Commodity investor James Sinclair said yesterday that gold might climb to $1650 (R12 300) an ounce by early 2011 on demand for an investment to compete with the dollar and other currencies. "The carry trade has dropped the dollar as a currency of choice," said Sinclair, CEO of Canada-based Tanzanian Royalty. "Gold is competition to currencies."

Harmony CEO sees gold staying above $1 000

Harmony Gold CEO Graham Briggs said yesterday that the dollar price of gold could stay above $1 000 this year after it hit a new record, but stronger rand was eroding gains for South African producers. Gold hit a record high on the spot and futures markets yesterday, with dollar weakness continuing to support sentiment by attracting new investment in the metal. "Certainly it will go higher. It wouldn’t surprise me if it stayed above $1 000 an ounce," Briggs said. "My preference is that it should not rocket fast, but that it should creep up steadily. It’s a little bitter-sweet for us South African gold producers, because what affects us most is the rand gold price. This is what would make a difference."

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Jim Sinclair’s Commentary

This article makes fun of the solid fundamentals upon which gold is based and takes comfort in gold from a peripheral perspective. Be that as it may, all are welcome to their views.

What I find remarkable about this article is that it came from the New York Stock Exchange to its listed companies and members.

I might agree that I can be a boring dinner partner if you are a socialist or derivative dealer.

Click here to read the article in PDF format…

Jim Sinclair’s Commentary

One of today’s examples of verbal currency market intervention:

"European Central Bank President Jean-Claude Trichet said the ECB will gradually withdraw emergency cash."

Jim Sinclair’s Commentary

The man puts his money where is confidence lies.

Paulson: Gold’s Bull Run Is Just Beginning
November 19, 2009
By Simon Avery

John Paulson, lionized by many investors for his winning bet on the fall of the housing and financial markets, is now getting aboard the gold wagon.

The hedge fund manager told his investors that even at $1,150 an ounce, the bull run on gold is just beginning, according to the Wall Street Journal.

His firm, Paulson & Co., plans to launch a fund January 1st dedicated to gold mining shares and other bullion related investments, the newspaper reported.

Mr. Paulson, who is estimated to be worth about $6 billion. His bet against real estate and banks between 2007 and 2009 reportedly netted his hedge fund about $20 billion.

On Thursday, the World Gold Council reported that demand for the precious metal increased 10% in the third quarter from the previous three month period, driven by investors looking for a currency hedge and more jewelery purchases.

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Jim Sinclair’s Commentary

Shocking and hard to believe, but real.

Do you want gold as insurance or the dollar long-term?

$4.8 trillion – Interest on U.S. debt
Unless lawmakers make big changes, the interest Americans will have to pay to keep the country running over the next decade will reach unheard of levels.
By Jeanne Sahadi, CNNMoney.com senior writer
Last Updated: November 19, 2009: 1:05 PM ET

NEW YORK (CNNMoney.com) — Here’s a new way to think about the U.S. government’s epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.

If that’s hard to grasp, here’s another way to look at why that’s a problem.

In 2015 alone, the estimated interest due – $533 billion – is equal to a third of the federal income taxes expected to be paid that year, said Charles Konigsberg, chief budget counsel of the Concord Coalition, a deficit watchdog group.

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Jim Sinclair’s Commentary

This has to do with internal currency related demand and is not a central bank purchase.

Vietnam to import 6 tonnes gold this month -State TV
Thu Nov 19, 2009 12:52am EST

HANOI, Nov 19 (Reuters) – Vietnam will import 6 tonnes of gold this month, state broadcaster VTV said on Thursday, after the central bank last week lifted a ban on imports to stabilise an overheating market.

So far, 1.5 tonnes had been imported, 500 kg each by Sacombank STB.HM, ACB ACB.NM and Eximbank EIB.HM.

Saigon Jewellery Corp (SJC) will import 1 tonne, and 500 kg being imported by Agribank Jewellery Company will arrive in a few days, the VTV 1 Financial bulletin said. (Reporting by Nguyen Nhat Lam and John Ruwitch

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Jim Sinclair’s Commentary

Things are happening faster than anyone anticipated.

The fabric of social order is under attack. The sheeple sleep on.

Oct. SSTF Report – We Are Now Living Off Of The Interest
Submitted by Bruce Krasting on 11/18/2009 09:02 -0500

The Social Security Trust Fund wracked up another monthly deficit for October. The shortfall was $4.2 billion. This is the 5th consecutive month of red ink for the Fund. The total for the period comes to $15bil. Blame the economy and the boomers for this problem. Some basic measures of the Fund’s performance are rapidly deteriorating.

A critical measure is the ratio of Payroll Tax receipts to Benefits paid. The following chart looks at that ratio over time. That ratio will fall below 1.0 for the full year 2009. As of today we are living off of the interest.

In November the SSTF will pay out $56.9 billion. They will be lucky to take in $47 billion in tax income. The deficit will be near to $10 billion. Interest income, and other income add another $140b annually to the Fund’s top line. But with monthly deficits of $10b on an operating basis, the Fund is running very close to break even for 2010. That possibility is not on anyone’s radar screen.

My estimate for benefits in 2010 is $756 b. If we assume total GDP growth of 2% the resulting ratio is 5.75%. That is up from 4% just a few years ago. It is rising fast. The following is from a CBO report on the Fund from August 2009. These guys think it going to 6% in 2030? This train will arrive 18 years early.

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Jim Sinclair’s Commentary

This is the new normal. How is this a foundation upon which an economic recovery can be firmly based?

Foreclosures will keep rising through 2010, report says
Mortgage Bankers Assn. says delinquencies and home repossessions have hit a new high. Blaming job losses for most of the pain, it sees a continued surge in foreclosures through all of next year.
By E. Scott Reckard
November 20, 2009

Home foreclosures are likely to keep climbing through all of next year despite stabilizing housing prices in some areas, a major lender group said Thursday as it reported that the level of delinquencies and repossessed homes had jumped to a record.

One in seven U.S. home loans was past due or in foreclosure as of Sept. 30, putting that quarterly delinquency measure at its highest level since 1972, when the Mortgage Bankers Assn. began reporting it. At the beginning of this year, 1 in 10 loans was past due or in foreclosure.

The continued surge in delinquencies suggests that a recovery in the housing market could be stalled by the worsening job picture as well as by further fallout from the easy-money lending that prevailed during the boom years.

Signals about housing have been decidedly mixed. On the bright side, median home prices appear to have stabilized — for the time being, anyway — in hard-hit areas of California such as the Inland Empire, and have begun to inch up again in San Diego and Orange counties and in San Francisco.

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Jim Sinclair’s Commentary

It is hard to navigate between the rogue waves of MOPE, but here is a stark reality. Mortgage backed securities are OTC derivatives.

Fed has biggest balance sheet since December.
The Fed’s balance sheet swelled to its largest point since December as its holdings in agency and mortgage-backed securities increased, data released Thursday showed. Balance sheet liabilities had expanded to $2.19T as of Nov. 19, the highest point recorded since liabilities hit $2.25T on Dec. 31, 2008. The Fed’s holdings of mortgage-backed securities increased to $847B, from $776B a week earlier, while its agency debt ownership rose to $153B from $150B. The Fed has said it will continue its support for markets with ongoing purchases of securities, buying $1.25T worth of mortgage-backed securities and $175B in bonds issued by Fannie Mae ( FNM), Freddie Mac (FRE) and the Federal Home Loan Bank System.

Jim Sinclair’s Commentary

Pakistan today.

Why Pakistan Won’t Fight the Afghan Taliban
By OMAR WARAICH / ISLAMABAD Friday, Nov. 20, 2009

President Barack Obama is about to announce his new strategy for Afghanistan, but the success of whatever option he chooses will depend heavily on Pakistan acting to stop its territory being used to attack Western forces next door. And that’s bad news, because the demands of its own domestic counterinsurgency campaign, doubts about the duration of U.S. commitment in Afghanistan and looming political instability in Islamabad have left Pakistan in no hurry to help out.

Obama’s National Security Adviser General James Jones last week visited Islamabad carrying a message from his boss to Pakistan’s President Asif Ali Zardari. The New York Times reported Monday that in the letter, Obama urged Zardari to rally his nation behind a joint campaign against militants who fight the Pakistani government and those who fight U.S. and allied troops in Afghanistan. Obama was also reported to have demanded more decisive action against al-Qaeda leaders hiding in Pakistan’s tribal areas. In return, he reportedly offered a range of fresh incentives, "including enhanced intelligence sharing and military cooperation."

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CIGA Bruce (below) says stop watching. Gold is going to a minimum of $1650.

Jim Sinclair’s Commentary

The following article by Armstrong presents conclusions based on fact, not opinion. It makes present time comparisons that must draw your attention to the equity markets in the Weimar experience.

It helps explain the increasing prices of goods and materials in a period of at best modest demand. It refers to the large currency exiting from the US, which may well have to do, among others things, with those huge profits made since April of 2009 by the financial industry.

It is a thesis, as I see it, for Martin Armstrong’s courage to state, at risk to all he has, his reputation in markets, the conclusion that gold is going to $5000.

It explains the stair step that Trader Dan has been outlining for us. This is a time for data, not opinions as opinions lead to confusion. Data leads to actionable conclusions.

It is more foundation for me to say gold will trade at $1224, $1278, $1650 and then of to Alf and Armstrong’s numbers.

Conclusions most recently from Martin Armstrong concerning the trend of dollar outflows:

“ What we must do is dissect the whole economic structure and study HOW it works in order to understand the solutions. We cannot proceed just on OPINIONS. Where’s the proof? Where’s the study? Where is the evidence of what you say is correct?

What has taken place over the years post World War Two is that the concentration of wealth in the United States caused a false sense of invincibility. The housing market had a good run. From roughly the 1955 period, we have seen about a 52-year rally into 2007. It appears we may have reached a major high in real estate and this is of great concern. For if this is the case, then what in fact we are actually looking at is a serious contraction in what people believe has been their long term Piggy Bank.

This trend is converging with the retirement of the baby boomers. It is also converging with the securitization of real estate pools that created the 2007 high in February. This combines even still with the dangerous problem we have of the debt that is also starting to implode on a STATE and NATIONAL basis.

Effectively, because we are not the financial capital of the world as we were in the 1930s, the trend that emerges will be different as well. When capital was fleeing Europe and rushed to the dollar driving that up in price so that we then turned to protectionism, the opposite is now taking place whereas the dollar is falling as capital is fleeing, so if we see anything, the high degree of imports will be inflationary in the US, not deflationary.

With the banking system still in deep denial and capital beginning to show signs of caution shortening its maturity even in sovereign debt, the long-term horizon will also collapse. The more difficult it becomes to fund long term, the greater the deflationary effect will be in housing. Never the less, this will not (deflation) be any national trend.

What we have is an inflation pressure in other sectors that we will see manifested in stocks and commodities. It is the real estate that is still leveraged and will take a serious impact upon exclusively real estate. If funds are not available to provide long-term mortgages, then the prices in this sector will continue to fall. That is not the same fate that is shares by the rest of the financial world.

It is the lack of liquidity in the real estate market that is the problem. Prices reflect the ability to borrow 30 years of future income. As that contract, prices collapse.

We do not have that of leverage in stocks and commodities.

Consequently, The future that lies ahead is not as easy as most would want you to think. The core interrelationships will shift and change. We are facing a serious problem with the real estate sector as a whole, and this will be reflected again in the second phase of the major crash that began 2007.15 precisely to the day. The banking crisis is not over either. As this turmoil brews you will see every fundamental idea of how market function will be laid bare on the sidewalk of ruin. This is not the time for opinions. This is time for serious work."

Jim Sinclair’s Commentary

Along with Trader Dan’s presentation of US international debt, consider this fact as a reason why $1650 may well be wrong and $5000 be right.

Chinese consumers embrace gold
By Chris Flood , Financial Times, 19 Nov 2009

Chinese consumers’ demand for gold reached record levels in the third quarter as the 60th anniversary of the founding of the People’s Republic of China on October 1 provided a boost to sales of jewellery and commemorative items.

Consumer demand for gold in China reached 120.2 tonnes in the third quarter, up 12 per cent on the same period last year, while jewellery demand increased 8 per cent to 93.5 tonnes, according to the World Gold Council which released its latest supply and demand update on Thursday.

The rapid growth in China’s gold jewellery market following years of import and price controls runs in parallel with a huge expansion in the country’s platinum jewellery market where demand is on course to double this year, according to a report by Johnson Matthey released earlier this week.

However, China was the sole market to see positive growth in gold jewellery demand in the third quarter with large year-on-year falls being recorded in India and the Middle East.

India, still the world’s largest gold jewellery market, saw demand fall to 111.6 tonnes in the third quarter, down 42 per cent year-on-year.

The WGC said high gold prices were the biggest constraint on India’s gold jewellery demand along with the poor monsoon which affected incomes in rural areas.

However, jewellery demand in India has shown an improvement in 2009 after dropping to its lowest levels in at least twenty years in the first three months of this year.

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Jim Sinclair’s Commentary

Wall Street is booming while Main Street is suffering.

Mortgage delinquencies hit record high
Mortgage group’s quarterly report raises worries about housing recovery
updated 11:37 a.m. ET, Thurs., Nov . 19, 2009

WASHINGTON – A rising proportion of fixed-rate home loans made to people with good credit are sinking into foreclosure, adding to concerns about the strength of the economic recovery.

Driven by rising unemployment, such loans accounted for nearly 33 percent of new foreclosures last quarter. That compares with just 21 percent a year ago, when high-risk subprime loans made during the housing boom were the main reason for default.

At the same time, the proportion of homeowners with a mortgage who were either behind on their payments or in foreclosure hit a record-high for the ninth straight quarter.

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Jim Sinclair’s Commentary

A step closer, but the battle will be Royal.

Panel votes to audit the Fed; cap its spending at $4 trillion
Measure would audit the Fed’s monetary policies such as interest rates
By Ronald D. Orol, MarketWatch

WASHINGTON (MarketWatch) — Rep. Ron Paul, who has sought to audit the Federal Reserve for 26 years, has inched ever so much closer to his goal.

A key congressional panel on Thursday approved legislation introduced by the Texas congressman that – for the first time in the central bank’s 95-year-history — would require government audits of Federal Reserve monetary policy, as well as how much the central bank has lent and will lend to specific banks.

Fed Chief Ben Bernanke and other key members of the Obama administration, including Treasury Secretary Tim Geithner, had vigorously opposed the move.

The measure was approved by the House Financial Services Committee as it considered broad bank regulatory reform legislation, and included a package of other measures weakening the Fed’s power and capping how much it can lend or guarantee.

The committee is now poised to pass the entire bill and has scheduled its final vote on the legislation for December 1.

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Jim Rickards: If gold is money again, it goes to between $4,000 and $11,000
Submitted by cpowell on 01:25PM ET Thursday, November 19, 2009. Section: Daily Dispatches
4:15p ET Thursday, November 19, 2009

Dear Friend of GATA and Gold:

Jim Rickards, director of market intelligence for McLean, Virginia-based consulting firm Omnis, was allowed onto CNBC again today to make gold-friendly comments. You may recall his blunt statement on CNBC back in September: "When you own gold, you’re fighting every central bank in the world":

http://www.gata.org/node/7835

Today Rickards remarked that the United States and China are devaluing their currencies against each other in a game of chicken, that gold should easily reach $2,000 per ounce next year just as a matter of supply and demand, and that if gold should start being considered money again, it would have to rise to between $4,000 and $11,000 to support the big increase in the world’s money supply.

