![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
Dear CIGAs,
Is this a nightmare or am I actually reading “BY NATIONALIZING GM”?
As the story broke a mini rally in the US dollar flopped.
U.S. Details Plan to Rescue G.M. Through Bankruptcy
Sunday, May 31, 2009 — 9:58 PM ET
WASHINGTON – President Obama will push General Motors into bankruptcy protection on Monday, making a risky bet that by temporarily nationalizing the onetime icon of American capitalism, he can save at least a diminished automaker that is competitive.
The bankruptcy, to be filed in New York, is a significant turning point for an industry that was once at the heart of the American economy. It culminates a remarkable four months of confrontation between Washington and Detroit that is expected to result in a drastic downsizing of the company.
It also places the government in uncharted territory as a business owner, as it takes a majority ownership stake in the company during its restructuring.
Reflecting the government’s extraordinary intervention in industry, aides say, Mr. Obama plans to tell the nation on Monday that he believes G.M. can be brought back from the brink of insolvency, even if the company looks almost nothing like the titan of old.
Administration officials briefed reporters on the G.M. plans Sunday night, as President Obama began to inform members of Congress. But the White House insisted that the aides who talked to reporters could not be named.
In his remarks on Monday, Mr. Obama will spell out a strategy in which a shrunken G.M. can make money even if new car sales remain at a sluggish 10 million a year in the United States and even if G.M., once the giant of the industry, drops below its current 20 percent market share in this country.
But to get there, American taxpayers will invest an additional $30 billion in the company, atop $20 billion already spent just to keep it solvent.
‘Gold price to touch $1,400 in six months’
2009-05-31 22:30:00
Gold investors know all too well the psychological importance of $1,000 gold. The yellow metal’s been hovering frustratingly near that level for weeks after briefly surpassing it in February. According to John Kaiser, editor of the Kaiser Bottom-Fishing Report, “we’re getting very close.” In this exclusive interview with The Gold Report, John shares his “modest” price forecast of $1,300 – $1,400 within the next six months and presents strategies for gold companies looking to create value.
The Gold Report: John, you have said that you believe gold may go up to $1,300 to $1,400, but probably not higher. Can you give our readers an overview of how you achieved those targets?
John Kaiser: I think we’re ready for a real increase in the price of gold, which is why I am looking at more modest targets, such as $1,300 to $1,400, happening fairly quickly, probably bouncing plus or minus $200 or $300, around that level, but it’s a real price increase without a corresponding catastrophic collapse in the U.S. dollar or hyperinflation descending upon us.
TGR: What time frame are you looking at?
JK: I think we’re getting very close. We’re knocking on the door of $1,000, which is a very important psychological level. I would say in the next six months, as people realize that the banking system is still troubled and will be for a long time because an uptrend in real estate prices is not in the cards for a very long time. And, in order to make the banks solvent, the underlying collateral needs to have liquidity and a stable price.
Jim Sinclair’s Commentary
Israel makes a major miscalculation!
Israel stages biggest-ever war drill
updated 7:37 a.m. EDT, Sun May 31, 2009
JERUSALEM (CNN) — Israel started its biggest emergency drill in the nation’s history Sunday to prepare civilians, soldiers and rescue crews for the possibility of war, the defense force said in a statement.
The five-day drill, nicknamed Turning Point 3, comes amid the nation’s rising tensions with Iran.
It will be conducted in public facilities, including schools, military bases and government offices. Students, soldiers and other civilians will practice how to gather at protected places during an emergency.
Officials said the drill will include simulated rockets, air raids and other attacks on infrastructure and essential facilities, and use of weapons on civilians.
Everyone is expected to go to a protected place at the sound of sirens, the defense force said, adding that more instructions will be broadcast on a public channel.
“It is of great importance that every civilian, institute and workplace will seriously practice in order to improve our preparedness and national resilience,” Maj. Gen. Yair Golan of the Home Front Command said in a news statement.
Jim Sinclair’s Commentary
Just another bailout where the taxpayer is burdened beyond the ability to cope.
FDIC Fund Running Dry
By: Dirk van Dijk, CFA
May 27, 2009
We highlight JP Morgan Chase & Co., Inc. (JPM – Snapshot Report), BankUnited Financial Corp. (BKUNA – Snapshot Report), Wells Fargo & Co. (WFC – Analyst Report) and Bank of America Corp. (BAC -Snapshot Report).
As the FDIC has had to step in to take over more and more insolvent banks, the fund has dwindled to dangerously low levels. At the same time, the number of problem banks continues to grow at a rapid pace.
At the end of the first quarter there were 305 “problem institutions” with a total of $220.0 billion in assets, up from 252 institutions and $159.4 billion in assets at the end of 2008. At the end of the quarter, the Deposit insurance fund was at just $13.0 billion, or 0.27% of insured deposits, a decline of 24.7% in the quarter alone.
The first graph (from http://www.calculatedriskblog.com/) shows the steep drop in the coverage ratio. Just a year ago, the fund was equal to 1.01% of covered deposits. The current level is its lowest since the first quarter of 1993, when we were digging out from the S&L fiasco.
