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Dear CIGAs,
Management of Perspective Economic (MOPE) in action is demonstrated below.
The strength in gold has to do with the dollar slipping to and below USDX .7940.
The type of inflation that is on the horizon is worse than the writer below understands. It is not an economic event as this article wants you to believe. It is a currency event.
When the currency event is a Reserve Currency it is worldwide problem. That is why gold is rising. It might even be part of the reasons equities rose.
DJ FOCUS: Data Don’t Show Inflation Cycle Some Gold Bulls Expect Yet
The recent higher U.S. inflation data are not the start of the runaway price pressures that some gold bulls expect to eventually trigger another rally in the precious metals, analysts say.
The June Consumer Price Index rose 0.7% and core CPI excluding food and energy was up 0.2%, the federal government said Wednesday. Both were one-tenth of a percentage point above the consensus forecast.
This came one day after the June Producer Price Index was reported up 1.8%, well above the 1% forecast and the biggest rise since November 2007. The core PPI rate rose 0.5% after the forecast was for steady.
So is this the start of the inflation cycle that gold bulls have been banking on due to fiscal- and economic-stimulus efforts?
Jim Sinclair’s Commentary
The banks have been rescued, but the problem still sits there looking you right in the eye.
The BIS changed their method of computer valuation to value to maturity, a cartoon thereby reducing the nominal value from one quadrillion one thousand one hundred and forty four trillion to eight hundred trillion.
There is no way to list 95% of these as they have no common standards.
Other than putting twelve trillion dollars into the system to make Wall Street whole, what has been accomplished.
![clip_image001[1]](http://jsmineset.com/wp-content/uploads/2009/07/clip-image00111.jpg "clip_image001[1]")
Mobius Says Derivatives, Stimulus to Spark New Crisis (Update2)
By Bloomberg News
July 15 (Bloomberg) — A new financial crisis will develop from a failure to effectively regulate derivatives and the extra global liquidity from stimulus spending, Templeton Asset Management Ltd.’s Mark Mobius said.
“Political pressure from investment banks and all the people that make money in derivatives” will prevent adequate regulation, said Mobius, who oversees $25 billion as executive chairman of Templeton in Singapore. “Definitely we’re going to have another crisis coming down,” he said in a phone interview from Istanbul on July 13.
The Bank for International Settlements estimates outstanding derivatives total $592 trillion, about 10 times global gross domestic product. Opaque financial products contributed to almost $1.5 trillion in writedowns and losses at the world’s biggest banks, brokers and insurers since the start of 2007, according to data compiled by Bloomberg.
The U.S. Justice Department is investigating the market for credit-default swaps, Markit Group Ltd., the data provider majority-owned by Wall Street’s largest banks, said July 13.
Mobius didn’t explain what he thought was needed for effective regulation of derivatives, which are contracts used to hedge against changes in stocks, bonds, currencies, commodities, interest rates and weather.
“Banks make so much money with these things that they don’t want transparency because the spreads are so generous when there’s no transparency,” he said.
Jim Sinclair’s Commentary
Wow, there is a bit of the pot calling the kettle black in this article.
Fed not fit for oversight job, investor group says
By Rex Nutting
AMMAN, Jordan (MarketWatch) — Several large investor groups and two top former regulators are urging the creation of an independent body to examine systemic risks in the U.S. financial sector, the Financial Times reported Wednesday. The group — led by former Securities and Exchange Commission chairmen William Donaldson and Arthur Levitt — said the Federal Reserve should not get the responsibility because it’s credibility had been "tarnished" by its easy credit policies and lax regulatory oversight, which contributed to the excessive leverage that threatens the global economy. The investor group includes senior figures from Calpers, the large Californian state pension fund, and from investment firms BlackRock and Legg Mason
Jim Sinclair’s Commentary
To open the hedge fund books is akin to opening the Anarchist’s Cookbook
Obama wants SEC to look into hedge fund books
By Ronald D. Orol
WASHINGTON (MarketWatch) – The Obama administration on Wednesday plans to send a proposal to Capitol Hill that would require hedge fund managers and private equity managers with more than $30 million in assets under management register with the Securities and Exchange Commission and open up their books to periodic examinations, according to remarks by Assistant Secretary for Financial Institutions Michael Barr on regulatory reform. The White House proposal, which is backed by the Treasury Department, will also require hedge fund managers to disclose to regulators and investors more information about the characteristics of their hedge funds. Fund managers will need to provide more details about asset size, borrowings and any off-balance sheet exposure.