You can watch Rickards’ comments at the CNBC archive here:

http://www.cnbc.com/id/15840232?video=1336090735&play=1

Just please don’t tell CNBC that this is all GATA-type stuff.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Jim Sinclair’s Commentary

Stay the Course! What do you think your class 2 gold shares will be earning at $5000 gold?

What do you think these shares will be worth if your management cares more for their stockholders than their own pocket, and pays out in gold or cash as dividends?

Is $6,300 fair value for gold?
By Ambrose Evans-Pritchard
Last updated: November 19th, 2009

The last parabolic spike in gold took off when central banks joined the fray in the 1970s, hoarding bullion with the same enthusiasm as gold bugs.

Dylan Grice from Société Générale says it smells much the same today.

He sees an eery similarity between the decision of India’s central bank to buy half the IMF’s entire sale of gold, and the move by France’s central bank to start converting dollars into gold in 1965 — which was, of course, the start of the slippery slope leading to the collapse of Bretton Woods and the closure of the US gold window under Nixon.

In the gold mania that followed, the price rose to levels that matched the US dollar monetary base (it reached 140pc at the peak). If that were to occur today after Ben Bernanke’s go at the printing press, gold would have to reach $6,300 an ounce. The US owns 263m ounces of gold while the Fed’s monetary base is $1.7 trillion. Simple equation.

Gold has had its ups and downs, of course. It is trading today at roughly the same real price as in the mid-13th Century — when an ounce bought a light suit of chain mail.

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Jim Sinclair’s Commentary

Stay the Course.

Think $1224, $1278, $1650 and then on to the Alf and Armstrong’s numbers.

Gold price may move into uncharted territory
18 Nov 2009, 2100 hrs IST, REUTERS

LONDON: With record-high gold moving further into uncharted territory, analysts who study past chart patterns to predict future behaviour are getting acclimatised and see any correction as an opportunity to lengthen exposure.

Even as chart signals show signs of strain they say the market’s long-term uptrend is intact, in line with the dollar’sdownward trajectory, with prices targeting $1,200 an ounce by the end of 2009 and an eventual target of $1,500 by mid-2010.

Gold has stunned bulls and bears alike, racing up some 30 percent this year to date and registering a record high at $1,149.15 earlier on Wednesday.

On a fundamental basis the market has found plenty of support, moving as a function of the dollar’s weakness. Central banks have come into play, with Asian giants China and India emerging as buyers, while worries aboutinflation have also brought out the metal’s attraction as a hedge.

From a technical standpoint, the rally looks tired. Gold’s Relative Strength Index (RSI), measuring the velocity and magnitude of price direction, stands at 81.7 on a 14-day basis — a rise above 70 indicates that the market is overbought.

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Jim Sinclair’s Commentary

This is demand driven.

U.K. Royal Mint Quadruples Production of Gold Coins (Update1)
By Thomas Biesheuvel and Nicholas Larkin

Nov. 19 (Bloomberg) — The U.K.’s Royal Mint, established in the 13th century, more than quadrupled production of gold coins in the third quarter after demand for the metal increased as investors sought to hedge against a weakening dollar.

Output rose to 32,735.8 ounces from 7,500.2 ounces a year before, according to data obtained by Bloomberg News under a Freedom of Information Act request. Production in the first nine months more than tripled to 100,391.3 ounces, the data show.

Gold is set for a ninth annual gain as countries have cut interest rates to near zero percent and spent $2 trillion to pull the global economy out of the worst recession since World War II. The metal reached a record in London yesterday and has gained about 30 percent this year, while the dollar has dropped 7.8 percent against a basket of six currencies.

“There’s still a total lack of confidence in the financial system,” David Russell, a director at Dublin-based brokerage and bullion dealer GoldCore Ltd., said in an interview. “Investors are seeing the benefits of diversifying into gold. Smaller investors are clued into the fact that inflation possibilities are a worry for the future.”

Sales of American Eagle gold coins by the U.S. Mint more than doubled in the first nine months to 954,000 ounces, its Web site showed. Harrods Ltd., the London department store, began selling gold bars and coins for the first time in October.

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Jim Sinclair’s Commentary

There is a war here in which politics want influence over banks for Fed decisions.

One way is by loading the entire Fed line of command.

Fed Presidents, Lawmakers Step Up Clash on Appointment Process
By Scott Lanman

Nov. 19 (Bloomberg) — Federal Reserve regional bank presidents and U.S. lawmakers intensified a clash over giving Congress a greater say in appointing the central bank officials, who are now named in part by private-sector banks.

St. Louis Fed President James Bullard said yesterday proposed legislation to subject some officials to Senate confirmation is a “blatant politicization” of the Fed. Separately, seven House Democrats called for an “exploration of possible changes” in how the Fed is governed, saying there’s an “inherent conflict” in the way presidents are named.

Proposed legislation in the Senate risks higher inflation if there’s too much political pressure on the Fed to keep interest rates low while the economy rebounds, some former Fed officials say. Lawmakers say private-sector banks have too much influence at the Fed, and that the regional Fed bank presidents focus too much on inflation at the expense of job growth.

“This is going to be a big battle,” said former Fed Governor Lyle Gramley, now a senior economic adviser to New York-based Soleil Securities Corp. “The danger is the new arrangement will politicize the Fed to the point that they don’t do what’s necessary” when the central bank needs to raise interest rates, he said.

The powers and autonomy of the 12 regional Fed presidents are under threat on several fronts in Congress.

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Jim Sinclair’s Commentary

Ignore the top callers and stay the course!

Housing savant Paulson now looks to gold
Paulson & Co. to buy shares of gold-related investments in 2010. Paulson to invest $250 million.
By Hibah Yousuf, CNNMoney.com staff reporter
Last Updated: November 18, 2009: 6:13 PM ET

NEW YORK (CNNMoney.com) — Billionaire John Paulson, who earned his hedge fund billions when he bet against the housing bubble, is waging a new noteworthy bet.

Paulson is investing as much as $250 million in a new gold fund next year.

His hedge fund, Paulson & Co., will launch the fund Jan. 1, 2010 and will buy shares of gold miners and make other investments related to the precious yellow metal, a source familiar with the firm’s plans told CNNMoney.com. Paulson discussed the fund at a meeting with investors on Tuesday

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Jim Sinclair’s Commentary

Business may be booming on Wall Street, but main street is deep in the non retrievable tank.

U.S. Mortgage Delinquencies Reach a Record High
By DAVID STREITFELD
Published: November 19, 2009

Nearly one in 10 homeowners with mortgages were at least one payment behind in the third quarter, the Mortgage Bankers Association said Thursday.

That is the highest figure since the association began keeping records in 1972. It is up from about one in 14 mortgage holders in the third quarter of 2008.

“Clearly the results are being driven by changes in employment,” Jay Brinkmann, the association’s chief economist, said on a conference call with reporters. Five million more unemployed people over the last year has turned into about two million more overdue loans, he added.

The association’s delinquency numbers do not include those who are actually in foreclosure, a figure that also rose sharply, to 4.47 percent of all loans. A year ago, it was 2.97 percent.

The combined percentage of those in foreclosure as well as delinquent is 14.41 percent, or about one in seven mortgage holders. About 52 million homeowners have mortgages.

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Jim Sinclair’s Commentary

In today’s speculative world of mega-bucks what difference does position limits make?

The answer is absolutely nothing

Sharks off the British coast: Oil tankers refuse to unload until prices rise… keeping YOUR fuel costs soaring
By RAY MASSEY
Last updated at 12:09 PM on 19th November 2009

These tankers have been parked off our shores for months, refusing to unload their oil until prices have risen even higher. The delay makes millions for speculators… and keeps your petrol costs soaring.

Laden with fuel, three oil tankers sit idly within sight of the British coastline, playing a waiting game that is driving up petrol prices for hard-pressed motorists.

They are part of a flotilla of ten vessels refusing to unload their cargo until market speculation has driven up its price to the level they want.

And as the value of that cargo is currently rising by over £1million a day, driven partly by profiteering traders and speculators, it is unlikely to see a petrol station any time soon.

With such tactics, it is not hard to see why prices at the pumps are forecast to have risen by 26 per cent in a year by this Christmas.

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Jim Sinclair’s Commentary

Do not give up your gold insurance as top callers would like you to. Think $1650 and then think Alf and Armstrong.

Read this for an excellent outline of the Formula on a worldwide basis.

Food inflation in India is plus 14.55%

States faced with three brutal options in 2010: inflation, high taxation or default
- Public announcement GEAB N°39 (November 16, 2009) –

16/11/2009

As anticipated by LEAP/E2020 last February, in the absence of major reappraisal of the international monetary order, the world is now entering the phase of geopolitical dislocation of the global systemic crisis. In 2010, as protectionism and the economic and social depression will gain momentum, a large number of States will be compelled to choose between three brutal options: inflation, high taxation or defaulting on their debt. A growing number of countries (USA, United Kingdom, Euroland [1], Japan, China [2],…) have used all their budgetary and monetary cartridges in the 2008/2009 financial crisis and are now left with no other alternative. Nevertheless, out of ideological reflex or in an attempt to avoid by any means having to make such painful choices, they will try to launch new stimulus plans (under different names) even though it is now clear that the huge public effort made in the past months to boost the economy is having no impact on the private sector. Indeed the consumer-as-we-knew-him in the past decades is dead, with no hope of resurrection [3]. Knowing that nearly 30 percent of Western countries’ economies are now made of « economic zombies » (financial institutions, companies and even states, whose signs of life are only due to central banks’ liquidity injections), it is possible to confirm the inevitability of the “impossible recovery” [4]. The international and social (within each country) « everyman for himself » rule is beginning to prevail, as well as a general impoverishment of the ex-Western world, United States in the first place. In fact the West is being scuttled by leaders unable to face the reality of a post-crisis world, who keep resorting to methods from yesterday’s world despite their proved inefficiency.

In this 39th issue of the GEAB, our team has therefore chosen to develop anticipations on general developments in 2010, a year when key states will see their choices be restricted to three brutal options, inflation, high taxation or default, which they will struggle to escape from in vain. Knowing that one of the reasons why stimulus plans are doomed to fail is that the consumer-as-we-knew-him in the past thirty years is dead, we analyze this phenomenon in this issue of the GEAB, as well as fallout for companies, and for the marketing and advertizing businesses. In the field of geopolitics, we present a number of LEAP/E2020 anticipations regarding Turkey by 2015 with regards to both NATO and the EU. Of course, we also present our usual monthly recommendations, as well as the results of the last GlobalEurometre survey.

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Jim Sinclair’s Commentary

There are so many next disasters out there that there is no chance of the anything but expansion in monetary and now fiscal policy.

Have you noticed the boom in road building?

Toll warns of FHA train wreck.
Homebuilder Toll Brothers (TOL) said the FHA has created a potential "train wreck" because it insures home purchases made with down-payments as small as 3.5%. FHA loans accounted for about 8% of the mortgages Toll closed last quarter, while the agency guarantees 20% of all single-family loans. While the FHA’s insurance reserve ratio has fallen to an all-time low, a senior government official denied that the FHA is the next sub prime mortgage crisis.

Jim Sinclair’s Commentary

Pakistan yesterday.

19 slain in courthouse bombing in Pakistan
Blast is seventh attack in less than two weeks in troubled northwest region

PESHAWAR, Pakistan – A suicide bomber killed 19 people Thursday outside a courthouse in northwestern Pakistan, the latest attack in an onslaught by Islamist militants fighting back against an army offensive in the nearby Afghan border region.

The bombing was the seventh attack in less than two weeks in and around Peshawar, the largest city in the northwest. The attacks have killed more than 80 people.

The bomber, who arrived in a taxi, was being searched by police officers at the gate of the city’s lower court when he detonated explosives on his body, government official Sahibzada Anees said.

Several damaged motorbikes were strewn about the site, and firefighters sprayed water on a charred, smoking white car.

‘Beasts … killing our children’

Dr. Saib Gul of the city’s Lady Reading Hospital said 19 people were killed in the attack and 51 had been wounded. At least three of the dead were police.

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You really think this gang would get on the same page or be quiet.

St Louis Fed President Bullard’s comments on interest rates weighed on the dollar. Bullard said it was possible that the Fed will not raise rates until 2012 if the Fed waits as long as it did to raise rates after the last two recessions.

Jim Sinclair’s Commentary

Ok, so what’s your wager? Will this be settled or tried?

I will go with settled.

Bank of America, UBS, JPMorgan Sued Over Derivatives (Update1)
By Joel Rosenblatt

Nov. 17 (Bloomberg) — Bank of America Corp., UBS AG and JPMorgan Chase & Co. were sued by a California public utility over claims they rigged sales of municipal derivatives and shared illegal profits through kickbacks.

The lawsuit, filed by the Sacramento Municipal Utility District, is based on federal and state antitrust claims. It alleges Charlotte, North Carolina-based Bank of America and more than a dozen other banks conspired to pre-select winners of municipal derivative auctions, coordinated their pricing, and accepted kickbacks disguised as fees from co-conspirators.

The allegations resemble those made by a U.S. grand jury in New York last month, according to the lawsuit filed Nov. 12 in federal court in Sacramento. CDR Financial Products Inc. founder David Rubin and two employees of the Beverly Hills, California- based company were indicted for allegedly accepting kickbacks on investments sold to local governments. CDR is also named as a defendant in the Sacramento case.

The banks engaged in “allocating customers and markets for municipal derivatives, rigging the bidding process by which municipal bond issuers acquire municipal derivatives, and conspiring to manipulate the terms that issuers received,” according to the lawsuit.

The charges against Rubin and the CDR employees were the first to result from a more than three-year investigation into bid-rigging in the municipal bond market. The probe is continuing and has already drawn in some two dozen banks, insurers and local government advisers.

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Jim Sinclair’s Commentary

Business on Wall Street is wonderful and everywhere else it is a nightmare.

Delinquencies, Foreclosures Soared in September
Published: Nov. 9, 2009

Delinquent Mortgages and, Foreclosures Soared in September

Today one out of every eight American homeowners with a mortgage (12.5 percent) is either in foreclosure or delinquent in their payments.

Record high rates of foreclosures and delinquencies in September are the latest bad news in the October 2009 Mortgage Monitor LPS, a leading provider of mortgage performance data and analytics.

The nation’s September 2009 foreclosure rate rose to 3.12 percent – a month-over-month increase of 2.6 percent and a year-over-year increase of 88.9 percent. Among individual states, Florida posted the most troubling results with 10.4 percent of loans

in foreclosure, and more than 22 percent of loans reported as non-current.

LPS’ also found large "shadow" foreclosure and REO inventories─loans and properties stuck in the already clogged pipeline that have yet to complete foreclosure and come to market. The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of foreclosures is on the way. Nearly one-third of foreclosures remain in pre-sale status after 12 months – twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further.

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Jim Sinclair’s Commentary

In the second great depression, gold companies went from relatively small to large dividend payouts.  The same will happen in the third great depression.

Royal Gold Raises Common Stock Dividend 13% to $0.36 Per Share
November 18, 2009 10:00 AM Eastern Time

DENVER–(BUSINESS WIRE)–Royal Gold, Inc. (NASDAQ:RGLD ) (TSX:RGL), a leading precious metals royalty company, today announced that its Board of Directors increased the Company’s annual dividend for its shares of common stock from $0.32 to $0.36, payable on a quarterly basis of $0.09 per share. Royal Gold has steadily increased its annual dividend since it first issued a $0.05 annual payment for calendar year 2000.

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Jim Sinclair’s Commentary

From the worthy subscription service www.shadowstats.com

- Annual October CPI-U Inflation -0.18% (+7.1% SGS)

Jim Sinclair’s Commentary

Soon to commonplace.