However, don’t worry about losing the money in your checking account if your bank goes under. Congress has already approved a $500 billion line of credit to the FDIC. Without a doubt, that line of credit is going to have to be tapped. This does emphasize the insanity of having the FDIC provide the guarantees for the PPIP [Public-Private Investment Program]. The fund simply does not have the resources available to do it. The money for the inevitable large losses that the fund will take on the program will come from that line of credit.
Jim Sinclair’s Commentary
The Chinese use their media to speak to other governments on all kinds of matters.
This is a direct salve across the bow of Geithner’s visit to China this week.
Chinese economists deem huge holding of US bonds “risky,” split on way out
2009-05-31 15:31:57
BEIJING, May 31 (Xinhua) — On the first day of U.S. treasury secretary Timothy Geithner’s visit to China, the Beijing-based Global Times published a survey of 23 famous Chinese economists on Sunday, saying that the majority of them deemed the vast holding of U.S. bonds “risky.”
Among the 23 experts polled, 17 said they believed that U.S. equities pose great risks to China’s economy.
eithner will begin his first visit to Beijing as US treasury secretary in an attempt to assure the U.S.’ biggest creditor that its large holding of purchased US bonds is safe.
The visit also highlights Geithner’s comments made earlier this year alleging that China has manipulated its currency.
Li Wei, an expert with the Institute of Ministry of Commerce, and Tian Yun, a scholar at the China Macro Economics Institute, expressed concerns over the risks, saying that the United States may export its deepening crisis to China “by printing U.S. dollar notes uncontrollably.”
Jim Sinclair’s Commentary
“We do not believe the sales, should they occur, will harm gold prices,” said HSBC analyst James Steel.
IMF gold sale: US Congress approval next week
Commodity Online
LONDON: The International Monetary Fund’s decisiion to sell its gold reserves could get the necessary approval from the US Congress next week.
At the G20 summit in London in April, participating countries agreed the IMF could sell 403.3 metric tons of gold as part of efforts to leverage up to $6 billion in concessional loans for low-income countries over the next few years.
In order for the sale to proceed, 85% of IMF shareholders need to approve the proposal. Since the U.S. has 17% of the votes, it has a de facto veto over the proposal, which requires Congressional approval, but IMF Managing Director Dominique Strauss-Kahn told Dow Jones Newswires this week he expects Congress will soon approve the sale.
On Friday, analysts said US Congress may approve International Monetary Fund gold sales as early as next week.
“This issue appears now fully priced into the gold market and any announcement confirming sales should not move the market – apart from perhaps a knee-jerk reaction,” said John Reade, an analyst at UBS.
Jim Sinclair’s Commentary
Have you ever heard of a Hack License? It is not a cab medallion in New York.
Contractors Vie for Plum Work, Hacking for U.S.
By CHRISTOPHER DREW and JOHN MARKOFF
Published: May 30, 2009
MELBOURNE, Fla. — The government’s urgent push into cyberwarfare has set off a rush among the biggest military companies for billions of dollars in new defense contracts.
The exotic nature of the work, coupled with the deep recession, is enabling the companies to attract top young talent that once would have gone to Silicon Valley. And the race to develop weapons that defend against, or initiate, computer attacks has given rise to thousands of “hacker soldiers” within the Pentagon who can blend the new capabilities into the nation’s war planning.
Nearly all of the largest military companies — including Northrop Grumman, General Dynamics, Lockheed Martin and Raytheon — have major cyber contracts with the military and intelligence agencies.
The companies have been moving quickly to lock up the relatively small number of experts with the training and creativity to block the attacks and design countermeasures. They have been buying smaller firms, financing academic research and running advertisements for “cyberninjas” at a time when other industries are shedding workers.
Jim Sinclair’s Commentary
What are these people thinking?
Bank Of America’s New Green Hotel
Posted May 28th 2009 8:02PM by Deidre Woollard
Guests visiting Bank of America’s headquarters in Charlotte, North Carolina will soon have a more luxurious place to stay. As USA Today’s Hotel CheckIn reports, the nation’s largest bank is opening up a new Ritz-Carlton hotel across the street from its corporate headquarters.
The 18-story building will have a 12,000 square-foot penthouse wellness center, a street-side BLT Steak restaurant and 147 rooms including a 2,900 square-foot Presidential Suite. It will be the first LEED-designed new hotel in Charlotte, North Carolina and is being built for LEED Gold Certification making it the first green hotel under the Ritz-Carlton umbrella. The Ritz-Carlton, Charlotte at Bank of America Center is scheduled for completion in October 2009.
Jim Sinclair’s Commentary
1. Pakistan goes Taliban
2.Israel makes a major miscalculation.
3. Turkey is a victim.
Rebel Land: Among Turkey’s Forgotten Peoples by Christopher de Bellaigue
The Sunday Times review by Jeremy Seal
With Istanbul nominated European Capital of Culture for 2010, here’s a book that certainly rains on the Turkish parade. At once a contemporary investigation and a historical analysis, Christopher de Bellaigue’s brave and informed account of eastern Turkey’s brutalised minorities deserves a wide readership, even among those sure to find its contents unpalatable.
