![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
Dear CIGAs,
Later in the day it was reported that Mr. Krugman, who is now being referred as an economist rather than what he is, a sharp columnist, was quoted as saying that the recession would in hindsight be seen to have ended this coming summer.
If you were to listen to exactly what he said you can see that his London address was construed to meet the needs of financial media SPIN and in no way was outstandingly bullish.
Today’s bad news is simple to see if you take away the good news that is commonly fabricated in economic politically driven statistical analysis.
Today’s good news is a tragedy like the bankruptcy of GM and Chrysler because the alternative is considered catastrophic. The human suffering does not even enter the equation.
Jim Sinclair’s Commentary
This is the present situation. You can’t blame Israel for questioning where it now stands.
Jim Sinclair’s Commentary
Although judging from all that has transpired in terms of tromping on law and court precedents, one would assume the Administration is all over the Supreme Court tonight.
Having said that I am interested in how you can deduce that the stay is only miniscule in time from the following quote:
"Ginsburg said in an order that the sale is “stayed pending further order,” indicating that the delay may only be temporary."
The only reason one could conclude the timeframe is "very short" is because it is NOT a permanent order. That is called SPIN.
Chysler sale on hold, but for how long?
Supreme Court Justice Ginsburg grants delay in controversial Fiat deal
NEW YORK – Chrysler’s five weeks of breakneck-speed bankruptcy proceedings came to a screeching — but possibly temporary — halt Monday, when a Supreme Court justice delayed its sale of assets to Italy’s Fiat.
The move could derail the government’s ambitious plan for the U.S. automaker to blaze a path to profitability without the burden of many of its debts.
Justice Ruth Bader Ginsburg issued a stay just a week before Chrysler says the government-backed sale must go through. After June 15, Fiat could walk away from the deal and leave the struggling U.S. automaker with little option but to liquidate.
It was unclear late Monday just how long the stay would last, or if the high court planned to take up the case.
Chrysler said it had no comment until it receives further information from the court.
Jim Sinclair’s Commentary
How about the USA goes massively short the US dollar versus the Yuan?
That sounds stupid enough for the issuer to be considered by Washington.
Top Chinese banker Guo Shuqing calls for wider use of yuan
The head of China’s second-largest bank has said the United States government should start issuing bonds in yuan, rather than dollars, in the latest indication of the increasing importance of the Chinese currency.
By Malcolm Moore in Shanghai
Published: 5:38AM BST 08 Jun 2009
Guo Shuqing, the chairman of state-controlled China Construction Bank (CCB), also said he is exploring the possibility of issuing loans to trading companies in yuan, allowing Chinese and foreign companies to settle their bills in yuan rather than in dollars.
Mr Guo said the issuing of yuan bonds in Hong Kong and Shanghai would help to develop the debt markets in China and promote the yuan as a major international currency.
It was the first time the head of a major Chinese bank has called for the wider use of the yuan, although a chorus of senior government officials have already voiced their concerns about the stability of the dollar and have said the yuan should be used more widely.
"I think the US government and the World Bank can consider the issuing of renminbi bonds," he said, asking for a "mutual cooperation" between the US and China to promote Chinese financial services. He said bond issuance could be relatively small, at between 1bn and 3bn yuan (£100m to £300m).
HSBC and Standard Chartered have both said they are preparing to issue bonds denominated in yuan.
Jim Sinclair’s Commentary
Less demand for dollars with increasing supply is not what bull markets are made of.
IMF Says New Reserve Currency to Replace Dollar Is Possible
By Alexander Nicholson
June 6 (Bloomberg) — The International Monetary Fund said it’s possible to take the “revolutionary” step of creating a new global reserve currency to replace the dollar over time.
The IMF’s so-called special drawing rights could be used as the basis for a new currency, First Deputy Managing Director John Lipsky told a panel discussing reserve currencies at the St. Petersburg International Economic Forum today.
“There are many, many attractions in the long run to such an outcome,” Lipsky told a panel discussing reserve currencies at the St. Petersburg International Economic Forum today. “But this is not a quick, short or easy decision,” he said, adding that it would be “quite revolutionary.”
The SDRs would have to be delinked from other currencies and issued by an international organization with equivalent authority to a central bank in order to become liquid enough to be used as a reserve, he said.
As much as 70 percent of the world’s currency reserves are held in dollars, according to the IMF, leading to calls for nations to diversify their cashpiles to avoid excessive exposure to the U.S. economy as it quadruples its budget deficit in a bid to counter the worst recession since the Great Depression.
Jim Sinclair’s Commentary
Are these Government constituted court proceedings supposed to trample over the rights of the private party and contract law?
To take the position that any holder of bonds is not entitled to their rights because they were bought on the cheap threatens basic tenets upon which business is done.
Such an excuse for bad policy forgets the horror of the seller of those bonds who sold them cheap, could have held them and legally demanded their voice to be heard. It is their rights that are also being trampled on when any bond holder is forced to roll over by government pressure.
Now here is a surprise.
Supreme Court Delays Sale of Chrysler to Fiat
By MICHAEL J. de la MERCED
Published: June 8, 2009
The United States Supreme Court agreed Monday afternoon to delay the sale of most of Chrysler’s assets to Fiat pending further consideration of an appeal by three Indiana state funds, in a move that injects a new element of uncertainty over the carmaker’s bankruptcy case.
Justice Ruth Bader Ginsburg, who handles emergency matters arising from the United States Appeals Court for the Second Circuit, in a one-sentence order, said the orders of the bankruptcy judge allowing the sale “are stayed pending further order of the undersigned or of the court.”
The action indicates that the delay may be temporary, but for now the stay will keep Chrysler and Fiat from completing the transaction.
The stay prevented Chrysler and Fiat from completing the transaction immediately.