Employers to be hit with big fee jump for unemployment
Tuesday, November 17, 2009

PASCO COUNTY (Bay News 9) — Owning a small business can be difficult and starting soon local entrepreneurs will be dishing out a lot more cash to the government.

The annual fee employers pay to fund unemployment benefits is about to go up drastically.

The fee is jumping from $8.40 per employee to $100.30.

"That’ll have a huge burden on the small business man and woman — any business in the state of Florida — who are struggling right now," said state

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Jim Sinclair’s Commentary

JB Slear says "With credit card companies reducing limits, and banks refusing to give loans, how is this even be taken seriously?"

Geithner Says Banks Have ‘Obligation’ to Lend More (Update1)
By Rebecca Christie

Nov. 18 (Bloomberg) — Treasury Secretary Timothy Geithner urged U.S. banks to boost lending to small businesses and consumers who still face “very challenging” credit conditions and rising unemployment.

“Banks bear some responsibility for the extent of the damage caused by the crisis,” Geithner said today at a small- business conference in Washington. “You carry a substantial obligation to help our communities get back on their feet.”

Bank of America Corp.’s total loan originations in September fell 6 percent to $53.6 billon from a month earlier and Wells Fargo & Co.’s new lending dropped 14 percent to $47.4 billion, a Treasury Department report two days ago showed. The monthly surveys show lending patterns by the biggest banks receiving government funds from the $700 billion Troubled Asset Relief Program.

As the Obama administration moves from “rescue” policies to what Geithner called the “repairing and rebuilding” phase, joblessness last month reached a 26-year high of 10.2 percent. The Treasury chief today said the administration is committed to doing more to help small businesses get credit needed to “grow and hire new workers.”

Goldman Sachs Group Inc. announced plans yesterday to join Warren Buffett to provide assistance to 10,000 small businesses in the U.S. The $500 million charitable effort aims to provide help ranging from counseling to obtaining funding. Buffett’s Berkshire Hathaway Inc. is the largest shareholder in New York- based Goldman Sachs.

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Jim Sinclair’s Commentary

It is true. It is sad. The result will be the same but sooner.

Smith triumphs, Marx fails, Asia rises and the West declines.

Now do you understand the LONG TERM dollar problem? Do not give up your insurance.

China turns to Adam Smith
It won’t surprise you to learn that whereas in one hemisphere sales of Marx’s Communist Manifesto have rarely been stronger, the other is devouring Adam Smith like never before.
Published: 9:01PM GMT 16 Nov 2009

What is more unexpected is that it is China that has an appetite for the father of modern capitalism, while the West is rediscovering Marx.

Smith’s first masterpiece, theTheory of Moral Sentiments, has been translated into Chinese for the first time, and Chris Berry, professor at Glasgow University, where Smith wrote the book, will next week deliver lectures on it at Fudan University in Shanghai.

China’s Premier, Wen Jiabao, has said he often carries the work – which preceded his more famous work The Wealth of Nations – in his suitcase when he goes abroad. Prof Berry said the earlier book emphasised the importance “not only [of] their material prosperity but also their moral welfare”.

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Jim Sinclair’s Commentary

Just to make it official…

Friction between Obama and Hu on yuan.
Despite repeated urging by President Obama of Chinese President Jintao to liberalize the yuan-dollar peg, the joint statement issued by the two leaders after today’s meeting made no mention of foreign exchange. Hu used the meeting to complain about recent U.S. trade measures that placed tariffs on Chinese exports of pipes and tyres. In its third-quarter report last week, China alluded to freeing up the yuan, but since then the bank has been chiding the U.S. about letting its loose money policies incite speculation against the greenback.

Jim Sinclair’s Commentary

This is the greatest ever disincentive for financial institutions to behave themselves.

If good banks must bail out bad banks, why be a good bank?

You have to believe that none can be this stupid.

Who should pay for ‘too-big-to-fail?‘
The House Financial Services Committee agreed to include in the proposed banking reform bill a provision to require banks and funds to make payments in advance to provide for companies deemed ‘too-big-to-fail,’ aimed at insuring taxpayers don’t wind up footing the bill when banks go bust. "Wall Street companies and executives should have to pay for their own mistakes," said Rep. Paul Hodes, D-N.H., the provision’s author. But the amount to be collected from the industry is to be capped at $200B. A similar bill making its way through Senate would permit bank regulators to use taxpayer funds to dismantle a failed institution, and later recoup those costs from the industry.

Jim Sinclair’s Commentary

For your information.

IRS divulges deal with Switzerland.
The Internal Revenue Service on Tuesday released the terms of its banking secrecy deal with Switzerland. The banks must reveal the names of U.S. depositors who do not file a W-9 form for three years. But the deal only applies to depositors who had more than CHF1M ($992,802) in their accounts at any time from 2001 through 2008, and which generated average annual revenue of more than CHF100,000 ($98,892) over three years. The deal dates from the time UBS (UBS) agreed to pay the U.S. government $780M to avoid prosecution on tax evasion charges. The deal was the result of protracted negotiations between the two countries.

Jim Sinclair’s Commentary

Regardless of PR hounds’ top calling and TA overbought indicators. do not sell your insurance.

Société Générale tells clients how to prepare for ‘global collapse’
Société Générale has advised clients to be ready for a possible "global economic collapse" over the next two years, mapping a strategy of defensive investments to avoid wealth destruction.
By Ambrose Evans-Pritchard
Published: 6:12PM GMT 18 Nov 2009

In a report entitled "Worst-case debt scenario", the bank’s asset team said state rescue packages over the last year have merely transferred private liabilities onto sagging sovereign shoulders, creating a fresh set of problems.

Overall debt is still far too high in almost all rich economies as a share of GDP (350pc in the US), whether public or private. It must be reduced by the hard slog of "deleveraging", for years.

"As yet, nobody can say with any certainty whether we have in fact escaped the prospect of a global economic collapse," said the 68-page report, headed by asset chief Daniel Fermon. It is an exploration of the dangers, not a forecast.

Under the French bank’s "Bear Case" scenario, the dollar would slide further and global equities would retest the March lows. Property prices would tumble again. Oil would fall back to $50 in 2010.

Governments have already shot their fiscal bolts. Even without fresh spending, public debt would explode within two years to 105pc of GDP in the UK, 125pc in the US and the eurozone, and 270pc in Japan. Worldwide state debt would reach $45 trillion, up two-and-a-half times in a decade.

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The more I understand about these bone-head bankers, the safer I feel knowing my hard earned bones are buried in the back yard. I ain’t tellin’ where though…

Dear Friends,

I have never seen a day with more meaning and less words.

The morning action in gold was rather spectacular in its firmness against market movement which usually would have resulted is some weakness.

Two more purchases of gold were made by central banks. While these purchases were not major in size, they were major in meaning.

The world has turned for gold in the circle of central banks, and for the dollar in terms of confidence.

Gold is headed to $1224, $1278 and $1650. Alf and Armstrong will be proved correct both in duration and upside.

Do not give up your insurance for any reason. Stay the course.

Regards,
Jim

Jim Sinclair’s Commentary

Nothing was muffed.

NY Fed failed to negotiate AIG concessions
Mon Nov 16, 2009 10:44pm EST
By David Lawder

WASHINGTON (Reuters) – The Federal Reserve Bank of New York used a weak negotiating strategy that failed to wring concessions from AIG trading partners last year, allowing them to reap nearly $30 billion in payments from U.S. taxpayers, a government audit report said on Monday.

The New York Fed had little room to maneuver after bailing out American International Group in September but failed to use what leverage it had when it later cut a deal with AIG counterparties, according to the report by the Troubled Asset Relief Program’s special inspector general.

This resulted in the New York Fed paying full market value for assets underlying credit default swaps written by AIG to banks such as Goldman Sachs, Societe Generale, Merrill Lynch and Deutsche Bank, the report said.

"The refusal of the FRBNY and the Federal Reserve to use their considerable leverage as the primary regulators for several of the counterparties, including the emphasis that their participation in the negotiations was purely ‘voluntary’ made the possibility of obtaining concessions from those counterparties extremely remote," TARP Inspector General Neil Barofsky said in the report.

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Jim Sinclair’s Commentary

Bernanke was clear. It was Yellen who was yelling.

She was called in to balance Bernanke after the Chairman gave the carry trade a full speed ahead signal.

Bernanke Predicts Economy Will Keep Growing
by Chris Arnold

Federal Reserve Chairmen Ben Bernanke pledged to keep interest rates low so the economic recovery will stay on track. In remarks to the Economic Club of New York Monday, Bernanke said he was worried that a weak job market could prevent the expansion from being as robust as he would like.

Click here to listen to the story…

Jim Sinclair’s Commentary

Do they see eye to eye, or are we on a path in trade of an eye for an eye?

Since the latter is probable this is bad news for the US dollar.

Obama-Hu joint news conference in Beijing
Tue Nov 17, 2009 2:08am EST

BEIJING, Nov 17 (Reuters) – Following are key quotes by U.S. President Barack Obama and his Chinese counterpart, President Hu Jintao, from their joint statement to the media in Beijing on Tuesday.

ECONOMY

HU JINTAO:
"We reiterated that we will continue to increase dialogue and cooperation on macroeconomic and financial policies and continue to consult, on an equal footing, to properly resolve and address economic and trade frictions, in a joint effort to uphold the sound and steady growth of our business ties and trade.
"I stressed to President Obama that under the current circumstances our two countries need to oppose all kinds of trade protectionism even more strongly."

BARACK OBAMA:
"Going forward we agreed to advance the pledge made at the G20 summit in Pittsburg and pursue a strategy of more balanced economic growth. A strategy where America saves more, spends less, reduces our long-term debt and where China makes adjustments across a broad range of policies to rebalance its economy and spur domestic demand. "I was pleased to note the Chinese commitment made in past statements to move toward a more market-oriented exchange rate over time."

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Jim Sinclair’s Commentary

The fall guy falls. GMAC says send more money, please.

GMAC Chief Ousted by Board
Former Citi Executive Takes Wheel; Speedier Revamp Sought as U.S. Readies More Aid
BY DAN FITZPATRICK AND DAVID ENRICH

In a surprise move, the head of GMAC Financial Services — the giant, taxpayer-supported auto lender — was ousted Monday.

The forced resignation of Alvaro de Molina after only 19 months as chief executive caps a series of clashes with regulators and mounting board frustration over his management of the Detroit company. GMAC, which finances inventory for thousands of car dealerships in the U.S., to date has received $12.5 billion in taxpayer money, giving the U.S. government a 35.4% stake and growing power over the firm’s trajectory.

Government officials said they made no suggestion to GMAC’s board to dump Mr. …

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Jim Sinclair’s Commentary

I might only have one eye, but this fellow must be missing both.

Fed’s Kohn sees no asset bubbles building in U.S.
Mon Nov 16, 2009 8:06pm EST
By Karen Pierog

CHICAGO (Reuters) – The Federal Reserve’s low interest rate policy is meant to encourage investors to move into riskier assets in order to promote economic recovery, and there are no signs currently the policy is resulting in the build-up of a U.S. asset bubble, the central bank’s number-two official said on Monday.

Fed Vice Chairman Donald Kohn said the recent rise in asset prices reflects several factors: the reversal of the "extreme panicky conditions" of late 2008, the turnaround in economic prospects, and ultra-low interest rate policies in the United States and other key economies.

Many investors, scarred by the damage wrought by the bursting of the housing bubble, are wary of the potential of new bubbles building as a result of ultra-low interest rates in key countries.

Kohn underscored why the low rates are critical to an economic recovery.

"One of the purposes of these policies is to induce investors to shift into riskier and longer-term assets in order to lower the cost and increase the availability of capital to households and businesses," Kohn said at an event co-sponsored by the Kellogg School and Northwestern University.

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Jim Sinclair’s Commentary

The will to make things right exists nowhere in management of financial affairs.

Since this is so, the dollar is finished.

The following is an example of why a matured democracy is destroyed by its chosen leaders on all levels.

Tax Carry-Backs, Or Political Payoffs?
November 16, 2009
Tom Lindmark

Gretchen Morgenson’s Times article today is enough to make you retch.

Buried in the law extending unemployment benefits and reauthorizing the tax credit for homebuyers was a “little” gift to any company that happened to lose money in the past five years. Here’s how she describes the largesse:

But tucked inside the law was another prize: a tax break that lets big companies offset losses incurred in 2008 and 2009 against profits booked as far back as 2004. The tax cuts will generate corporate refunds or relief worth about $33 billion, according to an administration estimate.

Before the bill became law, the so-called look-back on losses was limited to small businesses and could be used to counterbalance just two years of profits. Now the profit offset goes back five years, and the law allows big companies to take advantage of it, too. The only companies that can’t participate are Fannie Mae and Freddie Mac and any institution that took money under the Troubled Asset Relief Program.

Among the biggest beneficiaries are home builders, analysts say. Once again, at the front of the government assistance line, stand some of the very companies that contributed mightily to the credit crisis by building and financing too many homes.

Morgenson takes this travesty to task by focusing on the homebuilders. Fair enough. There are too many of them, they are financially in fine shape and based on recent history they appear to be managed by fools. Why they should receive such a gift is beyond comprehension.

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Jim Sinclair’s Commentary

The following says it all.

In times when no governments are considered worthy of trust, only gold is.

"British forces should buy off potential Taleban recruits with “bags of gold”, according to a new army field manual published yesterday."

Army tells its soldiers to ‘bribe’ the Taleban
From The Times
November 16, 2009

British forces should buy off potential Taleban recruits with “bags of gold”, according to a new army field manual published yesterday.

Army commanders should also talk to insurgent leaders with “blood on their hands” in order to hasten the end of the conflict in Afghanistan.

The edicts, which are contained in rewritten counter-insurgency guidelines, will be taught to all new army officers. They mark a strategic rethink after three years in which British and Nato forces have failed to defeat the Taleban. The manual is also a recognition that the Army’s previous doctrine for success against insurgents, which was based on the experience in Northern Ireland, is now out of date.

The new instructions came on the day that Gordon Brown went farther than before in setting out Britain’s exit strategy from Afghanistan. The Prime Minister stated explicitly last night that he wanted troops to begin handing over districts to Afghan authorities during next year — a general election year in Britain.

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Jim Sinclair’s Commentary

Small but still meaningful and spreading.

Sri Lanka buying gold ‘to diversify reserves’
Sat Nov 7, 7:43 AM

COLOMBO (AFP) – Sri Lanka’s central bank on Saturday said it has been buying gold to diversify its reserves amid volatile currency markets, days after India announced it had purchased 200 tonnes of the precious metal.

Central Bank assistant governor Nandalal Weerasinghe declined to confirm analysts’ estimates that the tropical island nation had purchased around five tonnes of gold.

"We have been observing that prices of gold have been going up so we have been strategically buying gold over the past several months as part of a reserve management process of diversifying our portfolio," he told AFP.

The price of gold hit a record high above 1,100 dollars an ounce in London trading on Friday following a report that Sri Lanka had joined India in purchasing the precious metal.

Weerasinghe did not disclose from which sources the bank was buying the gold or at what prices. He gave no breakdown of how much of the country’s more than five-billion-dollars in foreign reserves were held in gold.

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Jim Sinclair’s Commentary

Small but still meaningful and spreading.

International Monetary Fund
Press Release No. 09/413
Monday, November 16, 2009

The International Monetary Fund announced today the sale of 2 metric tons of gold to the Bank of Mauritius, the nation’s central bank. The sale was conducted on the basis of market prices prevailing on November 11, 2009 with proceeds equivalent to US$71.7 million (SDR 44.7 million).

This transaction is part of the total sales of 403.3 metric tons approved by the Executive Board in September 2009 (see Press Release No. 09/310), and it adds to the 200 metric tons already sold to the Reserve Bank of India (see Press Release No. 09/381).