Ottoman cosmopolitanism largely accommodated the empire’s minorities. From the late-19th century, however, the Christian Armenians and Muslim Kurds were increasingly discomfited by rising Turkish nationalism. Accusations of genocide against the Armenians during the first world war have since been regularly levelled at the Turks, and consistently rejected by them.
De Bellaigue sets out to get his material, “gritty and unfiltered”, from the inhabitants of Varto, a benighted town near Erzurum, one that stands for “those hundreds or thousands of other small places across the rebel land, where the atrocities happened far from prying eyes”. The author brings a rare conviction to his descriptions of the town. An Alevi musician leads him across uplands deforested by the army to deny cover to Kurdish guerrillas. There are also run-ins with bureaucrats and the security forces, not least with the resentful captain of the local gendarmerie.
Jim Sinclair’s Commentary
Expect the Pakistan government to announce total victory in Swat soon, but don’t expect either victory or sustainability.
| Public support for US declining in Pakistan: Petraeus Daily Times – Lahore,Pakistan LAHORE: Public support for the US is declining in Pakistan due to US drone strikes, Central Command chief General David Petraeus has said. … See all stories on this topic |
| Pakistan: Corpses lie exposed in retaken Swat town The Associated Press MINGORA, Pakistan (AP) — Corpses lay exposed in the Swat Valley’s main town on Sunday, and residents rushed to mostly empty markets in search of food a day … See all stories on this topic |
| Pakistan battles Taliban; Swat offensive “near end” Reuters – USA The United States and the Afghan government have long been pressingPakistan to root militants out of South Waziristan and other enclaves on the Afghan … See all stories on this topic |
| Pakistan gains in Swat as trouble flares elsewhere KGAN – Cedar Rapids,IA,USA DERA ISMAIL KHAN, Pakistan (AP) — Fighting in a northwest tribal region ofPakistan could raise the odds that the army will extend an offensive to … See all stories on this topic |
| More battles in Pakistan…Palestinians clash…magiclakers final … KXMC – Minot,ND,USA AP DERA ISMAIL KHAN, Pakistan (AP) There’s more fighting in a northwest tribal region of Pakistan. Intelligence officials say Taliban fighters have fought a … See all stories on this topic |
Jim Sinclair’s Commentary
There will be many varied results as part of the Surge by Pakistan in Swat.
Al-Qaeda now recruiting ‘ready made’ Taliban terrorists from Pak to strike UK, other countries
May 30th, 2009
LONDON – The extent to which Al-Qaeda has dangerously penetrated into Britain can be gauged from the fact that it no longer relies on sending British-born men to Pakistan for terror training, instead it is now recruiting ‘ready made’ terrorists from among the Taliban based in Pakistan.
British investigators, who have been quizzing the 10 men arrested in the North West, believe that Al Qaeda has developed links with the Taliban which provide it trained militants who can carry out terror strikes at significant locations, The Telegraph reports.
According to the newpaper, a terrorist informant has told prosecutors that he was trained by the top Taliban commander in Pakistan, Baitullah Mehsud .
He also revealed that he was planning a series of suicide attacks in Britain, and other European countries with 11 other men.
It’s worth mentioning here that British security services had earlier disclosed that a terrorist cell was sent to Manchester from the Taliban heartland in Pakistan’s lawless tribal areas.
Jim Sinclair’s Commentary
The following link leads to a letter on the investigation results of the Bank of America and Merrill Lynch merger.
Click here to view the PDF file…
Jim Sinclair’s Commentary
This week Secretary Geithner will most politely get an ear full of the truth. You cannot guarantee dollars (US Treasuries) with dollars.
U.S. Treasury Secretary to visit China (05/26/09)
BEIJING, May 26 (Xinhua) — U.S. Treasury Secretary Timothy Geithner will visit China from May 31 to June 2, Foreign Ministry spokesman Ma Zhaoxu told a regular press briefing Tuesday.
As a special envoy of U.S. President Barack Obama, Geithner would visit China at the invitation of Chinese Vice Premier Wang Qishan, who is a special representative of Chinese President Hu Jintao, Ma added.
“The two sides will exchange views on issues of common concern,” Ma said, adding that those issues included the international financial situation, bilateral cooperation in coping with the financial crisis and preparations for the first round of the China-U.S. Strategic and Economic Dialogue.
The new mechanism was upgraded from the Strategic Dialogue and biennial Strategic Economic Dialogue (SED), which were initiated by the two heads of state in 2005 and 2006, respectively.
The Strategic Dialogue, co-chaired by a Chinese state councilor and a U.S. deputy Secretary of State, focused on political and strategic issues in the development of bilateral ties.
The first round of the China-U.S. Strategic and Economic Dialogue will concentrate on economic and financial topics including energy, environmental protection, intellectual property rights and services.
