yes, we're working on that.)
But of course lately the arrogance and imperiousness of the U.S. government have far exceeded even the paranoia of precous metals investors. Certainly capital controls may be imposed in the United States in the next currency crisis, and it's not far from capital controls to even more brutal interventions in the economy.
GATA's correspondence with the Treasury Department on the subject of confiscation is appended, along with the preface that appeared with the correspondence when it first was published.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
12:11p ET Saturday, August 20, 2005
Dear Friend of GATA and Gold:
The U.S. Government has the authority to prohibit the private possession of gold and silver coin and bullion by U.S. citizens during wartime, and, during wartime and declared emergencies, to freeze their ownership of shares of mining companies, the TreasuryDepartment has told the Gold Anti-Trust Action Committee.
But gold and silver advocates shouldn't feel too picked on. For the U.S. Government claims the authority in declared emergencies to seize or freeze just about everything else that might be considered a financial instrument.
The Treasury Department's assertions came in a letter dated August 12 and written by Sean M. Thornton, chief counsel for the department's Office of Foreign Assets Control, who replied to questions GATA posed to the department in January. It took GATA six months and a little prodding to get answers from the Treasury, but the Treasury's reply, when it came, was remarkably comprehensive and candid.
The government's authority to interfere with the ownership of gold, silver, and mining shares arises, Thornton wrote, from the Trading With the Enemy Act, which became law in 1917 during World War I and applies during declared wars, and from 1977's International Emergency Economic Powers Act, which can be applied without declared wars.
While the Trading With the Enemy Act authorizes the government to interfere with the ownership of gold and silver particularly, it also applies to all forms of currency and all securities. So the Treasury official stressed that it could be applied not just to shares of gold and silver mining companies but to the shares of all companies in which there is a foreign ownership interest. Further, there is no requirement in the law that the targets of the government's interference must have some connection to the declared enemies of the United States, or, really, some connection to foreign ownership. Anything that can be construed as a financial instrument, no matter how innocently it has been used, is subject to seizure under the Trading With the Enemy Act and the International Emergency Economic Powers Act.
Having just gone through a controversy about a Supreme Court decision about government's power of eminent domain, most Americans may be surprised to learn that the Trading With the Enemy Act and the International Emergency Economic Powers Act could expropriate them instantly and far more broadly without any of the due process extended to parties in eminent domain cases. All that is needed is a presidential proclamation of an emergency of some kind -- and of course Americans lately have been living in a state of perpetual emergency.
When the Trading With the Enemy Act was passed in 1917, gold and silver formed part of the official currency of the United States and were essential to ordinary commerce, so perhaps an argument could be made then against "hoarding," even if "hoarding" could not be well defined. That is no longer the case; the United States has officially disavowed gold and silver as money and they no longer have a meaningful role in commerce. (GATA is working on that.) So gold and silver investors may want to ask their members of Congress to seek repeal of the statutes that give the government the authority to interfere with the private ownership of gold and silver, emergencies or not.
And ordinary citizens with no particular interest in gold and silver may want to ask their members of Congress to reconsider these statutes simply for being wildly tyrannical.
GATA's correspondence with the Treasury Department is appended.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
READ MORE AT GATA
1p ET Saturday, October 6, 2007
Dear Friend of GATA and Gold:
Because of recent inquiries to GATA about the possibility of an attempt by the U.S. Government to confiscate privately held gold and silver bullion and coins and shares in companies mining the precious metals, we're republishing here the correspondence between GATA and the U.S. Treasury Department on the subject in 2005.
The Treasury Department was surprisingly candid in that correspondence, asserting the U.S. Government's authority, in declared emergencies, to confiscate precious metals and to restrict ownership of mining shares -- and to confiscate and restrict every other financial asset as well. So perhaps precious metals investors shouldn't feel too paranoid.
Confiscation has never seemed to GATA to be a serious or imminent threat. While the U.S. Government in 1933 did demand the exchange of circulating government-issued coins for paper money (proceeding to devalue the paper money after the gold was surrendered), that gold then was a huge part of the country's money supply, and amid the national economic collapse at that time the government could make a plausible complaint against "hoarding." There are no such circumstances today, gold no longer being in general circulation as currency. (Yes, we're working on that.)