As previously announced (see Press Release No. 09/310), in accordance with the guiding principle of avoiding disruption of the gold market, the IMF’s Executive Board adopted modalities for the gold sales consistent with guidelines it had earlier established. In particular, the Fund is standing ready for an initial period to sell gold directly to central banks and other official holders that may be interested in such sales.

Thereafter, on-market sales of any amounts remaining from the 403.3 tons would be conducted in a phased manner over time, following the approach adopted successfully by central banks participating in the Central Bank Gold Agreement.

As previously indicated, the Fund will inform markets before any on-market sales commence, and will report regularly to the public on progress with the gold sales.

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Jim Sinclair’s Commentary

MOPE snagged.

Congressman Blasts White House for Faulty Job Data on Government Web Site
Updated November 17, 2009

The government Web site — Recovery.gov — is under fire for posting a number of jobs created in congressional districts that don’t exist and for accepting unrealistic data from several reporting outlets.

The Democratic chairman of the House Appropriations Committee is demanding greater accountability from the Obama administration after gross inaccuracies were found on a government Web site that tracks jobs purportedly saved or created by the $787 billion stimulus plan.

In a statement late Monday, Rep. David Obey of Wisconsin, chairman of the House committee, called the inaccuracies "outrageous" and said the administration owes the American public "a commitment to work night and day to correct the ludicrous mistakes."

"Credibility counts in government and stupid mistakes like this undermine it," Obey said. "We designed the Recovery Act to be open and transparent and I expect the Recovery Accountability and Transparency Board, who oversees the recovery act Web site and data to have information that is accurate, reliable and understandable to the American public."

The site — Recovery.gov — is under fire for posting a number of jobs created in congressional districts that don’t exist and for accepting unrealistic data from several reporting outlets.

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Jim Sinclair’s Commentary

Governments running businesses have proven to be an oxymoron unless you mean running them down.

Post Office reports loss, may cut Saturday service
Agency continues to lose money despite $6 billion in cost-cutting measures, and proposes that it drop Saturday delivery.
By Hibah Yousuf, CNNMoney.com staff reporter
Last Updated: November 16, 2009: 5:58 PM ET

NEW YORK (CNNMoney.com) — The U.S. Postal Service reported a $3.8 billion loss in the 2009 fiscal year, and plans to propose to Congress in 2010 that it drop Saturday delivery.

The agency already reduced expenses by $6 billion during the year ended Sept. 30.

Those measures included eliminating 40,000 jobs, however the cash-strapped agency still employs over 712,000 people. The Postal Service also reduced overtime hours and lowered transportation-related costs.

Additionally, the USPS lowered the payments it made for retiree health benefits by $4 billion in fiscal 2009.

"To say this was a difficult year might be a bit of an understatement," said the USPS chief financial officer Joseph Corbett, on a conference call with the media. Corbett blamed the agency’s difficulties on the recession and "the continued migration [of customers] to electronic means."

Big changes

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Jim Sinclair’s Commentary

Plausible denial for snagged MOPE

Exclusive: Jobs ‘Saved or Created’ in Congressional Districts That Don’t Exist
Human Error Blamed for Crediting New Stimulus Jobs to Nonexistent Places
By JONATHAN KARL
Nov. 16, 2009

Here’s a stimulus success story: In Arizona’s 15th congressional district, 30 jobs have been saved or created with just $761,420 in federal stimulus spending. At least that’s what the Web site set up by the Obama administration to track the $787 billion stimulus says.

There’s one problem, though: There is no 15th congressional district in Arizona; the state has only eight districts.

And ABC News has found many more entries for projects like this in places that are incorrectly identified.

Late Monday, officials with the Recovery Board created to track the stimulus spending, said the mistakes in crediting nonexistent congressional districts were caused by human error.

"We report what the recipients submit to us," said Ed Pound, Communications Director for the Board.

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Jim Sinclair’s Commentary

Replace the dollar in terms of reserve currency, in time and to a significant degree.

An alternative to the dollar now? Yes, definitely.

The result is a lower dollar due to market momentum. As the dollar goes lower, up goes the call for a Super Sovereign Currency Unit.

IMF head eyes currency change
Alan Wheatley and Simon Rabinovitch

BEIJING — Reuters Published on Tuesday, Nov. 17, 2009 6:36AM EST Last updated on Tuesday, Nov. 17, 2009 11:30AM EST

The imperative of greater global currency stability means the world can no longer rely, as it has done since the end of the gold standard, on a currency issued by a single country, the head of the IMF said on Tuesday.

Dominique Strauss-Kahn, the managing director of the International Monetary Fund, restated his view that a new global currency might evolve out of the special drawing right, the Fund’s in-house unit of account.

“That probably has to be a basket,” Mr. Strauss-Kahn said of the eventual replacement for the dollar. “In a globalized world there is no domestic solution,” he told a forum.

Speaking later at a news conference, Mr. Strauss-Kahn reiterated the message that has been a constant refrain during his visit – that China needs a stronger yuan as part of a package of policies to help rebalance its economy by promoting domestic demand.

“For us, because it just is consistent with the new economic policy in China, the sooner the better. How fast? It will take time. It is not something which will change in one step overnight,” Mr. Strauss-Kahn said.

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Today the dollar made the Chairman look bad.

The Exchange Stabilization Fund will go to hell for that.

Jim Sinclair’s Commentary

Let’s have a big round of applause for the OTC derivative dealers and the Dark Side which has remade America into what it is today.

Report: More Americans going hungry
By Amy Goldstein
Washington Post Staff Writer
Monday, November 16, 2009; 3:14 PM

The number of Americans who lack dependable access to adequate food shot up last year to 49 million, the largest number since the government has been keeping track, according to a federal report released Monday that shows particularly steep increases in food scarcity among families with children.

In 2008, the report found, nearly 17 million children — more than one in five across the United States — were living in households in which food at times ran short, up from slightly more than 12 million youngsters the year before. And the number of children who sometimes were outright hungry rose from nearly 700,000 to almost 1.1 million.

Among people of all ages, nearly 15 percent last year did not consistently have adequate food, compared with about 11 percent in 2007, the greatest deterioration in access to food during a single year in the history of the report.

Taken together, the findings provide the latest glimpse into the toll that the weak economy has taken on the well-being of the nation’s residents. The findings are from a snapshot of food in America that the U.S. Agriculture Department has issued every year since 1995, based on Census Bureau surveys. It documents both Americans who are scrounging for adequate food — people living with some amount of "food insecurity" in the lexicon of experts — and those whose food shortages are so severe that they are hungry.

"These numbers are a wake-up call . . . for us to get very serious about food security and hunger, about nutrition and food safety in this country," Agriculture Secretary Tom Vilsack said during a briefing of reporters.

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Jim Sinclair’s Commentary

This important video speaks for itself.

 Court Orders Fed to Disclose Emergency Bank Loans (Update2)
By Mark Pittman

Aug. 25 (Bloomberg) — The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.

Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.

The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.

“The Federal Reserve has to be accountable for the decisions that it makes,” said U.S. Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee, after Preska’s ruling. “It’s one thing to say that the Federal Reserve is an independent institution. It’s another thing to say that it can keep us all in the dark.”

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- Reported October Retail Sales Boosted by Revisions and Inflation 
- Third-Quarter GDP Growth May See Some Downward Revision

BY subscription
"No. 258:  October Retail Sales "
http://www.shadowstats.com/

Jim Sinclair’s Commentary

No way will they be able to repay in the foreseeable future.

This is more MOPE nonsense.

Does Anyone Really Expect G.M. And Chrysler To Repay Billions In Loans?
November 15, 2009
Analysis by:  Jack Sayer

Summary

Top executives at General Motors and Chrysler have gone out of their way in the past week to say their once-bankrupt companies are positioning themselves to pay back the billions of dollars loaned to them by the federal government. Experts, however, say that billions of dollars are likely to be lost on the automotive bailout.

Analysis

GM is expected to report its third quarter financial results on Monday, giving the first comprehensive look at its balance sheet since it emerged from bankruptcy earlier this year. Regardless of how GM did in Q3, don’t expect a speedy payback of government loans.

Executives at GM and Chrysler have both gone out of their way in the past week to say their once-bankrupt companies are positioning themselves to pay back the tens of billions of dollars loaned to them by the federal government.

Others, however, including the special investigator, Neil Barofsky,  assigned to act as watchdog for the $700 billion TARP loans, said that while the companies may pay back some of the $65 billion extended to them, the U.S. probably won’t ever see full payback. Tens of billions of dollars are expected to be lost on the automotive bailout.

Earlier this month, a candid report from the GAO also threw cold water on the prospects of GM and Chrysler repaying the billions loaned to them.

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Jim Sinclair’s Commentary

The US dollar has immense problems. Now that the bailout box is open, it cannot be closed.

How A Government Bailout Created Today’s Commercial Real Estate Catastrophe
John Carney | Nov. 16, 2009, 9:40 AM | 19,526

By now we all now that “the next shoe to drop” as a result of the bursting of the credit bubble is commercial real estate.

In a pattern familiar from the housing crisis, the value of commercial real estate has been plunging while the volume of distressed commercial real-estate loans is rapidly rising. The problems in commercial real estate could slam financial institutions, especially smaller regional and community banks, with billions of dollars in new losses. That, in turn, could snuff out whatever chances we have of a sustained economic recovery.

In some ways, this shoe has already dropped.

The MIT Real Estate Center said that commercial property prices has dropped almost 42% over the past 2 years.

As a result of that drop, about fifty-five percent the $1.4 trillion commercial mortgages that will mature in the next five years are underwater.

The delinquency rate for commercial mortgages climbed to 5% in October. A year ago the delinquency rate was just 0.77%.

About half of all commercial mortgages sit on the balance sheets of smaller banks. So the massive number of bank failures this year is significantly attributable to losses from commercial real estate.

Late last month, one of the largest commercial real estate finance companies in the world filed for bankruptcy.

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Jim Sinclair’s Commentary

Farmers have been the backbone of the Americas.

Since government has demanded the surrender of constitutional rights in exchange for assumed security, I am surprised it took this long to get around to my farming neighbors.

These guys are not sheeple.

Farmers, Ranchers Fighting Back Against FDA Tyranny Over Animal Farms
Monday, November 16, 2009 by: David Gutierrez, staff writer

(NaturalNews) A bill that would grant the FDA expanded authority to inspect farms has come under fire from ranchers and farmers concerned about increased government interference in their operations.

In response to a recent series of food-borne illness outbreaks, a bill has been approved by the House Energy and Commerce Committee that would allocate more money and authority to the FDA to fulfill its current food safety duties. Although technically the bill would not expand the FDA’s authority to foods currently supervised by the Department of Agriculture (USDA) – meat, poultry and some egg products – many farmers and their advocates are concerned that the language of the bill is too vague to ensure against this.

"Live animals are not ‘food’ until the point of processing, which is why this bill needs to clarify that the FDA does not have regulatory authority on our farms, ranches and feedlots," said Sam Ives of the National Cattlemen’s Beef Association.

Even though the USDA has been involved in several recent recalls of beef products, its inspection procedures are usually considered stricter than the FDA’s, and the agency’s inspection program is also better funded. This has spared the USDA the criticism the FDA has faced after recent recalls of peanut butter, hot peppers and spinach.

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Jim Sinclair’s Commentary

The Secretary of the Treasury takes a licking but keeps on ticking.

The dollar takes a licking and will soon stop ticking.

China says Fed policy threatens global recovery
By Geoff Dyer in Beijing and Kevin Brown in Singapore
Published: November 15 2009 16:02 | Last updated: November 16 2009 02:14

The US Federal Reserve is fuelling “speculative investments” and endangering global recovery through loose monetary policy, a senior Chinese official warned on Sunday just hours before President Barack Obama arrived in China for his first visit.

Liu Mingkang, China’s chief banking regulator, said that the combination of a weak dollar and low interest rates had encouraged a “huge carry trade”that was having a “massive impact on global asset prices”.

The comments came as China and the US sparred at the Asia Pacific Economic Co-operation summit in Singapore over exchange rate policies amid rising international criticism that China’s currency is undervalued.

Mr Liu’s unusually blunt remarks underscore how China – the largest US creditor because of its massive holdings of Treasury bonds – has become a trenchant critic of monetary and fiscal policy in the US.

Since the start of the financial crisis, Chinese officials have issued a number of warnings that the US should not inflate away its mounting debt burden. Before these latest comments, however, Beijing had generally been most critical of US fiscal policy, urging Washington to spend less.

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Jim Sinclair’s Commentary

Saturday in Pakistan.

Suicide Car Bomb Kills 11 In Pakistan
November 15, 2009 9:45 a.m. EST
David Goodhue – AHN Reporter

Washington, DC (AHN) – Eleven people were killed and at least 26 were wounded when a suicide car bomber blew himself up at a police check point in Peshawar, Pakistan Saturday.

Among the dead are three women and three children, CNN reported. Shafi Ullah, deputy superintendent of police, said about 110 to 132 pounds of explosives were used to make the bomb.

Pakistani intelligence officials said the bomb was likely in response to Peshawar police operations to rout militants from the North West Frontier Province.

Peshawar was also the scene of a suicide bombing on Friday, which along with another in nearby Bannu, killed at least 17 people.

The Taliban claimed responsibility for those attacks.

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Jim Sinclair’s Commentary

Pakistan today.

Power struggle threatens Pakistan’s leader
Zardari attempting to fend off maneuvers by military, intelligence
By Robert Windrem

Pakistan’s civilian and military leaders are tangling in a series of political confrontations that could lead to a constitutional crisis or worse after the New Year, officials in both Islamabad and Washington tell NBC News.

With the tenor and volume of debate rising over America’s commitment to Afghanistan, that struggle is complicating U.S. strategy to stabilize the Afghanistan-Pakistan border

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It made Wall Street rich beyond their wildest dreams and parented a great equity rally, but did nothing whatsoever for Middle America, the real economy, nor did it fix the systemic OTC derivative problem lurking within the banking community.

TARP: One Year Later
Hank Paulson’s plan was supposed to save the economy. But did it end up merely enriching bankers?
By Matthew Philips | Newsweek Web Exclusive
Nov 12, 2009

On Nov. 12, 2008, Treasury Secretary Hank Paulson announced a dramatic shift in the strategy to deal with the rolling financial crisis. Rather than use the $700 billion TARP funds to buy troubled assets from banks, as originally promised, he would dole it out in the form of cash; capital injections in exchange for preferred stock. Kind of like shots of speed. Six weeks before, Paulson had gotten down on one knee to beg House Speaker Nancy Pelosi to support the original plans. But conditions had changed, Paulson argued. The economy was getting worse and he wasn’t going to apologize for adapting.

His first few press conferences were awkward, uncomfortable affairs, particularly the one on Sept. 15—the Monday that Lehman Bros failed—when he took a spot behind the White House press podium and, smiling nervously, began, “I hope you’ve all had a nice weekend … yeah.” The implication was that he, of course, had not, having spent his weekend deciding the fate of Lehman Brothers, and orchestrating the shotgun marriage between Bank of America and Merrill Lynch. In the early going, it seemed Paulson was cracking under the pressure, barely able to conceal the strain of holding the fate of the crumbling economy in his hands. During those first weeks of the financial crisis, the markets usually tumbled after a clunky Paulson press conference. Wall Street’s reaction Nov. 12 was no different. The Dow slid 411 points on news that the Treasury was no longer going to buy the toxic assets as it had promised.