Jim Sinclair’s Commentary
Sure, the Fed is at risk, and so is Dr. Bernanke.
The problem is not too much stimulation, but in the Administration’s view, who are reticent to use fiscal stimulation, and that number is not enough.
This is a war the Fed will lose.
Economists Warn Fed Independence at Risk
JULY 15, 2009, 2:25 P.M. ET
More than 175 prominent economists warned that politicians’ attacks on the Federal Reserve are putting "the independence of U.S. monetary policy…at risk," and urged Congress to back off lest it undermine the Fed’s ability to manage the economy and thwart inflation.
The 185-word petition, initiated by a band of academic economists, reflects growing unease among professors, former Fed officials and some investors that the vehemence of the criticism from Congress of the Fed’s handling of the financial crisis suggests a readiness in Congress to weaken the freedom the Fed has to move interest rates as it sees fit
Jim Sinclair’s Commentary
Of course the central planners wanted the merger. It was the easiest and fastest way out of a hole, so they got a little pushy.
BofA-Merrill tale: Paulson’s turn
Former Treasury chief Paulson heads to Capitol Hill to explain his role in controversial deal. Paulson expected to explain he wanted to save the merger.
WASHINGTON (CNNMoney.com) — Did government officials overstep their authority and force Bank of America to take over troubled Merrill Lynch at great taxpayer expense?
That’s what lawmakers plan to ask former Treasury Secretary Henry Paulson, who returns to Capitol Hill on Thursday to testify about the controversial deal struck during the height of the banking panic last fall.
Members of the House Committee on Oversight and Government Reform will do the questioning. The panel has already grilled the chiefs of Bank of America (BAC, Fortune 500) and the Federal Reserve.
Last September, Bank of America’s purchase of Merrill Lynch was trumpeted as good news — an example of the financial sector saving its own — especially when compared to the near-simultaneous bankruptcy of Lehman Brothers.
Yet, the BofA-Merrill deal later nearly collapsed and was rescued by billions of taxpayer dollars and government intervention, the full extent of which had not fully surfaced until officials started investigating earlier this year. The House Oversight hearings aim to get to the bottom of the government’s role in salvaging the deal.
Jim Sinclair’s Commentary
Here are a few comments from Joberg:
China is angry at the treatment they have received. This I guarantee you.
China is proud not only of what it has achieved, but how much of it has been kept in place while the rest of the world unwinds.
I expect some action to say enough. The US dollar smells it.
The false sideways movement of the past many weeks is losing ground.
As it does, the next place the USD will find is .7200 USDX. When the dollar goes below .7200 USDX you know what has hit the fan.
It might be a nice idea to show respect to your bankers. Respect, however, is much too much to ask of a city (Washington) privately owned by Wall Street.
Jim Sinclair’s Commentary
You are in China or you are nowhere!
The dollar is yesterday’s game. Yes, it will remain in central bank’s reserves, but in a secondary position to a basket of currency units (SSCI).
China plans global role for renminbi
By Peter Garnham
Published: July 14 2009 20:00
China has kick-started a major plan to internationalise the renminbi and the process is likely to be faster than many expect, according to HSBC.
If successful, this could lead to nearly $2,000bn in annual trade flows, or as much as 50 per cent of China’s total, being settled in renminbi each year by 2012, compared with less than 10 per cent today.
The move follows calls by China for the world to adopt a supranational currency to replace the dollar.
“China is beginning an ambitious scheme to raise the role of the renminbi in international trade and finance and to reduce reliance on the US dollar,” said Qu Hongbin, China chief economist at HSBC.
“This will likely be a multi-year and gradual process. Yet, we believe the pace is likely to be faster than many expect.”
Jim Sinclair’s Commentary
More gossip from Joberg:
I heard that HSBC is shutting down their individual storage operation. Any conformation out there? If so, why?
The only safe storage in this world of unbridled greed is the Bank of you.
Think about this:
Step #1 – Bloomberg, "Greenlight Capital Inc., the $5 billion hedge-fund firm run by David Einhorn, July 14 (Bloomberg) — Greenlight Capital Inc., the $5 billion hedge-fund firm run by David Einhorn, told investors it switched all of its holdings in a gold exchange-traded fund into bullion during the second quarter."
