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Dear CIGAs,
"Currency Induced Cost Push Inflation" cannot be avoided. It will happen overnight as confidence in currency breaks. All of this has happened before.
There was a major dollar rally in 1931 as many European countries defaulted on their debt. The dollar looked outrageously bullish as a mirror image of the weak European currencies. The media spoke of the USA in the manner of a refuge currency in 1931. Then it all changed as it has here and now.
The dollar returned to its previous bear market, plumbing new lows.
We are, here and now, continuing on QE to infinity. Here and now, the Fat Cat insiders of Wall Street know this and are NOW shifting to massive longs under cover of a paper gold game.
The Fat Cat Wall Street demons will make the most money over the shortest period of time in gold just as they did in 1979-80 and in the 1930s. It is totally obvious to the objective observer of the history of gold and currency.
It is here and now. It has all happened before in the same cyclical time frame as now. But here and now, so many are blind to reality.
So many have become gambleholics. So many have lost emotional balance. So many are being fooled daily by the manipulation of the paper gold market.
The trend of dollar value, here and now, is illustrated below. It is all happening again, here and now.
Harry Schultz knows it. I know this. Few have a clue of the spread of the cancerous economic entity known as "QE to Infinity" in the entire Western World.
History lesson: Huge quantities of cash were needed in Weimar Germany
Jim Sinclair’s Commentary
This is the 2nd state of (economic) Emergency in California.
California ‘fiscal emergency’ declared
29 July 2010 Last updated at 06:49 ET
California governor Arnold Schwarzenegger has declared a fiscal state of emergency, putting pressure on lawmakers to pass a state budget that is now more than a month overdue.
California’s economy, which is the eighth largest in the world, faces a budget deficit of $19bn (£12bn).
Mr Schwarzenegger said that without a budget in place the state’s government would run out of cash by October.
He also ordered most state employees to take three days unpaid leave a month.
Earlier this month, the governor ordered 200,000 state workers to be paid the minimum wage because no budget had been passed.
‘Fiscal meltdown’
The "furlough Friday", which will start in August, requires state workers to take three Fridays off a month until a new budget is enacted.
Jim Sinclair’s Commentary
The US has much more threatening problems than the EU.
1.65 Million Properties Receive Foreclosure Filings in First Half of 2010
Bank Repos Hit Another Record High in Q2 While Defaults and Auctions Decrease; June Marks Third Straight Monthly Decrease in Overall Foreclosure Filings
By RealtyTrac Staff
IRVINE, Calif. – July 15, 2010 – RealtyTrac® (http://www.realtytrac.com/gateway_co.asp?accnt=137300), the leading online marketplace for foreclosure properties, today released its Midyear 2010 U.S. Foreclosure Market Report, which shows a total of 1,961,894 foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 1,654,634 U.S. properties in the first six months of 2010, a 5 percent decrease in total properties from the previous six months but an 8 percent increase in total properties from the first six months of 2009. The report also shows that 1.28 percent of all U.S. housing units (one in 78) received at least one foreclosure filing in the first half of the year.
Foreclosure filings were reported on 313,841 U.S. properties in June, a decrease of nearly 3 percent from the previous month and a decrease of nearly 7 percent from June 2009. June was the sixteenth straight month where the total number of properties with foreclosure filings exceeded 300,000.
Foreclosure filings were reported on 895,521 U.S. properties during the second quarter, a decrease of nearly 4 percent from the previous quarter and an increase of less than 1 percent from the second quarter of 2009.Default and auction notices were down on a quarter-over-quarter and year-over-year basis in the second quarter, but bank repossessions (REOs) increased 5 percent from the previous quarter and 38 percent from Q2 2009 to 269,962 — a new quarterly high for the report.
“The second quarter was a tale of two trends,” said James J. Saccacio, chief executive officer of RealtyTrac. “The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. Meanwhile the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.
Jim Sinclair’s Commentary
And more and more as we head, without any doubt, into currency induced cost push inflation.
Bank of England chief says stimulus still needed
Bank of England governor says degree of continuing stimulus is key issue
Robert Barr, Associated Press Writer, On Wednesday July 28, 2010, 6:27 am EDT
LONDON (AP) — The governor of the Bank of England said Wednesday that the need to stimulate the economy still takes precedence over concerns about high inflation at a time when the outlook for the global economy remains uncertain.
Governor Mervyn King told Parliament’s Treasury Committee that Britain cannot be confident that a sustained recovery is under way despite last week’s report that the economy grew 1.1 percent in the second quarter — the third quarter of recovery from a deep recession.
"The debate is about the appropriate degree of stimulus, not about applying brakes," King said.
The Bank’s Monetary Policy Committee has kept its key interest rate at an all-time low of 0.5 percent, though one member — Andrew Sentance — is advocating a hike to 0.75 percent because of his concerns about inflation remaining above the official 2 percent target.
"We continue to face the challenge of rebalancing our economy away from consumption towards net exports, and raising our national savings rate. During the rebalancing, there is a risk that the level of money spending in the U.K. will remain weak, with the economy operating below capacity. That would push down on inflation potentially to a rate that is significantly below the 2 percent target," King said.
Jim Sinclair’s Commentary
You heard it from the Brits today. Now hear it from the Fed.
Currency Induced Cost Push Inflation is on its way.