To a degree, the announcement was a fait accompli. Paulson had already spent a large chunk of the authorized bailout funds, including $115 billion in strong-armed equity deals forced on the country’s nine largest banks and $40 billion to AIG. Populists were already grumbling that TARP was just a handout to the people who’d created the mess. Which is why Paulson sold the switch as one directed at consumers. With the securitization market at a standstill, consumer lending had effectively ceased. No student loans, no lines of credit, no mortgages. By injecting capital straight into banks and other financial institutions, Paulson grabbed hold of the biggest lever he could and gave it a hard tug. In a way, it was the nuclear option.

That was a year ago. And how has it played out? Critics say Paulson’s decision to switch up the TARP is at the root of the where we are today, with record Wall Street bonuses, zombie banks, and a festering bipartisan suspicion that nothing’s changed. Still, a closer examination shows that Paulson made the right decision. Its original inception was ill-conceived and would have likely led to an even bigger financial catastrophe. The problem isn’t that Paulson decided to give the banks the money, it’s that he didn’t ask for enough in return. Not to mention that TARP has been administered with a transparency that is at best opaque. Tracking the funds over the last year, figuring out who got what from where, has been like following laundered money, leading to a situation rife with conspiracy theories and potential conflicts of interest. “It hasn’t done what [Paulson] said it would,” says Jerry O’Driscoll, a former vice president of the Dallas Federal Reserve and a senior fellow at the Cato Institute. “Yes, it saved some banks from going under, but did it restore the health of the banking system? Absolutely not.”

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Jim Sinclair’s Commentary

Looks like a new joint Asian economic plan.

The West has no plan. Guess who will win.

APEC summit concludes, leaders issue declaration to urge new growth paradigm
2009-11-15 18:00:48
By Xu Lingui

SINGAPORE, Nov. 15 (Xinhua) — Leaders of the 21-member Asia- Pacific Economic Cooperation (APEC) on Sunday issued a declaration pledging to undergo economic structural reforms, resist trade protectionism in order to develop a new growth model to sustain the weak global recovery.

The declaration also marks the conclusion of the 8-day APEC Leaders Week meetings that drew thousands of the world’s top politicians, economists, businessmen at a time when the world economy, led by Asia, is recovering from the worst recession since the 1930s.

“Our robust policy responses have helped to set the stage for recovery. But economic recovery is not yet on a solid footing,” said the declaration, made public by Singapore Prime Minister Lee Hsien Loong, U.S. President Barack Obama, Japanese Prime Minister Yukio Hatoyama, Chinese President Hu Jintao and 18 other regional leaders.

“Looking beyond supporting the recovery, we recognize the necessity to develop a new growth paradigm for the changed post-crisis landscape. We cannot go back to ‘growth as usual’,” the declaration said.

Leaders vowed to put in place next year a comprehensive long-term growth strategy while maintaining the emergency stimulus policies — estimated at 1 trillion U.S. dollars — until a durable recovery has clearly taken hold.

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Jim Sinclair’s Commentary

It is as if debt was no problem at all. It is as if no one in command cares.

The dollar is a death throw.

U.S. Treasury Confident Congress Will Increase Debt Ceiling
By Rebecca Christie

Nov. 13 (Bloomberg) — The Obama administration is confident Congress will raise the country’s debt limit by year end to avert a showdown similar to the one that shuttered parts of the government in 1995, administration officials said.

The White House wants an increase of at least $1 trillion to $1.5 trillion, according to a person familiar with the deliberations between lawmakers and the administration. Record budget deficits are pushing the national debt closer to the $12.1 trillion statutory limit.

The administration’s request, higher than a proposed increase already passed in the House of Representatives, would get the government through the November 2010 midterm congressional elections without needing another increase. Earlier this month, Treasury officials acknowledged they’ll need more borrowing room by year-end to avoid market disruptions.

“Market participants still remain on edge, especially since many have concerns over the rising debt loads that were kicked off this year,” said George Goncalves, chief fixed- income rates strategist in New York at primary dealer Cantor Fitzgerald LP.

The administration officials said the White House is open to any legislative vehicle that will raise the debt limit, by any amount. Although the Obama administration has pledged to bring deficits down to “sustainable” levels in the longer term, Treasury Secretary Timothy Geithner has focused recently on the need to keep up spending on economic assistance programs until the unemployment rate, which reached a 26-year high of 10.2 percent in October, comes down.

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Jim Sinclair’s Commentary

Shocking. That is all I can say.

22 Percent of Florida Mortgages Non-Current
11 Nov 09

A staggering 22 percent of all mortgages in the state of Florida are non-current, according to a new report from Lender Processing Services.

By non-current, they mean loans that are either delinquent or in some stage of foreclosure; perhaps more troubling is the fact that 10.4 percent of home loans in Florida are in foreclosure.

The LPS October Mortgage Monitor also revealed that the nation’s foreclosure rate was 3.12 percent as of September 30, up 2.6 percent from a month earlier and 88.9 percent year-over-year.

And remember that’s with all the government intervention, foreclosure moratoria, loan modifications, and the like; the national mortgage delinquency rate was 9.37 percent as of September 30.

The report also highlights the large shadow inventory of foreclosed properties that could wreak havoc on home prices and a possible housing recovery.

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Jim Sinclair’s Commentary

Sparring is no way to treat your banker.

China is NOT dollar bound.

China-U.S. spar over currencies ahead of Obama visit
Sun Nov 15, 2009 4:08am EST
By Patricia Zengerle and Yoo Choonsik

SINGAPORE (Reuters) – The United States and China sparred over exchange rates at a meeting of Asia Pacific leaders on Sunday, pointing to tricky talks ahead for President Barack Obama when he flies to China to address economic tensions.

The discord surfaced at a summit of the Asia Pacific Economic Cooperation (APEC) forum in Singapore when a reference to ”market-oriented exchange rates” was cut from a communique issued at the end of two days of talks. An APEC delegation official said Washington and Beijing could not agree on the wording.

That underscored strains likely to feature when Obama flies to Shanghai later on Sunday following moves by Washington to slap duties on various Chinese-made products and a growing drumbeat of pressure on Beijing to let its yuan currency strengthen.

It also suggested investors should be cautious about betting on a yuan appreciation after a central bank statement last week appeared to give the green light for strengthening.

“China has pledged to keep monetary policy moderately loose, and their concern is still the economic recovery,” said currency strategist Enrico Tanu Widjaja at OCBC Bank in Singapore. “They will probably let the yuan strengthen when they start tightening policy.”

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Jim Sinclair’s Commentary

The timeline of the July 17th 2009 monetary summit meeting has expired.

China is not dollar bound.

UPDATE: China: Loose US Policy, Weak USD Creating Speculation
By Aaron Back and Juan Chen
* NOVEMBER 15, 2009, 4:47 A.M. ET

BEIJING -(Dow Jones)- China’s chief banking regulator on Sunday sharply criticized loose U.S. monetary policy, including the weak U.S. dollar, saying the situation is creating massive speculation in global asset markets.

The U.S. Federal Reserve’s promise to keep U.S. interest rates at extraordinarily low levels for an extended period “has already led to a massive U.S. dollar carry trade and massive speculation,” Liu Mingkang said at the International Finance Forum in Beijing, which began just hours before U.S. President Barack Obama was scheduled to land in China on his first ever visit.

Even as key trading partners like the U.S. and the EU and multilateral agencies like the World Bank and International Monetary Fund recommend more yuan appreciation, China – as the world’s biggest holder of U.S. Treasurys – continues to push back, defending its own exchange rate policy, while warning about unsustainable U.S. economic policies.

Liu said that the weak U.S. dollar and low U.S. interest rates are creating “unavoidable risks for the recovery of the global economy, especially emerging economies” and that the situation is “seriously impacting global asset prices and encouraging speculation in stock and property markets.”

The focus on the greenback has come after it sunk to a 15-month low last week. In a speech late Tuesday, Federal Reserve Bank of Dallas President Richard Fisher said he is aware that the Fed’s current stance of keeping interest rates low for an “extended period” was denting the dollar.

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The dark blue represent the worst state fiscal environment (similarity to California).

"Trends start in the West and move East across the country."
–Jim Sinclair

http://downloads.pewcenteronthestates.org/Beyond_California_Appendix.pdf

Jim Sinclair’s Commentary

Click the following image to see the progression of unemployment in the US.

Jim Sinclair’s Commentary

The more things change, the more they remain the same.

Here is an actual photograph of the "Black Board" gold price spike in 1869.

Jim Sinclair’s Commentary

Here is something else that will only be reported through YouTube and cell phone pictures. Don’t look for it on CNN or F-TV

The last 2,000,000 person march on Washington will never be in any history book. Remember what we said about the need for armed, trained, personal security to OTC derivative dealers?

God help Greenwich, CT if these people find out what populates it.

Trillions cannot buy you happiness or longevity. Maybe Madoff prefers being chased by Big Bad Tyrone over his investors.

Protesters Plan Huge Anti-Goldman Rally In Washington, DC
Joe Weisenthal|Nov. 13, 2009, 10:59 AM

Following Massive Showdown in Chicago…

Hundreds of Taxpayers to Converge on Goldman Sachs DC Headquarters Monday

National Mobilization Continues to Demand End to Multi-Billion Dollar Bonuses at Bailed Out Banks and the Too Big To Fail Doctrine, Calls for Congressional Action Now

Washington, DC—On Monday, SEIU President Andy Stern and hundreds of taxpayers will converge on the Washington headquarters of Goldman Sachs to demand an end to multi-billion dollar bonuses and the Too Big To Fail Doctrine and call for immediate Congressional action on real financial reform. This is the latest in a national mobilization launched last month as 5,000 taxpayers from 20 states converged on the American Bankers Association convention in Chicago to demand Wall Street and big banks stop fighting reforms that will protect our families from the next crisis.

As part of Monday’s event, Public Citizen will release a report analyzing how much the bailed out banks and the financial sector is spending in Congress to block financial reform.

WHAT:           Hundreds of taxpayers and community leaders to converge on the Goldman Sachs Washington, D.C. headquarters to demand an end to the Too Big To Fail doctrine, request that their projected $23 billion in bonuses and compensation go to foreclosure prevention programs, and call on Congress to take immediate action on reform.

WHEN:           Monday, November 16, 12:00 PM ET

WHERE:         101 Constitution Avenue NW; Washington, DC (off 1st Street NW)

WHO:             Andy Stern, President, Service Employees International Union
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Jim Sinclair’s Commentary

So far, every week, week after week, delayed so as not to disturb the social order, the death of financial entities is announced.

The public becomes habituated, and takes no notice.

If other institutions are penalized to pay for broken institutions why should any institution take care? Instead they will all gamble to the extreme. If they are punished anyway why not take all and any risk?

Government thought towards plugging the dyke only opens many more and dangerous holes. Eventually the government will run out of fingers and toes.

Bank Closing Information – November 13, 2009
These links contain useful information for the customers and vendors of these closed banks.
Pacific Coast National Bank, San Clemente, CA
Orion Bank, Naples, FL
Century Bank, FSB, Sarasota, FL

Jim Sinclair’s Commentary

Recall what was discussed about the July 17th China/USA economic summit?

"China, the largest foreign holder of U.S. Treasury securities, has expressed concern about the size of U.S. deficits. U.S. policy makers worry that alarm over deficits could push foreigners into cutting back on their purchases of Treasury debt. President Barack Obama will visit China as part of his current tour of Asia."

Obama eyes spending freeze to tackle deficits
Record imbalance could endanger economy, Democrats’ political prospects
updated 1:07 p.m. MT, Fri., Nov . 13, 2009

WASHINGTON – The Obama administration has alerted domestic agencies to plan for a freeze or even a 5 percent cut in their budgets, part of an election-year push to rein in record deficits that threaten the economy and Democrats’ political prospects next fall.

China, the largest foreign holder of U.S. Treasury securities, has expressed concern about the size of U.S. deficits. U.S. policymakers worry that alarm over deficits could push foreigners into cutting back on their purchases of Treasury debt. President Barack Obama will visit China as part of his current tour of Asia.

White House budget director Peter Orszag said Friday that it is imperative to start curbing the flow of red ink in coming years so as not to erode the fledgling economic recovery and raise interest rates. But he called it a balancing act and said acting too fast could undercut the recovery.

Orszag wouldn’t comment on the specifics of the upcoming budget, which will be unveiled in February, right after Obama’s State on the Union address in which the initiative is sure to be a major focus.

Democratic officials in the White House and on Capitol Hill say options for locking in budget savings include caps on the amount of money Congress gets to distribute each year for agency operating budgets. The officials spoke on condition of anonymity to frankly discuss internal deliberations.

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Jim Sinclair’s Commentary

A wasted warning. It has already happened.

Washington briefing: Turkey warned against distancing from West
by Emil Sanamyan
Published: Friday November 13, 2009

WASHINGTON – "Turkey’s leaders must not think that they can expand the country’s influence without first having a firm footing in the West," Morton Abramowitz, a former U.S. ambassador to Turkey, and Henri Barkey, a Turkey scholar, warned in an article they cowrote for the journal Foreign Affairs.

The two argued that while there has been much recognition of its economic and political progress "Turkey has not yet become the global, or even regional, player that its government declares it to be."

While Mr. Abramowitz and Mr. Barkey praised the government of Prime Minister Recep Tayyip Erdogan for taking steps to improve relations with Armenia, they also pointed out that this government "has failed to come to grips with the question of whether the Ottomans’ treatment of the Armenians a century ago constituted genocide."

Speaking in Washington in February 2007, Mr. Abramowitz had argued that Turkish officials’ denial of the Armenian Genocide and suggestions "that this is an open question that you got to leave it to the historians" were no longer "an effective argument."

"Despite Turkey’s Armenian initiative, tensions over the Armenian genocide issue could escalate next year," this month’s Foreign Affairs article predicted.

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Here is our newest illustration for your enjoyment!

Jim Sinclair’s Commentary

This is the reason why there are no dogs on Wall Street but plenty with CIGAs.

Jim Sinclair’s Commentary

Here is Martin Armstrong’s latest.

GOLD $5000+ 11/11/09

Jim Sinclair’s Commentary

Intervention is mainly in the minds of the media.

$1.50 is but a speed bump on its way considerably higher.

Dollar Overwhelms Central Banks From Brazil to Korea 
By Oliver Biggadike and Matthew Brown

Nov. 13 (Bloomberg) — Brazil, South Korea and Russia are losing the battle among developing nations to reduce gains in their currencies and keep exports competitive as the demand for their financial assets, driven by the slumping dollar, is proving more than central banks can handle.

South Korea Deputy Finance Minister Shin Je Yoon said yesterday the country will leave the level of its currency to market forces after adding about $63 billion to its foreign exchange reserves this year to slow the appreciation of the won. Chile Finance Minister Andres Velasco said the same day that lawmakers approved an increase in local debt sales to finance spending, a move that will allow the government to keep more of its dollar-based savings overseas and slow the peso’s rally.

Governments are amassing record foreign-exchange reserves as they direct central banks to buy dollars in an attempt to stem the greenback’s slide and keep their currencies from appreciating too fast and making their exports too expensive. Half of the 10-best performers in the currency market this year came from developing markets, gaining at least 14 percent on average, according to data compiled by Bloomberg.

‘Slow the Advance’

“It looked for a while like the Bank of Korea was trying to defend 1,200, but it looks like they’ve given up and are just trying to slow the advance,” said Collin Crownover, head of currency management in London at State Street Global Advisors, which has $1.7 trillion under management.

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Jim Sinclair’s Commentary

The USA is #1, debtor nation that is. A record 1st month Fiscal Year Federal Deficit?

That is not dollar bullish.