Step #2 – Take your gold home to the Bank of you. Now you are your own central bank.
Jim Sinclair’s Commentary
Now that would be a surprise to those dedicated junior gold shorts that have not had that much joy in the last four months.
Gold stocks ready for big advance
Posted: July 14, 2009, 10:30 AM by Peter Koven
Gold equities are stuck in the middle of the summer doldrums and are pulling back from their highs. But technical analysts Ron Meisels and Olaf Sztaba of the NA Marketletter are not worried. They wrote that the bland behaviour of the stocks should not draw attention away from the larger, more bullish picture, especially since golds take extra time to build bases for future advances.
"The current consolidation [the longer the better] is part of a base-building process which usually results in a major move at a later date," they wrote in a note.
They figure that the build-up of pessimism should reach its zenith "just in time" for a year-end rally in the stocks. The first indication of such a move would be a stabilization in the majors like Barrick Gold Corp. and Newmont Mining Corp., followed by a "decisive" move above their 50-day moving averages.
"In fact, a significant number of gold stocks have been developing bullish, multi-month base-formations which, if realized, could result in noticeable up-moves," they wrote, citing Gammon Gold Inc., Alamos Gold Inc. and Royal Gold Inc. as examples.
Of course, slow periods like this are when investors get lethargic and take a "wait and see" approach. The analysts wrote that this is the wrong strategy, as weak and boring periods are often the best time to accumulate the stocks.
Jim Sinclair’s Commentary
This is cheap compared to what is maturing in the Commercial Real Estate market in the next 12 months.
Tab hits $95.7 billion so far for bailout of General Motors, Chrysler and auto parts suppliers
02:19 PM
In honor of General Motors beginning its first week as a new company, we thought you might like to see how much taxpayers are chipping in to save GM, Chrysler and auto suppliers.
The answer, in the chart, is: just shy of $100 billion…
Jim Sinclair’s Commentary
World confidence falls as unemployment grows.
116 days to go
Obama’s Stimulus Plan: Failing by Its Own Measure
By STEPHEN GANDEL Tuesday, Jul. 14, 2009
The $787 billion stimulus plan is turning out to be far less stimulating than its architects expected.
Back in early January, when Barack Obama was still President-elect, two of his chief economic advisers — leading proponents of a stimulus bill — predicted that the passage of a large economic-aid package would boost the economy and keep the unemployment rate below 8%. It hasn’t quite worked out that way. Last month, the jobless rate in the U.S. hit 9.5%, the highest level it has reached since 1983.
The two advisers who wrote the paper, Christina Romer and Jared Bernstein, went on to land key jobs in the Obama Administration. Romer is the head of Obama’s Council of Economic Advisers, and Bernstein is the chief economist and economic-policy adviser to Vice President Joe Biden. And the stimulus bill that both economists championed became law in mid-February. What has not come to pass, however, is the boom in job creation that Romer and Bernstein predicted. A little over a month ago, the Administration said the stimulus bill had created or saved 150,000 jobs. That’s a far cry from the 3 million to 4 million jobs that Romer and Bernstein foresaw back in January.
Lawrence Summers, director of the White House’s National Economic Council, said last week that the stimulus bill was on track. This past weekend, the President rejected calls for a second stimulus package, saying the current stimulus needs more time to work, since only a small fraction of the money has been spent. From the beginning, the Administration has said that much of the boost to the economy from the stimulus plan would not come until the second half of this year. Administration officials have also insisted that it’s unfair to judge the effectiveness of the stimulus by projections they made back in January since the recession has turned out to be worse than what most economists predicted even just six months ago.
Jim Sinclair’s Commentary
A by subscription service you should subscribe to:
- June Retail Sales Gain Due to Rising Inflation
- "Core" Monthly Retail Sales Rose 0.26% versus Total 0.65%
- PPI Inflation Surge Reflects More Than Oil Prices,
- Annual Change Reverses Direction of 10-Month Downtrend
- Gross Federal Debt Up More Than $2 Trillion Year-to-Year
- Inflation Accelerates (Annualized June Rate of 9.3%)
- June CPI-U Annual Deflation of 1.4% versus
- SGS-Alternate Estimate of 6.1% Inflation
- Quarterly Production and Real Retail Sales Contractions Confirm Ongoing Recession
Jim Sinclair’s Commentary
The paper gold market has been a game played by the gold banks while the physical market is low on supply.