Lawyers for the three Indiana funds, which represent teachers and police officers, filed their appeal to Justice Ginsburg late Saturday night, after the Second Circuit reaffirmed a lower court’s approval of the sale. The appeals court then delayed the closing of the deal until 4 p.m. Monday or until the Supreme Court declined to issue its own delay.
The Indiana funds have sought greater compensation for their portion of Chrysler’s $6.9 billion in secured debt. They have also argued that the Obama administration illegally used federal bailout money earmarked for financial institutions to help Chrysler.
Jim Sinclair’s Commentary
Of course. Are we not watching one right now?
Royal Dutch Shell chief warns of future oil price spikes if investment continues to slacken
By Associated Press
1:23 AM PDT, June 8, 2009
KUALA LUMPUR, Malaysia (AP) — Oil prices will spike in the future without investment in the sector to meet demand once the global economy recovers, said Royal Dutch Shell Chief Executive Jeroen van der Veer on Monday.
Despite the current economic crisis, he said demand was projected to double by 2050 as the world population grows from 6 billion to 9 billion by that time. He said oil corporations should invest now in technology and develop new sources to reap benefits when the recovery comes.
"The oil and gas industry cannot supply all this additional demand … this means the next price spike is in the making," he told more than 1,000 delegates at a two-day oil and gas conference here.
"We think it is a good philosophy to be a high investor (now) and benefit from the lower construction prices," he said, without elaborating.
After soaring to $147 a barrel last July, oil prices plunged to as low as $32 late last year, which delayed or halted new oil exploration and refining projects. Since then, crude oil has climbed to the high $60s a barrel amid hopes of economic recovery and production cuts by OPEC.
Jim Sinclair’s Commentary
Think about Dark Pools and the veracity of the information as to read what marking up junk is hiding.
Bank Profits From Accounting Rules Masking Looming Loan Losses
By Yalman Onaran
June 5 (Bloomberg) — Big banks in the U.S. say they’re on the mend. The five largest were profitable in the first quarter, rebounding from record losses for the industry in the fourth quarter. Share prices have jumped, with the KBW Bank Index doubling since March 6.
Treasury Secretary Timothy Geithner, after “stress testing” 19 banks on their ability to withstand a worsening economy, declared in early May that Americans can be confident in the banks’ stability and resilience. Wells Fargo & Co. and Morgan Stanley were among banks raising $43 billion in new capital since then through share sales.
“With our capital and assets, stressed as they have been, we can go back to focusing all our attention on managing our business and restoring value,” Citigroup Inc. Chief Executive Officer Vikram Pandit said after Geithner’s examinations were completed.
The revival may be short-lived. Analysts who have examined the quarterly profits and government tests say that accounting rule changes and rosy assumptions are making the institutions look healthier than they are.
The government probably wants to win time for the banks, keeping them alive as they struggle to earn their way out of the mess, says economist Joseph Stiglitz of Columbia University in New York. The danger is that weak banks will remain reluctant to lend, hobbling President Barack Obama’s efforts to pull the economy out of recession.
Jim Sinclair’s Commentary
The culling of the gene pool. If you wish to reduce health care costs why not just reduce the geezers?
600,000 Seniors About To Lose Their Homes
Monday, June 8, 2009 11:32 AM
By: Julie Crawshaw
More than 600,000 seniors are delinquent in their mortgage payments or already in foreclosure, USA Today reports.
Unlike younger people, many are on fixed incomes and lack the money or job opportunities to catch up on payments when they fall behind.
"I’ve got a lot of seniors who have just been nailed," mortgage specialist Dean Wegner told the newspaper.
"They’re upside down (owing more on their mortgage than their homes are worth), they can’t refinance and they’re on a fixed income."
Conventional wisdom holds that most seniors have paid off their mortgages or have significant equity in their homes. But the reality is, hundreds of thousands of older homeowners are suffering in the housing crisis.
A recent report from AARP showed that 25.5 million seniors ages 50 and older have a mortgage — and that older Americans with subprime first mortgages are nearly 17 times more likely to be in foreclosure than Americans of the same age with prime loans.
Jim Sinclair’s Commentary
Israel will do whatever Israel feels necessary to survive.
The thought that a lack of US backing will overcome Israel’s fear of annihilation is to think as a Westerner and politician.
To assume you can make friends with or even simply neutralize fundamental Islam as a non-Muslim is nuts.
One of the long standing flashpoints for 2012 has always been that Israel would make a significant miscalculation.
West Bank Settlements and the Future of U.S.-Israeli Relations
June 8, 2009 | 1814 GMT
By George Friedman
Amid the rhetoric of U.S. President Barack Obama’s speech June 4 in Cairo, there was one substantial indication of change, not in the U.S. relationship to the Islamic world but in the U.S. relationship to Israel. This shift actually emerged prior to the speech, and the speech merely touched on it. But it is not a minor change and it must not be underestimated. It has every opportunity of growing into a major breach between Israel and the United States.
The immediate issue concerns Israeli settlements on the West Bank. The United States has long expressed opposition to increasing settlements but has not moved much beyond rhetoric. Certainly the continued expansion and development of new settlements on the West Bank did not cause prior administrations to shift their policies toward Israel. And while the Israelis have occasionally modified their policies, they have continued to build settlements. The basic understanding between the two sides has been that the United States would oppose settlements formally but that this would not evolve into a fundamental disagreement.
The United States has clearly decided to change the game. Obama has said that, “The United States does not accept the legitimacy of continued Israeli settlements. This construction violates previous agreements and undermines efforts to achieve peace. It is time for these settlements to stop.” Israeli Prime Minister Benjamin Netanyahu has agreed to stop building new settlements, but not to halt what he called the “natural growth” of existing settlements.