US starts fiscal 2010 with $176.36 bln Oct deficit
Thu Nov 12, 2009 3:47pm EST

(Adds economist reaction paragraphs 4-5, background 10-13)

WASHINGTON, Nov 12 (Reuters) – The U.S. government began fiscal 2010 with a record shortfall for the month of October, after posting a record $1.4 trillion budget gap for the 2009 budget year, the Treasury Department aid on Thursday.

The department, in its monthly budget statement, reported a $176.36 billion budget gap in October, the fifth largest deficit for any month. That exceeded both Wall Street analysts’ expectations for a $150 billion deficit, and the $155.5 billion gap in October 2008.

The report for October pointed to a growing gap between government spending and income at a time when a fragile economy is beginning to emerge from the steepest recession in 70 years.

"When the economy is in the deepest recession that we’ve had since the 1930s we need an increase in the federal deficit in order to jump start and help get the economy out of that recession," said Bill Hampel, chief economist for the Credit Union National Association in Washington.

"We’re in a very weak economy right now, but the deficit has made the economy stronger than it otherwise would have been, it is mitigating the recession," Hampel said.

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Jim Sinclair’s Commentary

Spin is saying this reflects a US recovery. The truth is more dollar supply and a lower dollar market.

September Trade Deficit Surges to $36.5 Billion
Author: 123jump.com Staff 
Last Update: 10:03 AM ET November 13 2009

Trade deficit in September increased to $36.5 billion from $30.8 billion in August on exports slightly edge up to$3.7 billion and imports edge lower to $128.3 billion. The goods deficit decreased to $47.6 billion and service surplus increased to $36.5 billion.

The following is the unedited transcript of the news release from U.S. Bureau of Economic Analysis, U.S. Department of Commerce Washington, DC

Goods and Services

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total September exports of $132.0 billion and imports of $168.4 billion resulted in a goods and services deficit of $36.5 billion, up from $30.8 billion in August, revised. September exports were $3.7 billion more than August exports of $128.3 billion. September imports were $9.3 billion more than August imports of $159.1 billion.

In September, the goods deficit increased $5.6 billion from August to $47.6 billion, and the services surplus was virtually unchanged at $11.1 billion. Exports of goods increased $3.5 billion to $90.3 billion, and imports of goods increased $9.1 billion to $138.0 billion. Exports of services increased $0.2 billion to $41.6 billion, and imports of services increased $0.2 billion to $30.5 billion.

In September, the goods and services deficit decreased $23.7 billion from September 2008. Exports were down $20.0 billion, or 13.2 percent, and imports were down $43.7 billion, or 20.6 percent.

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Jim Sinclair’s Commentary

Look like a late realization of the Formula.

BEYOND CALIFORNIA: STATES IN FISCAL PERIL

Some of the same pressures that have pushed California toward economic disaster are wreaking havoc in a number of other states, with potentially damaging consequences for the entire country.   Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island and Wisconsin join California as the 10 most troubled states, according to a new report.

In "Beyond California: States in Fiscal Peril," researchers with the Pew Center on the States identified factors that have contributed significantly to California’s difficulties, then determined the degree to which other states are experiencing the same challenges.  These factors are: loss of state revenues; the relative size of budget gaps; increasing joblessness; high foreclosure rates; legal obstacles to balanced budgets — specifically, a supermajority requirement for tax increases or budget bills and (6) poor money-management practices.

The report identifies threads that cut across the 10 states and could point to vulnerabilities in others as they try to navigate their way out of the fiscal crisis:

A number of states on the list, including Florida, Michigan, Nevada and Oregon, have struggled in part because their economies have depended so heavily on a particular industry.

The severity of the recession has resulted in states across the country facing substantial gaps between what they collect in revenue and what they spend.

In most of the 10 states, including Arizona, California, Florida, Nevada and Oregon, lawmakers’ latitude to respond to the fiscal crisis by raising taxes or cutting spending is limited by their states’ constitutions, ballot measures passed by voters, or other statutory or legal impediments to change.

Several states on the list were unable to muster the political resolve to enact long-term fixes to their fiscal problems.

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Jim Sinclair’s Commentary

Drain liquidity, if it was possible (which it is not) – NO.

Restraint on QE but credit TARP to the Federal Deficit – NO

Not use TARP funds in 2010 – NO

World Bank warns of more unemployment in 2010
Fri, 13 Nov 2009 10:31:19 GMT

The World Bank chief has predicted another tough year for the global economy, impending large-scale unemployment for wealthy nations.

Robert Zoellick on Friday outlined a list of potential drawbacks to a business forum held on the sidelines of an Asia-Pacific summit in Singapore.

Zoellick said that next year "is the year I am more concerned about."

He added that continuing high levels of unemployment, particularly in developed nations, would create second-wave effects for banks including defaults on consumer loans, credit cards and mortgages.

The US consumer, who has been the savior in previous downturns, can no longer be relied upon to drag the global economy out of the doldrums by returning to enthusiastic spending, he said.

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Jim Sinclair’s Commentary

Only if BA finds a solution to their unfunded obligations to retired and retiring employees that exceed BA’s capitalization.

British Airways, Iberia Agree to $7 Billion Merger (Update3)
By Steve Rothwell

Nov. 13 (Bloomberg) — British Airways Plc agreed to a $7 billion merger with Spanish carrier Iberia Lineas Aereas de Espana SA, ending more than a year of talks on a tie-up aimed at fighting a slump in travel and closing the gap with competitors.

Under the all-share deal, British Airways investors will own about 55 percent of the business, to be led by Willie Walsh, the U.K. carrier’s chief executive, the companies said. The merger won’t be completed until late 2010 and can be called off by Iberia if BA fails to resolve pension-deficit issues.

British Airways needs a bigger network to compete with larger rivals Air France-KLM Group and Deutsche Lufthansa AG. The combination will meld the U.K. company’s web of U.S. routes with Iberia’s Latin America services, extending its leading position in the lucrative trans-Atlantic market and consolidating its status as Europe’s third-largest airline.

“BA and Iberia will be stronger together than they are alone, particularly in terms of their networks,” said Gert Zonneveld, an analyst at Panmure Gordon in London with a “hold” rating on British Airways. “The pension deficit shouldn’t be an obstacle to this because it’s built into the share price.”

According to a memorandum of understanding signed by the companies, British Airways investors will get one share in the combined entity for every existing share they hold and Iberia investors will get 1.0205 shares for each Iberia share.

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Jim Sinclair’s Commentary

Here are three interesting stories for the Community.

Gold Price Soars But Output Tanks
Mariam Isa
13 November 2009

Johannesburg — Gold rallied briefly to a new record peak at 1122,85/oz yesterday, while platinum, palladium and rhodium all hit their highest levels in a year on a wave of speculative buying.

But SA’s gold production fell 9,3% in volume terms compared with September last year, official data showed yesterday.

In the first nine months of this year, total mining production fell 7,8%, compared with 6,4% in the corresponding period last year.

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Iran to supply 5m new coins to gold market

Iran’s central bank plans to inject 5 million newly-minted gold coins into the domestic market in order to control rising gold coin prices, according to the official IRNA news agency.

At Thursday’s price of 2.8 million rials (about $280) for a standard gold coin in Iran, the total value of the planned intervention would amount to $1.4 billion, Irna reported on Thursday.

The price of gold coins in Iran has risen sharply in line with developments on international markets where gold bullion has risen 28 per cent this year to a record high $1,122.85 an ounce.

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Paper promises, golden hordes
Nov 12th 2009
From The Economist print edition

TWO hundred metric tonnes of gold would occupy a cube of a little more than two metres on a side; it would fit into a small bedroom. But India’s purchase of that volume of gold from the IMF last month has had an outsize impact on the markets, helping push the price well above $1,100 a troy ounce.

For bullion bulls, the implication is clear: central banks no longer trust the creditworthiness of other governments. And if they have lost confidence, private investors should do the same. The next step in this chain of reasoning is to assume a stampede (or at least a quick trot) by other central banks into holding the yellow metal. Gluskin Sheff, a Canadian asset-management firm, suggests that if China followed India’s lead, bullion could hit $1,400 an ounce.

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Jim Sinclair’s Commentary

Good morning Pakistan.

Bomber attacks Pakistani intelligence agency; 10 dead
By Faris Ali

PESHAWAR, Pakistan (Reuters) – A suicide car bomber attacked an office of Pakistan’s main intelligence agency in the northwestern city of Peshawar on Friday, killing 10 people and wounding 60, officials said.

The city, near the Afghan border, has been targeted several times since the army began an offensive against the Taliban in South Waziristan last month and militants stepped up retaliatory attacks.

A military spokesman said the bomber’s target was the office of the Inter-Services Intelligence (ISI) agency and the bomber detonated his explosives at a checkpost outside.

The attack came shortly before U.S. National Security Adviser Jim Jones began meetings with military and government leaders in Islamabad.

The United States, weighing options as it struggles to stabilize Afghanistan, says Pakistani action against militants in border enclaves is vital for its Afghan effort.

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Jim Sinclair’s Commentary

Another welcome for a key US personality?

"The violence comes as Gen. James L. Jones, President Obama’s national security adviser, began a two-day visit to the Pakistani capital, Islamabad, for meetings with President Asif Ali Zardari and other senior Pakistani officials. On Friday morning, he met with the army chief, Gen. Ashfaq Parvez Kayani."

Militants Hit Pakistan Spy Agency
By SABRINA TAVERNISE and ISMAIL KHAN
Published: November 13, 2009

ISLAMABAD, Pakistan — Militants stepped up their fight against the Pakistani government on Friday, ramming a truck bomb into a regional office of the country’s main intelligence agency.

The early-morning blast destroyed a building at the intelligence compound in the northwestern city of Peshawar, killing at least 11 people and wounded more than 60, the authorities said, in what has become a grimly familiar cycle of violence. An attack on a police station in a different area left as many as six dead.

The violence comes as Gen. James L. Jones, President Obama’s national security adviser, began a two-day visit to the Pakistani capital, Islamabad, for meetings with President Asif Ali Zardari and other senior Pakistani officials. On Friday morning, he met with the army chief, Gen. Ashfaq Parvez Kayani.

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Jim Sinclair’s Commentary

Here is an interesting and timely connection.

Pakistan is the world’s most dangerous geopolitical space.

Follow the Money: Possible Link Between Fort Hood Suspect and Pakistan
Friday, November 13, 2009

This is a rush transcript from "On the Record," November 12, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Disturbing question tonight. Was the suspected Fort Hood killer sending money to Pakistan to fund terrorism? We report, you decide. But there is new information tonight about Major Hasan’s money and where some of it may have been going. Congressman Pete Hoekstra joins us live. He is ranking Republican on the House Intelligence Committee.

Good evening, Congressman. And where — what’s — what do you — what can you tell us about this money, whether or not Major Hasan was sending money to Pakistan, and to whom in Pakistan?

REP. PETE HOEKSTRA, R – MICH.: Well, Greta, much like the news media over the last five or six days, I’ve been going to my sources because over the weekend, the intelligence community was unwilling to brief us as to what they knew. And from very reliable sources — you know, they told me that there are very solid leads that indicate that Hasan was having communications with individuals in Pakistan and may also have sent money into Pakistan.

Now, as with any other leads, you know, this may end up being a dry hole, but the sources that I’ve heard this from are relative — in the past, they’ve been very reliable.

VAN SUSTEREN: All right, there are different places you can send money to in Pakistan. You could send it to your relatives. You could send it to your friends. You can send it…

HOEKSTRA: That’s right.

VAN SUSTEREN: … to a — or you can send it to, you know, really bad people, rotten people who want to inflict harm on others. Have you been able — is there any indication which way this goes?

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Jim Sinclair’s Commentary

At present, I agree.

Major rise in yuan very unlikely – newspaper
11.13.09, 05:25 AM EST

BEIJING, Nov 13 (Reuters) – A state-run Chinese newspaper on Friday played down speculation of an imminent significant rise in the yuan, or renminbi.

‘Considering the pressures on the export sector, the chances of a major appreciation in the renminbi are very small,’ said the International Finance News, a Chinese-language newspaper issued by the publishers of the official People’s Daily.

Speculation that China might let the yuan resume its climb after a 16-month pause was prompted on Wedesday by a change in the long-standing wording used by the People’s Bank of China to describe its currency policy.

In its third-quarter monetary policy report, the central bank failed to refer to keeping the yuan ‘basically stable at a reasonable and balanced level’ when discussing the outlook for the exchange rate.

It was the first such omission since China’s landmark revaluation of the yuan and the launch of currency reforms in July 2005.

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Jim Sinclair’s Commentary

As if we did not have enough problems on the shelf. Take a look at this one.

As Shipping Slows, Banks and Carriers Fear Loan Defaults
By LANDON THOMAS Jr.
Published: November 11, 2009

LONDON — When Eastwind Maritime, a medium-size carrier company, went bankrupt this summer, few banks in the United States took notice.

But in Europe, where banks hold over $350 billion of increasingly dubious shipping industry loans, the inability of Eastwind, which is based in New York,to handle its debt of more than $300 million set off an anxiety attack on lending desks across the Continent.

The collapse of Eastwind Maritime, analysts say, while small, could well be a harbinger of more carrier failures to come.

And for Europe’s struggling banks, already plagued by a toothless economic recovery and continuing losses in real estate, the emergence of yet another questionable category of loans adds to fears that many of them are lagging their counterparts in the United States in overcoming the financial crisis.

In Britain, for example, where the economy shrank a further 0.4 percent for the third quarter, the government had to put an additional £43 billion ($71 billion) into the Royal Bank of Scotland and Lloyds, both essentially under national control, because of continuing trouble with their real estate loans.

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Jim Sinclair’s Commentary

Come on, move on is the approach of the Fed and Treasury.

TARP Fraud Probes Have Tripled Since April, Says Watchdog
First Posted: 11-13-09 10:35 AM   |   Updated: 11-13-09 10:38 AM

The watchdog charged with policing the massive government bailout says that he’s conducting 65 investigations of possible fraud in the program, more than triple the number of probes he opened six months ago.

Neil Barofsky, speaking at the Bloomberg Washington Summit on Thursday, added that the probes range from complicated securities transactions to mortgage-fraud cases.

He explained that half of the investigations were prompted by tips from insiders, victims or members of the public who called his office’s fraud hotline.

"When I first took office, I can’t tell you how many times I’d be having a sit-down and warning about potential fraud in the program and I would hear a response basically saying, ‘Oh, they’re bankers, and they wouldn’t put their reputations at risk by committing fraud,’" he said.

"I think we’ve done a good job of instilling a greater degree of skepticism that what comes from Wall Street isn’t necessarily the Holy Grail," he said.

Barosky, a former federal prosecutor who pursued white-collar criminals, said last April that he had opened 20 criminal probes and six audits into whether bailout funds were being ripped off or wasted.

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Jim Sinclair’s Commentary

Of course it has to be bailed out.

Housing Agency’s Cash Reserves Down Sharply
By DAVID STREITFELD
Published: November 12, 2009

The Federal Housing Administration, the government agency whose loan-insurance programs have become a crucial source of support for the housing market, said on Thursday that its cash reserves had dwindled significantly in the last year as more borrowers defaulted on their mortgages.

The agency released an audit that spelled out the rapid deterioration of its finances. It is tightening loan standards in hopes it will not become another drain on the United States Treasury, but is reluctant to clamp down so much that it snuffs out the tentative recovery in housing.

How successfully the agency walks this tightrope could well determine whether the recovery gathers force, or whether home prices slide again — perhaps creating a fresh economic downturn.

As recently as a few weeks ago, the F.H.A. had said that even under the bleakest economic forecast, its cash cushion would quickly recover. On Thursday, it abandoned that position.

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Jim Sinclair’s Commentary

Turkey is playing games way above its head.