Fed Board Member’s Deflation Warning Hints at Policy Shift
By SEWELL CHAN
Published: July 29, 2010
WASHINGTON — A subtle but significant shift appears to be occurring within the Federal Reserve over the course of monetary policy, amid increasing signs that the economic recovery is weakening.
On Thursday, James Bullard, the president of the Federal Reserve Bank of St. Louis, warned that the Fed’s current policies were putting the American economy at risk of becoming “enmeshed in a Japanese-style deflationary outcome within the next several years.”
The warning by Mr. Bullard, who is a voting member of the Fed committee that determines interest rates, comes days after Ben S. Bernanke, the Fed chairman, said the central bank was prepared to do more to stimulate the economy if needed, though it had no immediate plans to do so.
Mr. Bullard had been viewed as a centrist, and associated with the camp that sees inflation, the Fed’s historic enemy, as a greater threat than deflation.
But with inflation now very low, about half of the Fed’s unofficial target of 2 percent, and with the European debt crisis having roiled the markets, even self-described inflation “hawks” like Mr. Bullard have gotten worried that growth has slowed so much that the economy is at risk of a dangerous cycle of falling prices and wages.
Jim Sinclair’s Commentary
If Moody wishes to self destruct, downgrading US debt is the express lane method.
Moody’s: U.S. needs debt plan.
The U.S. government needs to lay out a credible plan to address its rising debt if it wants to maintain its triple-A credit rating, said Steve Hess, Moody’s top sovereign analyst for the U.S., East Asia and Australasia. At present, the U.S. appears to have "no plan" to deal with its fiscal outlook. The U.S. rating remains on a stable outlook at Moody’s.
Jim Sinclair’s Commentary
The fear "D" word is finding its way into the Halls of Ivy. You can anticipate QE to infinity which is the means of producing currency induced cost push inflation.
Beige Book shows economic fragility.
U.S. economic activity continued to be "weak" in June and into July, the Federal Reserve said in its Beige Book report, in the latest sign that the recovery may be running out of steam. Though most districts reported continued improvements in economic conditions, the improvements were modest; gains were limited for retail sales, housing and construction remained weak, and banking lending remained tight.
Jim Sinclair’s Commentary
For every seller there is a buyer. The buyer here is the Fat Cats that know what I and Harry know. The buyer on the dips has certainly made fools out of the other side for many years now.
This is the option expiration week at the Crimex. This is the second BEARISH article on gold today, the other being on F-TV. That is quite bullish.
All we need now is a BEARISH gold article in the London Financial Times and we are home free.
GLD gold holdings drop; COMEX volume hits record
Thu Jul 29, 2010 2:37pm EDT
NEW YORK July 29 (Reuters) – A sharp drop of bullion holdings in the world’s biggest gold-backed exchange traded fund combined with a loss of COMEX open interest indicated investors are moving out of the precious metal into other assets such as the equity markets.
Trading volume of U.S. COMEX gold futures also rose to an all-time high on Wednesday, driven by a combination of an option expiration and contract rollover. [ID:nWEN8059]
SPDR Gold Trust (GLD), often called GLD because of its ticker symbol, posted its biggest one-day tonnage drop since April 2008, as holdings fell 18.55 tonnes to 1,282.28 tonnes on Wednesday.
"That means fund managers are deleveraging out of gold and the bond markets and going into the stock markets," said COMEX gold floor trader Jonathan Jossen.
Bullion holdings held in GLD’s vault were down nearly 3 percent so far in July, but they were still up 13 percent year to date.
Jim Sinclair’s Commentary
QE to infinity is and will continue to be the battle cry of the Western World. It never stopped. It only went underground in camouflage such as guarantees beyond the guarantor and extension of unemployment benefits three times.
Another example is the bearded demand for treasuries in auction and the same in EU auctions for Spain and Greece.
Fed’s Bullard: It Is Time To Start Talking About More Quantitative Easing To Stop Deflation
Gregory White | Jul. 29, 2010, 12:04 PM
The Federal Reserve President of St. Louis James Bullard has warned that current U.S. policy could lead to Japanese style deflation and that a new form of quantitative easing may be necessary, according to CNBC.
Bullard is recommending the purchase of government debt in an effort to stimulate the economy, and prevent a deflation style scenario, according to the AP.
Bullard blames the Fed’s extended low rate language partially for what could become a potentially Japanese style deflationary period, and that quantitative easing programs are the U.S.’ best weapon against this result.
Here’s the abstract:
In this paper I discuss the possibility that the U.S. economy may become enmeshed in a Japanese-style, deácautionary outcome within the next several years. To frame the discussion, I rely on an analysis that emphasizes two possible long-run outcomes (steady states) for the economy, one which is consistent with monetary policy as it has typically been implemented in the U.S. in recent years, and one which is consistent with the low nominal interest rate, deflationary regime observed in Japan during the same period. The data I consider seem to be quite consistent with the two steady state possibilities. I describe and critique seven stories that are told in monetary policy circles regarding this analysis. I emphasize two main conclusions: (1) The FOMC is extended period language may be increasing the probability of a Japanese-style outcome for the U.S., and (2) on balance, the U.S. quantitative easing program offers the best tool to avoid such an outcome.
Markets are currently selling off in response, with today’s earlier losses accelerating on the announcement.