The U.S. Mint Again Suspends Gold Coin Sales: Is It Really Out of Gold?
July 13,
I may have missed one or the other suspension of gold coin sales by the US Mint. But here we go again: Checking the online store of the US Mint I came across notices of delays and suspensions with golden Eagles and Buffalos, with waiting times ranging from ‘weeks’ and to ‘await further notice’.
The US Mint press room has entirely omitted this confirmation about the tightness of the bullion market which enjoys upward momentum thanks to the thousands of big problems the world faces.
Checking on 24kt Buffalo gold coins, the Mint saddened me with this statement:
Production of United States Mint 2009 American Buffalo Gold Proof Coins has been delayed because of the limited availability of 24-karat gold blanks. The 2009 American Buffalo One-ounce Gold Proof Coin is scheduled to go on sale in the second half of the 2009 calendar year after an acceptable inventory of 24-karat gold blanks can be acquired. The release date, once established, will be posted to the 2009 Scheduled Products Listing.
As a result of the numismatic product portfolio analysis conducted last fall, beginning in 2009, American Buffalo Gold Proof fractional coins and the four-coin set are no longer available. Additionally, the United States Mint will no longer offer American Buffalo Gold Uncirculated Coins.
The most economical way to buy gold coins, US gold eagles, is blocked as well:
BROTHER, CAN YOU SPARE AN AMERICAN BUFFALO?
U.S. Mint gold, silver coin sales ‘temporarily suspended’ – again
Sales and suspension of gold and silver coin or bullion coin sales by the U.S. Mint are becoming a regular part of doing business as overloaded refiners and mint facilities struggle to meet continuing high demand.
Author: Dorothy Kosich
Posted: Tuesday , 14 Jul 2009
RENO, NV –
Unprecedented demand, a shortage of blanks, and restrictive policies and regulations continue to exacerbate what is almost becoming a chronic shortage of gold and silver coins authorized by the U.S. Mint.
The U.S. Mint has again "temporarily" suspended sales of almost all of its gold uncirculated and proof coins, along with nearly all of silver uncirculated coins because of the limited availability of blanks.
The mint no longer offers for sale the American Buffalo Gold Proof fractional coins and four coin sets are no longer available. Meanwhile the mint will no longer offer American Buffalo Gold Uncirculated Coins.
The 2009 American Buffalo One-ounce Gold Proof Coin is scheduled to go on sale in the second half of the 2009 calendar year after an acceptable inventory of 24-karat gold blanks can be acquired.
The U.S. Mint Online Product Catalog says production of the American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended due to the "unprecedented demand" for American Eagle Bullion Coins for which all available 22-K gold blanks are being allocated.
Jim Sinclair’s Commentary
Here we go with the Green Shoots again.
When the Money Bunnies finally give in to emotions and give up on the US economy we will have reached the bottom.
U.S. Industrial Production Falls Less Than Forecast (Update2)
By Shobhana Chandra
July 15 (Bloomberg) — Industrial production in the U.S. fell in June at the slowest pace in eight months, adding to signs the worst of the recession is over.
The 0.4 percent decrease in output at factories, mines and utilities was smaller than forecast and followed a revised 1.2 percent drop in May, Federal Reserve figures showed today in Washington. Capacity utilization, which measures the proportion of plants in use, decreased to 68 percent, the lowest level since records began in 1967.
Factories, after slashing stockpiles in the first half of the year, may get a boost from government efforts to stoke spending, including cash payments aimed at reviving demand for autos. Even so, job losses will weigh on any rebound, meaning companies such as General Motors Co. and Chrysler Group LLC, two of the three biggest U.S. automakers, may be slow to recover.
“We’ll go through a very gradual rebuild,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who correctly forecast the drop in output. “There’s uncertainty about the strength of demand, credit restraints are still there, and we have a weak labor market. The fundamentals point to an economy that won’t just boom off the map.”
Industrial production was forecast to fall 0.6 percent after a previously reported 1.1 percent drop in May, according to the median estimate of 73 economists surveyed by Bloomberg News. Projections ranged from a gain of 0.2 percent to a drop of 1.1 percent.