Turkey ‘Would Not Say No’ to Storing Iran’s Uranium
Friday, November 13, 2009

ANKARA, Turkey —  Turkey’s energy minister says if asked the country would not say no to temporarily storing Iran’s enriched uranium to help defuse a standoff over Western suspicions that Tehran is trying to build an atomic bomb.

Taner Yildiz said Friday there has been no such request yet but the issue is still being discussed. He says if asked "we would not say no." He says there is no problem in storing low-level enriched uranium here.

The idea that Turkey could play a role in the crisis was raised in an American television interview by the head of the U.N. nuclear agency, who noted that Turkey, a Muslim country and a NATO member, has good relations with both neighboring Iran and the U.S.

Iranian President Mahmoud Ahmadinejad discussed the issue in Turkey on Monday

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Jim Sinclair’s Commentary

There are good people everywhere.

14 Months Alone in Afghanistan? No Problem for this Pooch
By Kathy Ehrich Dowd | Friday, November 13, 2009 11:45 AM ET

Black labs are lovable, loyal and smart … and it turns out they are pretty adept at surviving in Afghanistan, too.

This week, a highly trained bomb-sniffing dog named Sabi was reunited with his Australian unit more than a year after he was separated from his handlers when insurgents stormed their barracks in the unstable Afghan province of Uruzgan, according to The Associated Press.

Nine soldiers were wounded in the Sept. 2008 battle, and afterwards, Sabi was nowhere to be found. Australian soldiers searched in vain for the dog for months, and had all but given up hope when a US soldier identified only as John recently discovered Sabi at an isolated patrol base elsewhere in Uruzgan. It’s unclear how Sabi spent the past 14 months, but officials believed someone cared for her because she appeared to be in good health and quickly responded to the US soldier’s commands.

Sabi returned to the Australians’ base in the province just before a visit from Australian Prime Minister Kevin Rudd on Wednesday, who seemed to bond with the sweet-looking canine. "Sabi is back home in one piece and is a genuinely nice pooch as well," Rudd told reporters.

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Jim Sinclair’s Commentary

Samuelson never imagined the US would ship its manufacturing overseas and become a nation of paper pushing sociopaths lead by Darth Vader and his evil empire.

The downside of a weak dollar
Commentary: Inadvertently driving a bigger trade deficit
Nov. 13, 2009, 2:03 p.m. EST By MarketWatch

SAN FRANCISCO (MarketWatch) — The latest international trade numbers border on blasphemy.

For the generations of college kids who learned the ABCs of global economics from Paul Samuelson, a weak dollar is supposed to tip the balance of trade in favor of the nation’s exporters. So why is the trade deficit exploding?

The dollar has lost 16% of its value against six other major currencies since March. In one quarterly report after another, companies doing business abroad showed they padded their profits every time they converted sales in local currencies back into U.S. dollars — effectively enjoying the equivalent of a price hike without actually hiking prices.

The weaker greenback also gives American companies a competitive edge over the foreign rivals when bidding on big projects.

So why in the world did the U.S. trade deficit widen in September? Not just a little, either.

The Commerce Department reported Friday the deficit surged 18% to $36.5 billion from $30.8 billion in August, its biggest one-month jump since 1999.

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Jim Sinclair’s Commentary

What a bag of worms this is.

If anything in this drama has the ability to disturb the social order here it is. How can an insurance agency have a deficit and anyone believe it can continue to guarantee anything?

Maybe the new head who ran a HEDGE FUND can sell derivatives to bail them out, or at least make it look like it is bailed out.

U.S. pension agency’s deficit widens to $22 billion
Bloomberg News
Nov. 13, 2009, 1:27PM

The Pension Benefit Guaranty Corp. said its deficit almost doubled to $22 billion in fiscal 2009 and its exposure to future losses from weak companies more than tripled.

The agency, which insures company pension plans, reported a $11.2 billion deficit for the end of fiscal 2008. The agency said it had a $33.5 billion deficit at mid-year 2009.

“Exposure to possible future terminations means that we could face much higher deficits in the future,” said Acting Director Vince Snowbarger. “We won’t fail to meet our obligations to retirees, but ultimately we need a long-term solution to stabilize the pension insurance program.”

The report shows that the agency’s potential exposure to future pension losses from financially weak companies increased to about $168 billion from $47 billion in fiscal year 2008.

Delphi Corp., the auto-parts maker, and Nortel Networks Corp.’s U.S. subsidiary are among the companies whose pensions PBGC took over this year.

The agency’s investment return rate was 13.2 percent.

The annual report to Congress classified 27 large pension plans with a total underfunding of $1.64 billion as probable losses on the PBGC balance sheet.

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Now here is a real rescue dog!She is a bit long on the tooth, but right on the mark. Maybe she wrote for us here at JSMineset today.

Jim Sinclair’s Commentary

The problems are far from solved. Dollar problems take their basis in the US financial system malaise, therefore dollar problems are going to get worse, not better.

Fannie, Freddie warn on losses
By NICK TIMIRAOS

Fannie Mae and Freddie Mac, already reeling in red ink, are warning they could face additional losses from the weakening condition of mortgage-insurance companies.

Fannie and Freddie together have required capital injections from the Treasury of $112 billion since the government took them over through conservatorship last year. Their need for government support would have been greater without collecting on claims from mortgage-insurance companies.

But Fannie and Freddie have warned that their claims against the insurers may not be paid in full Fannie set aside $1 billion in loss reserves to cover the possibility that mortgage-insurance companies won’t be able to pay full claims, the company said in a Securities and Exchange Commission filing.

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Jim Sinclair’s Commentary

So far not one of these has com e to court. I even believe that the civil side of this one was settled.

OTC derivatives come into the sharp focus of a HARD ASS Italian criminal prosecutor and the jig is up. A guy who prosecutes the mob will be right at home with this issue.

Intl Banks Could Face Milan Trial On Derivatives Sale-Sources
NOVEMBER 12, 2009, 11:17 A.M. ET
By Sabrina Cohen

MILAN (Dow Jones)–A Milan prosecutor wants the London unit of UBS (UBS), JP Morgan Chase & Co. (JPM), Deutsche Bank (DB) and Germany’s Depfa (DEP.XE) as well as other 13 people to face trial for fraud over the sale of derivatives from an around a EUR1.7 billion bond issue by the City of Milan, people with knowledge of the situation said Thursday.

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Jim Sinclair’s Commentary

Excellent time for a trade war.

U.S. Grows More Dependent on China
Global Crisis Makes U.S. More Dependent on China than Ever
By GABOR STEINGART and WIELAND WAGNER
Nov. 12, 2009

The scientists at the National University of Defense Technology in Changsha, China, had plenty to celebrate: They had developed a supercomputer that could perform more than a quadrillion calculations per second.

The announcement, released just in time for US President Barack Obama’s visit to China this weekend, had symbolic value: With their new computer, dubbed "Tianhe" ("Milky Way"), the Chinese claim they will be the first country to become a direct rival to the superpower.

China is bursting with self-confidence. The new world power sees itself as a winner in the financial crisis, with its economy growing by an impressive 9 percent in the third quarter, while the economies of the West struggle to recover from a deep recession. And while the Americans are focused on their own problems, China is expanding its influence, both in Asia and among resource-rich African countries.

China’s leaders are challenging the Americans more and more aggressively, not least to demonstrate to their own population of 1.3 billion how far the country has progressed under their leadership.

In an article in the party organ of the People’s Liberation Army, Air Force General Xu Qiliang announced China’s plans to expense its defense capabilities deep into space in the future. By the mid-21st century, the general predicted, the People’s Republic will have become a world power, and its air force will be required to defend the country against many kinds of threats.

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Jim Sinclair’s Commentary

Here is what verbal intervention looks like. What it is is a terrible waste of media space.

World Tries to Buck Up Dollar
Thailand, Korea, Russia Seen Buying U.S. Currency; Pressure on China to Boost Yuan
BY JOANNA SLATER, WILLIAM MALLARD AND BOB DAVIS

Governments around the world stepped up efforts to stem the U.S. dollar’s slide, as officials grow increasingly concerned about the impact of the weak greenback on their nascent economic recoveries.

Thailand, South Korea, Russia and the Philippines have been snapping up dollars this week in order to hold down the value of their currencies, traders said Wednesday, as the U.S. currency wallowed near 15-month lows.

In Latin America, Brazil’s finance minister said the country’s currency remained too strong, sparking speculation that the government would intensify recent efforts to curb the real’s ascent. On Tuesday, Taiwan banned foreign investors from parking …

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Jim Sinclair’s Commentary

The Weimar syndrome.

Warhol Sells for $43.7 Million at Sotheby’s
By KELLY CROW

In a gear-changing sign that the art market is shaking off the recession, Sotheby’s auctioned off $134.4 million worth of post-war and contemporary art earlier tonight at its Manhattan salesroom, including a smoky sheet of dollar bills by Andy Warhol that sold for $43.7 million. The sale total surpassed the auction house’s own goal of $67.9 million to $97.7 million – and outperformed its $125 million sale of contemporary art last November.

After a year of cautious bidding, the mood in the salesroom Wednesday night grew increasingly upbeat, with fashion designer Valentino Garavani and jeweler Laurence Graff among the winning bidders. The night unquestionably belonged to Warhol. The Pop artist is a household name, but his early 1960s silkscreens rarely surface at auction. That’s why at least five bidders, including dealer Jose Mugrabi, chased after the artist’s "200 One Dollar Bills," a seminal 1962 piece that Sotheby’s last sold more than two decades ago for $300,000. A telephone bidder got it tonight for $43.7 million – over three times its $12 million high estimate – or $218,812.50 for each silkscreened dollar bill in the painting.

Mr. Graff, based in London, paid $6.1 million for Warhol’s "Self-Portrait," six times its low estimate. The 1965 painting in red and purple hues had been consigned by a Connecticut woman named Cathy Naso, who once worked as a typist in Warhol’s Factory and had kept the painting out of sight for decades. After the sale, auctioneer Tobias Meyer said the piece’s storied history was part of its appeal: "It’s worth keeping Warhol in your closet for 43 years."

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Jim Sinclair’s Commentary

The following sums up this article and the future of the US dollar.

"But there is a definite possibility that the dollar could soon decline further or faster."

The Great Shrinking American Dollar
By PETER BOONE AND SIMON JOHNSON

Peter Boone is chairman of the charity Effective Intervention, a research associate at the London School of Economics’ Center for Economic Performance, and a principal in Salute Capital Management Ltd. Simon Johnson, a senior fellow at the Peterson Institute for International Economic, is the former chief economist at the International Monetary Fund.

The American dollar is in the midst of a large fall in its value, or depreciation, as measured against other major currencies. The decline has been steady since 2002 and our currency is down about 35 percent from that peak. After strengthening slightly more than 10 percent during the global financial crisis of the past 18 months, the dollar is again falling back toward its pre-crisis lows, representing its weakest international value since 1967.

But there is a definite possibility that the dollar could soon decline further or faster.

At the level of general economic strategy, the American government has responded to a financial sector crisis with an expansionary fiscal policy, and the Federal Reserve is implementing loose monetary policy. Andrew Haldane, responsible for financial stability at the Bank of England, puts it this way:

For the authorities, [excessive risk-taking by the financial sector] poses a dilemma. Ex-ante, they may well say “never again.” But the ex-post costs of crisis mean such a statement lacks credibility. Knowing this, the rational response by market participants is to double their bets. This adds to the cost of future crises. And the larger these costs, the lower the credibility of “never again” announcements. This is a doom loop.

In addition to a financial crisis, we also have a large current-account deficit, meaning that we buy more from the world than we sell. The deficit was $100 billion in the latest available (second quarter) data, which is around 3 percentof gross domestic product, and we finance that with capital inflows from abroad. (The current-account deficit is down from around 6 percent, but two-thirds of the decline is due to the lower price of oil).

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The US Dollar/Euro $1.50 "Maginot Line"

We have spoken about how contra-productive government intervention is in the market and by public statement.

Sure you get short term influence. But what you do is set up dollar defense bunkers with their foundation in wet sand.

To save you from a tome, the concept is that no government by market intervention and public statement alone (devoid of major economic policy change) can turn the trend in its currency as that is an attempt to re-create the Bretton Woods Agreement single handedly.

Remember the huge expression of glee in the markets when unemployment went from 9.5% to 9.4%, heralded as a major economic turnaround?

12,000 less people showing up for unemployment insurance money is not a trend changer, nor an economic event of merit. This event resulted in a major public address by the President of the USA this morning.

Initial Jobless Claims in U.S. Fall to 10-Month Low 
By Courtney Schlisserman

Nov. 12 (Bloomberg) — Fewer Americans than anticipated filed claims for jobless benefits last week, signaling the worst employment slump in the post-World War II era is easing as the economy expands.

Initial unemployment claims fell by 12,000 to 502,000 in the week ended Nov. 7, the lowest level since January, Labor Department figures showed today in Washington. The number of people receiving jobless benefits dropped, as did those getting extended payments.

Firings may slow as the loss of 7.3 million jobs since the recession began in December 2007 probably means many companies have already cut staff to bare minimums. That may not stop the jobless rate from climbing further after reaching a 26-year high in October as the shortest workweek on record gives employers room to increase hours before taking on staff.

The drop in claims is “reassuring, but these levels are still consistent with job losses,” said Jonathan Basile, an economist at Credit Suisse in New York. “We’re not getting a strong enough vote of confidence yet from claims to say companies have stepped up their hiring and greatly reduced their pace of layoffs.”

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Jim Sinclair’s Commentary

With the combination of super MOPE, 12,000 less people on line and the $1.50 Maginot Line, we have repeated the history of the French defense against the Germans built in 1935. It has short term success but was ill constructed, resulting in military disaster when it did not hold in the form of today’s dollar market.

Similarly, hot air will not make a bull market out of the dollar’s Sow’s ear.

Gold is going to $1224, $1278, $1650 and then to Alf’s numbers.

The US dollar is cooked. Monetary authority knows what YOU know and will pull out the stops here to try to hold it.

Maginot Line
From Wikipedia, the free encyclopedia

The Maginot Line (IPA: [maʒi'noː], French: Ligne Maginot), named after French Minister of Defense André Maginot, was a line of concrete fortifications, tank obstacles, artillery casemates, machine gun posts, and other defenses, which France constructed along its borders with Germany and Italy, in the light of experience from World War I, and in the run-up to World War II. Generally the term describes only the defenses facing Germany, while the term Alpine Line is used for the Franco-Italian defenses.

The French established the fortification to provide time for their army to mobilize in the event of attack and/or to entice Germany to attack neutral Belgium to avoid a direct assault on the line. The success of static, defensive combat in World War I was a key influence on French thinking. The fortification system successfully dissuaded a direct attack. However, it was an ineffective strategic gambit, as the Germans did indeed invade Belgium, flanked the Maginot Line, and proceeded relatively unobstructed.[1] It is a myth however that the Maginot line ended at the Belgian border and was easy to circumvent.[2] The fortifications were connected to the Belgian fortification system, of which the strongest point was Fort Eben-Emael. The Germans broke through exactly at this fortified point with a unique assault that incorporated gliders and shaped explosive charges. The surrender of the fort, in less than two days, allowed the invasion of France.

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Jim Sinclair’s Commentary

OK, what is #5? Bring back the Russians, the British, the Mongols and Alexander the Great for a redo.

Obama Rejects all Four Afghanistan Plans
By Rob Kall

Multiple sources indicate Obama will reject all four plans he’s had submitted to him.

Seymour Hersch suggests this may be Obama standing up on his own.

As many have said, no General wants less troops. It’s the psychology of military leadership.

This announcement comes on the heels of new information that contractors in Afghanistan have been giving the Taliban money to keep supply routes open.

There’s only one word for Afghanistan– a military term– clusterf*ck.