But of course lately the arrogance and imperiousness of the U.S. government have far exceeded even the paranoia of precous metals investors. Certainly capital controls may be imposed in the United States in the next currency crisis, and it's not far from capital controls to even more brutal interventions in the economy.
GATA's correspondence with the Treasury Department on the subject of confiscation is appended, along with the preface that appeared with the correspondence when it first was published.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
12:11p ET Saturday, August 20, 2005
Dear Friend of GATA and Gold:
The U.S. Government has the authority to prohibit the private possession of gold and silver coin and bullion by U.S. citizens during wartime, and, during wartime and declared emergencies, to freeze their ownership of shares of mining companies, the TreasuryDepartment has told the Gold Anti-Trust Action Committee.
But gold and silver advocates shouldn't feel too picked on. For the U.S. Government claims the authority in declared emergencies to seize or freeze just about everything else that might be considered a financial instrument.
The Treasury Department's assertions came in a letter dated August 12 and written by Sean M. Thornton, chief counsel for the department's Office of Foreign Assets Control, who replied to questions GATA posed to the department in January. It took GATA six months and a little prodding to get answers from the Treasury, but the Treasury's reply, when it came, was remarkably comprehensive and candid.
The government's authority to interfere with the ownership of gold, silver, and mining shares arises, Thornton wrote, from the Trading With the Enemy Act, which became law in 1917 during World War I and applies during declared wars, and from 1977's International Emergency Economic Powers Act, which can be applied without declared wars.
While the Trading With the Enemy Act authorizes the government to interfere with the ownership of gold and silver particularly, it also applies to all forms of currency and all securities. So the Treasury official stressed that it could be applied not just to shares of gold and silver mining companies but to the shares of all companies in which there is a foreign ownership interest. Further, there is no requirement in the law that the targets of the government's interference must have some connection to the declared enemies of the United States, or, really, some connection to foreign ownership. Anything that can be construed as a financial instrument, no matter how innocently it has been used, is subject to seizure under the Trading With the Enemy Act and the International Emergency Economic Powers Act.
Having just gone through a controversy about a Supreme Court decision about government's power of eminent domain, most Americans may be surprised to learn that the Trading With the Enemy Act and the International Emergency Economic Powers Act could expropriate them instantly and far more broadly without any of the due process extended to parties in eminent domain cases. All that is needed is a presidential proclamation of an emergency of some kind -- and of course Americans lately have been living in a state of perpetual emergency.
When the Trading With the Enemy Act was passed in 1917, gold and silver formed part of the official currency of the United States and were essential to ordinary commerce, so perhaps an argument could be made then against "hoarding," even if "hoarding" could not be well defined. That is no longer the case; the United States has officially disavowed gold and silver as money and they no longer have a meaningful role in commerce. (GATA is working on that.) So gold and silver investors may want to ask their members of Congress to seek repeal of the statutes that give the government the authority to interfere with the private ownership of gold and silver, emergencies or not.
And ordinary citizens with no particular interest in gold and silver may want to ask their members of Congress to reconsider these statutes simply for being wildly tyrannical.
GATA's correspondence with the Treasury Department is appended.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
READ MORE AT GATA
SilverDoctors: U.S. Sets Money-Market Plan
SilverDoctors: U.S. Sets Money-Market Plan: What sort of crisis does the SEC expect CDS sponsored failures $2.7 trillion dollars of bailout funds. Interesting amount of money....
Ellis Martin Report with Jim Sinclair "Consolidate Your Holdings and Save Your Money"
In this interview, Ellis Martin speaks with Jim Sinclair about the "positive employment outlook" reported by the government and the media and the exuberance associated with it. Where do these numbers come from? Mr. Sinclair also has compelling advice for the listener regarding how to protect oneself from the ultimate endgame related to Quantitative Easing and the decline of the dollar. What is China's direct influence or input in QE 3? Is it in their best interests to prop up the dollar and the US economy? How relevent is the Yuan? LIsten to another unedited interview.
http://www.ellismartinreport.com/
http://www.jsmineset.com/
http://www.tanzanianroyalty.com/
http://www.ellismartinreport.com/
http://www.jsmineset.com/
http://www.tanzanianroyalty.com/
Subscribe to:
Posts (Atom)