Jim Sinclair’s Commentary
An example of management of perspective economics. There is no bottom to this experience yet.
Manufacturing in New York Area Shrank at Slower Pace (Update2)
By Bob Willis
July 15 (Bloomberg) — Manufacturing in the New York region shrank this month at the slowest pace in more than a year, bolstered by the largest gain in orders since the recession began.
The Federal Reserve Bank of New York’s July general economic index climbed to minus 0.6, the highest level since April 2008, from minus 9.4 the prior month, the bank said today. Readings below zero for the Empire State index signal manufacturing activity is contracting.
Today’s report, one of the first regional factory measures of the month, indicates that a tumble in inventories has set the stage for an end to the manufacturing rout. Even so, analysts see little momentum for a production surge as companies such as General Motors Corp. and Chrysler Group LLC struggle with the impact of rising unemployment and falling household wealth.
“This is signaling an end to the manufacturing-sector recession in this one region,” said Zach Pandl, an economist at Nomura Securities International Inc. in New York. “You’re seeing evidence that manufacturing is turning” across the country.
Economists projected the Empire State index would improve to minus 5, according to the median of 53 estimates in a Bloomberg News survey. Forecasts ranged from 2 to minus 10.
Jim Sinclair’s Commentary
Who is next to declare their desire for a SSCI and diversification away from the US dollar, the Boy Scouts of America or the Daughters of the American Revolution?
The non aligned nations are meeting now as the third event, the BRICs, the G8 and now this. You will be interested in what the conference is advertised to be about. The subject of discussion is diversification of reserves away from the US dollar.
From the article:
"We demand the establishment of a new international financial and economic structure that relies on the participation of all countries. " Castro said, ahead of handing over the movement’s presidency to Egypt.
"There must be a new framework that doesn’t depend solely on the economic stability and the political decision of only one country," the Cuban leader said, apparently referring to the United States.
In Egypt, Non-Aligned nations focus on meltdown
By SARAH EL DEEB – 1 hour ago
SHARM EL-SHEIK, Egypt (AP) — Cuba’s president on Wednesday called for an international financial system that better takes into account developing countries interests, as the global recession captured the spotlight at a summit of non-aligned nations.
Raul Castro’s remarks at the opening session of the two-day Non-Aligned Movement’s meeting in this Red Sea resort were echoed by other leaders and build on earlier discussions among officials from the 118-nation grouping of mostly of African, Asian and Latin American nations.
"We demand the establishment of a new international financial and economic structure that relies on the participation of all countries," Castro said, ahead of handing over the movement’s presidency to Egypt.
"There must be a new framework that doesn’t depend solely on the economic stability and the political decision of only one country," the Cuban leader said, apparently referring to the United States.
The new system must give developing countries "preferential treatment," he said without elaborating.
As the global meltdown roiled world markets, erasing trillions in dollars in individual, corporate and government wealth, calls have mounted for greater market regulation and a shift from the use of the dollar as the main foreign reserve currency. Developing nations have argued that their growth and stability is being undercut by a crisis in which they had no part in creating.
Jim Sinclair’s Commentary
You think you this bunch would bury their earnings in respect for the pain and suffering they have caused the average man. sociopaths have no such motivation. They are rubbing their earnings in the faces of the suffering homeless.
Goldman Sachs Welfare Kings driving Ferrari’s
July 15, 10:51 AM
I am rapidly losing my patience with Wall Street’s sense of entitlement to rob us blind and our governments complicity in the theft. A New York Times editorial today began, "Unemployment is rising, foreclosures are surging and lending is still restrained." What the Times concluded is that things are much worse than people thought.
Some experts believe the real unemployment rate, counting those working part time who want full time work and can’t find it and those who have stopped looking because they can’t find work may be approaching 20%. The Times concludes that if the Obama Administration is serious about helping home owners in foreclosure than we need to revisit allowing bankruptcy judges to modify loans otherwise banks have an incentive to seek foreclosure because that is more profitable to them.
One of the reasons is that foreclosures allow banks to postpone taking a loss until the process is complete. This process that can take over one year.
