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Dear CIGAs,
The Angels are moving targets that are refined with each market reaction. Their change is miniscule but we account for it. That fact that $1224.10 was the cash high and the fact that the $1080 area worked reasonably well has lit up $1764 even brighter than $1650.
I therefore conclude that gold is definitively going to $1650 with an overrun to $1764 prior to a reaction before it moves to higher prices on or before January 14th, 2011.
Gold buying frenzy grips China
January 06, 2010 17:25:00 IST
A gold buying frenzy is spreading across the Chinese landscape–from cities to rural towns–as you can make out from the words of Xiam Zang, a bullion dealer in Beijing: “Chinese people are buying more gold these days. There are increased sales in jewellery shops for gold ornaments, coins and bars. In fact, many people are now convinced that gold is the best investment asset.”
Zang says as gold sales are rising, “there are increased requests from jewellery shops for supplying them with gold.” “Everyone is doing good business in gold in China. The gold buying spree is not just limited to Beijing or big cities. Even in rural areas, people are simply buying gold despite the high prices,” he added
China is on a gold buying spree and the rush is set to continue in 2010 also as gold jewellery sales in mainland China and Hong Kong are expected to ramp up. According to market experts, present retail price for gold is HK$10,900 per tael and it could climb to HK$11,000 per tael before Lunar New Year.
Gold sales have risen by 10 per cent this year and are expected to accelerate in the coming two months.
A 20 per cent year-on-year sales growth can be expected before Lunar New Year. The revenue from now till mid-February can contribute up to as much as 30 per cent of the full year sales turnover.
Recent bullion purchases by central banks, including India and China, have fueled shoppers’ sentiment and helped sales during past months. The mainland maintained its position as the top buyer of gold last month. It bought 454 tonnes of gold, topping India and Russia.
Jim Sinclair’s Commentary
Yeah sure and the Fed is going to drain as well. When push comes to shove there are two choices.Greece leaves the economic union which would fundamentally be the better decision or the bailout occurs.
Since wrong decisions are more likely, do not rule out a bailout. That goes for California as well because California can’t leave regardless of what the Russian professor has predicted.
New York is directly behind California.
Euro brinkmanship escalates as ECB shuts door on Greek bail-out
The European Central Bank has given its clearest warning to date that there will be no EU bail-out for Greece if it fails to control its spiralling deficit, raising the stakes in a game of brinkmanship over the future of the euro.
By Ambrose Evans-Pritchard, International Business Editor
Published: 6:47PM GMT 06 Jan 2010
Jurgen Stark, the ECB’s chief economist and the powerful German member on the bank’s inner council, said Greece’s problems are entirely "home-made" and do not meet the terms required to trigger the rescue mechanism under EU treaty law, which is limited to countries that face severe difficulties "beyond their own control".
"The Treaties set out a ‘no bail-out’ clause, and the rules will be respected. This is crucial for guaranteeing the future of a monetary union among sovereign states with national budgets. Markets are deluding themselves if they think that the other member states will at a certain point dip their hands into their wallets to save Greece," Stark told the Italian daily Il Sole .
"The country has not kept public accounts under control, nor worked to improve competitiveness. Greece is in a very difficult situation."
The comments prompted an acid retort from Greece’s new-broom finance minister, George Papaconstantinou. "Frankly we don’t need that clarification. We don’t expect to be bailed out by anybody as, I think, it is perfectly clear we’re doing what needs to be done to bring the deficit down and control public debt."
He said the government had agreed to even tougher measures than originally planned, aiming to slash the budget deficit from 12.7pc of GDP to 3pc by 2012 – a year ahead of schedule. "We are sending a message of determination and frontloading the adjustment," he said.
Jim Sinclair’s Commentary
This is not uncommon for the US.
The situation speaks to the thin margin by which the funding request was met and the huge number we are now at. This huge number is MOPEd daily by the bulls regarding draining.
To drain is to pull the drain plug after creating those dollars, rendering the creation a total waste of time.
This is more "Pretend and Extend" while practicing QE to infinity, and praying to the god of greed for a sound recovery that the Austrian school says there is no chance of except for bottom bouncing at a ridiculous price with dire circumstances pending.
US Avoids Technical Default By Three Days
Tyler Durden on 01/05/2010 19:37 -0500
On December 24, the Senate passed a vote by a razor thin margin (with not a vote to spare) to raise the Federal debt ceiling from $12,104 billion to $12,394 billion. The actual debt ceiling increase took effect on December 28. And as the chart below shows, the Treasury’s cash flow projections were spot on: 3 days later, and the debt subject to limit surged to $12,254, a jump of over $200 billion in 2 days, and a whopping $150 billion over the old debt ceiling. Three days is all the buffer the administration’s reckless spending spree has afforded this country to avoid bankruptcy. Had one more Democratic vote dissented from the stopgap measure, the US would now be in technical default. There is just $140 billion left before the revised debt ceiling is breached. We hope for the country’s sake that Bill refunding in January is massive, because as we already pointed out, on January 7th we expect another ~$130 of new Treasuries to be announced for auction by January 15th. And then there are two more weeks in January… Which is why the Treasury better be using that TARP money to pay down all it can, because if the general population understands how close this nation was to the fiscal brink, many more answers may be demanded out of the ruling party as to how it could allow things to get so out of hand.