Then there is Goldman Sachs, which represents the arrogance and sense of absolute entitlement that only Marie Antoinette could fathom. With this economic news they announced record profits and a willingness to pay out 18 billion to employee’s in compensation. The problem is that as Les Leopold shows on Huffington Post in an article entitled Happy Days are here again ( Here = Wall Street ), it is you and I who will actually be forking out the 18 billion or $600,000.00 per employee.
Mr Leopold notes, " Firms like Goldman’s created new fantasy finance products that eventually crashed the whole world’s economy." To cover this they took out what amounts to insurance policies from AIG but because insurance has legal aspects and regulation, they called these insurance policies credit default swaps which are, of course, not regulated.
Jim Sinclair’s Commentary
Think about what this disaster means to those on retirement. Now think about Wall Street firms releasing huge earning and bonuses. What is wrong with this picture as unemployment grows?
American Express halts pension payments to UK staff
US-owned firm blames downturn as it suspends contributions to employees’ stakeholder scheme for 18 months
Phillip Inman
guardian.co.uk, Wednesday 15 July 2009 17.14 BST
More than 6,000 UK staff at American Express were today contemplating a meagre retirement income after their US-owned employer told them it was suspending pension contributions for the next 18 months.
The company said payments to its occupational retirement scheme were unaffordable in the current economic downturn, though the situation would be kept under review.
Until this month American Express paid a core contribution of 3% of salary into the stakeholder scheme, with a pledge to match contributions of up to 6%.
The largely non-unionised workforce has accepted the deal, which applies to July salary payments.
Stakeholder pensions are personal retirement plans created by the government as a cheap alternative to trustee-based schemes.
Employers are under no obligation to make a contribution and have no responsibility for the success of the stockmarket-invested plans. Most have gone down in value by more than 30% over the last year, following a sharp decline in share values.
The company’s staff are based mainly in Sussex at centres in Brighton and Burgess Hill, with a headquarters in London’s Belgravia.
Jim Sinclair’s Commentary
Of course gold will as it gives spiritual experiences to those who have glibly sold gold juniors short in big ways.
Gold Seen Beating Commodities, REITs, TIPS As Inflation Hedge
JULY 15, 2009, 8:00 A.M. ET
NEW YORK (Dow Jones)–Gold prices may, in some cases, perform more strongly than other traditional inflation hedges in times of rising prices, an industry group study released Wednesday said.
"If inflation does materialize, then traditional inflation-hedges like gold, commodities, real estate and inflation-linked bonds are likely to outperform other mainstream financial assets," said the report by the World Gold Council, a marketing organization funded by gold mining companies.
"Gold can be shown to enhance an investors’ risk-adjusted returns even in a low to medium inflation environment," said the report, written by Natalie Dempster, head of investment for North America, and
Jim Sinclair’s Commentary
If they are not entering one million orders in minutes, they monopolize (manipulate or pre-know) the information.
These fellows build nothing of merit and destroy everything they touch. There is no concept of building businesses that actually make products, produce food or mine something.
It looks like the Treasury is hiring out of work hedgies with grudges. Good for them.
U.S. Tightens Its Derivatives Vise
By LIZ RAPPAPORT, CARRICK MOLLENKAMP and SERENA NG
The Justice Department’s investigation into credit-default swaps is homing in on the role of Markit Group Holdings Ltd. and its ownership by a group of banks that control a large amount of pricing information in the $26 trillion market.
In recent weeks, the Justice Department’s antitrust division contacted Markit and several large banks that own the company, seeking information on the banks’ ownership of Markit and what data they provide to the company, according to people familiar with the matter.
The interest of the Justice Department reflects the growth of credit derivatives from an obscure corner of the credit markets into a world-wide business that is drawing increased scrutiny. As the market grew, Markit became the dominant provider of pricing and information.
The probe dovetails with a push by the Obama administration for more transparency in the market, which was blamed for helping deepen the credit crisis last year. Credit-default swaps are effectively insurance contracts designed to protect investors against losses on bonds or loans. The contracts are now more often used as a tool to speculate on the health of an issuer.
Investors and competitors have groused about the dominance of Markit and its owners, which comprise the top dealers in the credit-derivatives markets, including J.P. Morgan Chase & Co., Goldman Sachs Group Inc. and Credit Suisse Group. They complain that Markit has access to key pricing information that is handed to it by banks, preventing them from producing competing products. As well, Markit runs key indexes that now account for much of the trading in the market. Other companies are able to utilize banks’ credit-default swaps data for product sales.
Jim Sinclair’s Commentary
This is dollar positive? No it is not.
Trend-wise Gold is the dollar in the inverse.
The Economy Is Even Worse Than You Think
The average length of unemployment is higher than it’s been since government began tracking the data in 1948.
By MORTIMER ZUCKERMAN
The recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad.
The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion.
Here are 10 reasons we are in even more trouble than the 9.5% unemployment rate indicates:
- June’s total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.
- More companies are asking employees to take unpaid leave. These people don’t count on the unemployment roll.
Jim Sinclair’s Commentary
More bad news for the US dollar.
Gulf states need dollar hedge
(Excerpts From Article)
To weather the coming storms on the international stage the Gulf countries should therefore follow three broad guidelines:
- Like the Chinese they should buy real assets and build up their own strategic industries in fields like petrochemicals, logistics or renewable energies.
- They should engage in cautious currency diversification with gold being the ultimate dollar hedge – other paper currencies have their problems too, the ratios of government debt to GDP in Italy or Japan for example are even worse than in the US. Should China offer the GCC countries a similar deal like Brazil, i.e. settling some bilateral trade in yuan, they should seriously consider it, although China has issues of its own when it comes to rule of law or investors’ rights.
- As Saudi Arabia is already a member of the G20 and has a seat on the IMF board, GCC countries should finally actively engage in a reform of the international financial system and seek more influence in a reformed IMF against provision of capital injections.
- Dr Eckart Woertz is Programme Manager, Economics, Gulf Research Centre.
Jim Sinclair’s Commentary
You will notice from this Wall Street Journal article that few US publications cut China a break.
China’s accomplishments are called risks, danger, short term or transient.
Well China is pissed. That is not good for the dollar. It may well be that this evening here in Joberg that the .7938 USDX is in anticipation of China laying a heavy one on its detractors.
China Growth Brings Risks
Beijing weighs unwinding economic stimulus, amid specter of new bubbles
JULY 16, 2009
BEIJING — China’s economy has turned around with startling rapidity in recent months, with factory output, bank lending and commodity imports all accelerating on the back of the government’s massive stimulus program. The next challenge for authorities is sustaining that growth and keeping emerging problems at bay while weaning the world’s third-largest economy off state funding.
The sustainability of this state-driven growth spurt is a critical issue for the global economy. The success of China’s massive stimulus has been a rare bright spot in the worst global downturn in a generation, with all advanced economies expected to contract this year. …
Jim Sinclair’s Commentary
You think a sociopath cares? They don’t.
This position of Spitzer’s is self-evident. Look at the Evil Empire’s earnings today while 1 in every 10 people in the USA are out of work.
What is wrong with this picture?
Spitzer Says Banks Made ‘Bloody Fortune’ on U.S. Aid (Update3)
By Laura Marcinek, Michael McKee and Deirdre Bolton
July 14 (Bloomberg) — Eliot Spitzer, the former New York governor and attorney general, said U.S. banks made a “bloody fortune” while receiving taxpayer money without a proven benefit to the wider economy.
Politicians understand the “populist rage” with excesses in the financial industry and in this case the “public is right,” Spitzer said in a Bloomberg Television interview today. “We have saved financial services, we have not created a single job. We are still bleeding jobs.”
As New York attorney general, Spitzer was known as “the sheriff of Wall Street.” He changed business practices and collected billions of dollars in settlements from financial corporations such as Merrill Lynch & Co., American International Group Inc. and Marsh & McLennan Cos. He later became governor, resigning in March 2008 after he was identified as a client of the Emperors Club VIP, a high-priced prostitution ring.
Spitzer said rules proposed by President Barack Obama’s administration are irrelevant because agencies failed to enforce existing regulations.
“Regulatory agencies already had the power to do everything they needed to do,” he said. “They just affirmatively chose not to do it.”
Jim Sinclair’s Commentary
Here is an interesting chart from CIGA Shakeel. This is what is at the heart of gold’s action. Next stop .7100 – .7200 with a modest .7600 fight
Jim Sinclair’s Commentary
here is the 30 year from CIGA Shakeel. The 112-113 is the 28 year uptrend line. Break that and the bear will be a decade.