Jim Sinclair’s Commentary
At the bottom of all the major financial disasters of the last two year lies our dear OTC derivative manufacturers and distributors as securitized investment garbage paper, credit default derivatives and credit swaps amongst a sea of other geek junk.
GMAC to post major Q4 loss.
GMAC expects to post a combined Q4 loss of around $5B, largely because of write downs on risky mortgage assets it intends to sell, with $3.8B of the loss coming from the planned sale of a mortgage unit that CEO Michael Carpenter called "a millstone around the company’s neck." The government owns a 56% stake in GMAC, and could see its holdings rise to 80% if it chooses to convert more of its stake into common equity.
Jim Sinclair’s Commentary
California and soon many other States are looking to Washington for a bailout or the default.
Greece says no need for bailout.
As EU officials arrive in Greece for a three-day fact-finding mission, Greece’s Finance Minister George Papaconstantinou rejected speculation that the country may need a bailout and said it’s "perfectly clear we’re doing what needs to be done to bring the deficit down and control the public debt." His comments follow earlier remarks by ECB Executive Board member Juergen Stark, who said the rest of the EU wouldn’t rescue Greece if its fiscal position worsens. Greece has the EU’s biggest budget deficit, registering 12.7% of GDP in 2009. Greece has pledged to cut its deficit to 8.7% this year and to bring it below the EU’s 3% limit by 2012.
Jim Sinclair’s Commentary
Kicking your banker/investor in the slats is not the wisest of IR moves.
U.S. raises anti-dumping duties on Chinese steel.
As China knocks Germany down a peg to become the world’s top merchandise exporter, and remains on track to surpass Japan as the world’s second-largest economy, trade tensions continue to rise between China and the U.S. On Tuesday, the U.S. applied additional duties of 43-289% on more than $300M worth of steel imports from China. Last week, in the biggest U.S. trade case against China, officials approved duties of 10-16% on over $2.7B worth of Chinese-made oil well tubing and casing
Jim Sinclair’s Commentary
Our healthy financial system wherein toxic paper can be valued according to the opinion of the financial companies themselves.
Thank you, FASB.
Jim Sinclair’s Commentary
A example of bottom bouncing at a drastic cost, with drastic consequences.
US pending home sales slump, factory orders rise
WASHINGTON – Pending sales of previously owned US homes fell more sharply than expected in November, but a surge in new factory orders offered assurance the economic recovery remained on track.
The National Association of Realtors said on Tuesday its Pending Home Sales Index, based on contracts signed in November, dropped 16 per cent from October to 96.0 after rising for nine straight months.
Analysts, who had looked for a decline of only two per cent, blamed the drop on the end of a rush to beat the original expiration of a popular tax credit.
They said the fact the index was up 15.5 per cent from its year-ago level indicated the housing market continued to heal.
A separate report from the Commerce Department showed new orders at US factories rose 1.1 per cent in November.
Jim Sinclair’s Commentary
In the 1991 book "Boom," I said that China was headed to the position of number one world economy.
The intelligencia had a good laugh at my expense.
China Overtakes Germany as World’s Top Exporter, GTI Data Shows
January 06, 2010, 10:54 AM EST
By Jennifer M. Freedman and Jana Randow
Jan. 6 (Bloomberg) — China overtook Germany as the world’s top exporter last year, data compiled by Global Trade Information Services Inc. show.
China shipped products worth $957.7 billion in the first 10 months of 2009, while Germany sold goods worth $917.7 billion to customers abroad, according to an Internet database operated by Columbia, South Carolina-based GTI. Exports from China exceeded German shipments every month since April last year, data show.
China has already slipped past Germany to become the world’s third-largest economy and is forecast to overtake Japan this year, assuming the No. 2 spot behind the U.S. Exports have driven a 15-fold increase in China’s economy to more than $3.8 trillion since the nation opened its doors to foreign trade and investment in 1978.
Chinese exporters weathered the worst global recession since World War II better than their German counterparts, GTI’s figures suggest. Exports from China fell 20 percent in the first 10 months of 2009, according to the GTI database, while shipments from Germany tumbled more than 27 percent.
That’s almost double the 2.6 percent projected for the U.S. and four times the 1.1 percent growth predicted for the euro region. Germany’s central bank forecasts growth of just 1.6 percent for Europe’s largest economy this year.