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Jim Sinclair’s Commentary

Let me tell you a small story. My brother had 9 children. It was a his and hers family. The all were quite young when the Salk Polio shot was first available. My brother took all his kids to the doctor for their shot. They were crying and balking heavily.

He said to them, "If I take the shot in front of you will you be brave like daddy?"

All answered yes.

Al rolled up his sleeve, took the shot and promptly passed out in front of everybody.

The kids turned and ran out of the doctor’s office with their mother, the nurse and a few of the people in the waiting room helping round up 9 running, screaming kids.

Deputies Hold Boy Who Fled Flu Shot
Student refused; was held down for vaccination
By SHELLEY HANSON Staff Writer

WHEELING – It took the strength of two sheriff’s deputies to keep a middle schooler still enough to receive a shot of the swine flu, or H1N1, vaccine at a recent clinic.

During a regular Wheeling-Ohio County Health Board meeting Tuesday, health department Administrator Howard Gamble told board members about the student’s attempt to flee Wheeling Middle School during a vaccination clinic held there last Friday.

He noted the boy’s mother could not bear to watch the scene and left the gymnasium. Out of apparent fear of receiving the injection, the student ran out of the building. The school’s resource officer, Ohio County Sheriff’s Deputy John Haglock, coaxed the boy back inside. Once at the shot station, however, Haglock apparently needed some help keeping the boy still, and another deputy assisted.

"He tried to run. I looked over and saw two sheriff’s deputies holding a kid down," Gamble said. "Mom took off, she couldn’t take it. You had one nurse with the needle, two deputies holding him, one nurse is grabbing hands – because that’s what they want to do, to go after the needle. And that’s the last thing you want."

Gamble said as soon as the nurse gave the boy his injection and told him he was done, he hopped up like nothing had happened.

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Jim Sinclair’s Commentary

This story is not completely true, but it is close enough for examination.

1. You cannot manipulate anything except in the direction it wishes to go in the first place. Call that a Seligman/Livermore rule.
2. Recall that many of the firms mentioned here are related to the Seligmans and therefore to Bert.
3. Yes you can play the price and the volume in the manipulative manner discussed.
4. In the final analysis the price of energy will be a product of the US dollar.
5. The price of US equities in the final phase will also be a product of the US dollar.
6. The bullies cannot continue what they are doing because it is being done in a zero sum game.
7. When 10 fat sharks get in a feeding frenzy the end result is one fat shark. Then what does that shark have left to eat?
8. So will go the dark pools until they implode for reason number 7.
9. This is why if you try to trade for a living from your homes you are bonkers if you think you can do better than break even.

The Global Oil Scam: 50 Times Bigger than Madoff
$2.5 Trillion – That’s the size of the global oil scam.

It’s a number so large that, to put it in perspective, we will now begin measuring the damage done to the global economy in "Madoff Units" ($50Bn rip-offs). That’s right – $2.5Tn is 50 TIMES the amount of money that Bernie Madoff scammed from investors in his lifetime, yet it is also LESS than the MONTHLY EXCESS price the global population is being manipulated into paying for a barrel of oil.

Where is the outrage? Where are the investigations?

Goldman Sachs (GS), Morgan Stanley (MS), BP (BP), Total (TOT), Shell (RDS.A), Deutsche Bank (DB) and Societe Generale (SCGLY.PK) founded the Intercontinental Exchange (ICE) in 2000. ICE is an online commodities and futures marketplace. It is outside the US and operates free from the constraints of US laws. The exchange was set up to facilitate "dark pool" trading in the commodities markets. Billions of dollars are being placed on oil futures contracts at the ICE and the beauty of this scam is that they NEVER take delivery, per se. They just ratchet up the price with leveraged speculation using your TARP money. This year alone they ratcheted up the global cost of oil from $40 to $80 per barrel.

A Congressional investigation into energy trading in 2003 discovered that ICE was being used to facilitate "round-trip" trades. " Round-trip” trades occur when one firm sells energy to another and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever changes hands. But when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company. This is nothing more than a massive fraud, pure and simple.

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Jim Sinclair’s Commentary

I believe it says Squeeze the People.

U.S. Foreclosure Filings Surpass 300,000 for 8th Straight Month
By Dan Levy

Nov. 12 (Bloomberg) — U.S. foreclosure filings surpassed 300,000 for an eighth straight month as unemployment made it tougher for homeowners to pay their bills, RealtyTrac Inc. said.

A total of 332,292 properties received a default or auction notice or were seized by banks in October, up 19 percent from a year earlier, Irvine, California-based RealtyTrac said today. One in every 385 households received a filing. The tally fell 3 percent from September, the third consecutive monthly decline.

“The foreclosure problem is still with us and will keep prices down,” Stephen Miller, chairman of the economics department at the University of Nevada at Las Vegas, said in an interview. “The real issue is we don’t know what inventory banks are holding that they have yet to put on the market.”

Distressed real estate transactions accounted for 30 percent of all home sales in the third quarter as the median price fell 11 percent from a year earlier to $177,900, according to the National Association of Realtors. U.S. unemployment surged to a 26-year high of 10.2 percent in October as payrolls fell by 190,000 workers, the Labor Department said last week.

Housing will reach a bottom by March 2010, with lower- priced properties recovering value more quickly than expensive homes, First American CoreLogic said last month.

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Jim Sinclair’s Commentary

How many times can you go to the well?

$45 billion is not going to take the FDIC all the way.

FDIC Orders Banks to Prepay $45 Billion to Rebuild Deposit Fund
By Alison Vekshin

Nov. 12 (Bloomberg) — U.S. lenders will prepay three years of premiums to replenish the government’s deposit insurance fund drained by the fastest pace of bank failures in 17 years, the Federal Deposit Insurance Corp. decided today.

The FDIC board at a Washington meeting unanimously approved the payments to pump $45 billion into the fund that slipped into a deficit at the end of the third quarter. The U.S. has closed 120 banks this year.

The action satisfies the deposit fund’s “need for liquidity without imposing undue burden on the industry,” FDIC Chairman Sheila Bair said at the meeting. Industry groups have backed the premium prepayments.

A surge in failures has pushed the industry-supported fund into a deficit for the first time since 1991, according to agency estimates. The FDIC had set aside $32 billion for 2009 failures expected through June 30, and estimates bank failures through 2013 will cost $100 billion.

The FDIC is required to rebuild the fund, used to pay depositors as much as $250,000 per account in a failure, when the balance divided by insured deposits falls below 1.15 percent. The ratio as of June 30 was 0.22 percent.

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Jim Sinclair’s Commentary

Oops, wrong consulate!

Iran Mission Official Shot Dead in Pakistan
November 12, 2009

Unknown gunmen have shot dead a local official at Iran’s consulate in Pakistan’s northwestern city of Peshawar. Abul Hassan Jafari, director of public relations at the consulate, was attacked by assailants on Thursday as he was on his way to work, police said. He died of severe injuries on the way to hospital.

The gunmen escaped after the shooting. No group has yet claimed responsibility for the attack. Iranian Ambassador to Islamabad Mashallah Shakeri has confirmed the incident. This is not the first time that an official at Iran’s consulate in Peshawar comes under attack.

Last year, Iran’s commercial attaché, Heshmatollah Attarzadeh-Niyaki, was kidnapped on his way to the consulate. Iran has urged Pakistan to tighten security measures in the violence-stricken region in which hundreds have been killed as a result of terrorist attacks and bombings.

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Jim Sinclair’s Commentary

Fundamentally, the dollar is a disaster that has happened.

Plea to reduce demand for dollar reserves
By Krishna Guha in Washington
Published: November 11 2009 20:55 | Last updated: November 11 2009 20:55

The world should try to mitigate flaws in the dollar based global monetary system by reducing demand for dollar reserves and exploring alternative reserve assets, a group of economists from the International Monetary Fund said on Wednesday.

The economists said the crisis had “brought to the fore” long-standing concerns about a system based on a single core currency issued by one country.

They said the dollar-based system “suffered inherent weaknesses”.

The US, at the centre of the system, was under pressure to run large current account deficits in order to supply the world with the dollar assets it wants, they said, while there was no effective discipline on either the US or countries such as China that have big external surpluses to adjust their policies.

The report was published by the authors in their individual capacity and not endorsed by the IMF as an institution. But it comes amid renewed global focus on and dissatisfaction with the role of the dollar in the world economic system, following the experience of a crisis at the core rather than the periphery of the world system.

The IMF economists said the crisis highlighted the “scale and volatility of global capital flows” that led countries to accumulate reserves to protect themselves against a sudden reversal in capital.

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Jim Sinclair’s Commentary

The FDIC is broke and needs a bailout strategy.

Add the Federal Housing Administration to the busted zombie status list.

Cash cushion shrivels – U.S. housing agency
Federal Housing Administration’s reserve fund drops below 2% ratio required by Congress. Calls increase for revamping lending guidelines.
By Tami Luhby, CNNMoney.com senior writer
Last Updated: November 12, 2009: 2:26 PM ET

NEW YORK (CNNMoney.com) — The mortgage meltdown has ravaged the finances of a crucial government agency tasked with propping up the housing industry.

The Federal Housing Administration’s reserve fund has dropped to .53% of its insurance guarantees, well below the 2% ratio mandated by Congress and the 3% ratio it had last fall, according to its annual independent audit, released Thursday. The fund covers losses on the mortgages the agency insures.

Housing officials said the agency will not have to turn to Congress for a bailout, but the agency’s weakening financial condition has prompted renewed calls to change its lending guidelines.

The FHA has skyrocketed in popularity during the mortgage crisis since it backstops banks if borrowers stop paying. Housing experts are growing increasingly concerned about the agency’s ability to handle rising numbers of defaults.

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Jim Sinclair’s Commentary

It isn’t the best time to pay admission to the Pakistani nukes to be protected by the US against the Pakistani Taliban.

Pakistanis Blame U.S. for Taliban Terror Bombings
PESHAWAR, Pakistan Nov. 12, 2009

There are no girls choosing colorful bangles, no women buying dresses anymore in the narrow, dusty, aisles of Mina bazaar, one of the few markets in this frontier town that used to cater to families.

Instead, most of the small, fragile shops are now piles of bricks, destroyed two weeks ago by a massive car bomb that gutted this crowded corner of the city. The explosion was one of the most violent acts of terrorism in Pakistan’s history. The official death count was more than 110, but residents here say at least 60 more bodies were never found, obliterated in the blast.

But the depravity of a bomb clearly designed to kill as many people as possible did not stoke the city’s anger at the Taliban, who have recently launched a wave of violence in and around the largest city in the country’s volatile northwest.

The bomb seems to have done the opposite. Most people in this city blame the United States instead of radical Islamist militants for the increased violence. Some blame the U.S. for launching the attacks, or accuse the U.S. of pushing the Pakistani army into an operation

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Good night to my extended family.

Her name is Pink. She is a pig, but don’t tell anyone.

She thinks she is a Hot Dog. The other Hot Dogs agree, especially her Hot Dog mother.

Jim Sinclair’s Commentary

Now they have lost their minds. They are going to bail themselves out with TARP funds.

Who ever came up with that one should be sent to the front lines in Afghanistan, if anyone could find the front lines.

White House Aims to Cut Deficit With TARP Cash

NOVEMBER 12, 2009
By DEBORAH SOLOMON and JONATHAN WEISMAN

WASHINGTON — The Obama administration, under pressure to show it is serious about tackling the budget deficit, is seizing on an unusual target to showcase fiscal responsibility: the $700 billion financial rescue.

The administration wants to keep some of the unspent funds available for emergencies, but is considering setting aside a chunk for debt reduction, according to people familiar with the matter. It is also expected to lower the projected long-term cost of the program — the amount it expects to lose — to as little as $200 billion from $341 billion estimated in August.

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Jim Sinclair’s Commentary

How will Karzai do that? He would have to fire himself and his #1 son.

U.S. Seeking a Lever in Kabul
By HELENE COOPER
Published: November 11, 2009

WASHINGTON — When President Obama delivered a rare and public calllast week for President Hamid Karzai to crack down on corruption in Afghanistan, there was one glaring omission from his remarks — an “or else.”

Mr. Obama’s exclusion of the obvious threat — that he will pull American troops out of Afghanistan if Mr. Karzai does not comply — reflects a stark conundrum: How much leverage does the United States really have over the Afghan leader?

“You know that scene in the movie ‘Blazing Saddles,’ when Cleavon Little holds the gun to his own head and threatens to shoot himself?” asked Ronald E. Neumann, a former ambassador to Afghanistan.

“The argument that we could pull out of Afghanistan if Karzai doesn’t do what we say is stupid. We couldn’t get the Pakistanis to fight if we leave Afghanistan; we couldn’t accomplish what we’ve set out to do. And Karzai knows that.”

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Jim Sinclair’s Commentary

You have to love how legislation today is named exactly what it is NOT.

"The derivatives Markets Transparency Accountability Act of 2009"

Jim Sinclair’s Commentary

Do not phone, write, fax, or email anything you would not want to see in a headline in the New York Times. Be advised.

Every phone call, email and internet click stored by ’state spying’ databases
Every phone call, text message, email and website visit will be stored for a year for monitoring by the state.
By Richard Edwards, Crime Correspondent
Published: 9:00PM GMT 09 Nov 2009

All telecoms companies and internet service providers will be required by law to keep a record of every customer’s personal communications, showing who they are contacting, when, where and which websites they are visiting.

Despite widespread opposition over Britain’s growing surveillance society, 653 public bodies will be given access to the confidential information, including police, local councils, the Financial Services Authority, the Ambulance Service, fire authorities and even prison governors.

They will not require the permission of a judge or a magistrate to access the information, but simply the authorisation of a senior police officer or the equivalent of a deputy head of department at a local authority.

Ministers had originally wanted to store the information on a massive Government-run database, but chose not to because of privacy concerns.

However the Government announced yesterday it was pressing ahead with privately-held "Big Brother" databases which opposition leaders said amount to "state-spying" and a form of "covert surveillance" on the public.

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Jim Sinclair’s Commentary

Relax. Gold is going to $1224, $1278, $1650 and then on to Alf’s numbers.

Jim Sinclair’s Commentary

Position limits in a global market borders on a joke.

All it will do is drive specs to others international exchange markets and forms.

Money is so big now that oil specs can lease and fill tankers if they wish.

This has PR value, but no real lasting impact on prices other than hurting local exchange volume and increasing international exchange volume. It could actually backfire by sending big money to little exchanges.

Leave it to governments to screw it up.

Exclusive: Chilton sees decision in December on position limits
Tue Nov 10, 2009 5:19pm EST

WASHINGTON (Reuters) – The Commodity Futures Trading Commission is moving toward adopting a proposal in early December to rein in excessive speculation in energy markets by setting hard limits on positions investor entities can hold in a contract.

Bart Chilton, one of five CFTC commissioners, said until a draft is completed it will be difficult to determine where the commission stands as an entity, but there is a broad understanding "that there are issues that need to be addressed and that doing nothing is not an option."

"I think there will be" position limits, Chilton told Reuters in an interview.

"I don’t want to prejudge where we’ll be specifically but if I had to guess where we’ll come out ultimately I believe that there will be hard position limits … for energy commodities and for other physical commodities" such as metals, he said.

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Jim Sinclair’s Commentary

You think the Fed is getting the message of more QE and will stop all the silly talk they were doing about draining?

You can bet the last Fed statement was in light of this bill. Such bills are no surprise to anyone in DC circles as the content is well known before it is publicly discussed.

Goodbye dollar. Alf and Armstrong are right.

Fed Faces Biggest Blow to Authority in Dodd Proposal (Update1)
By Scott Lanman and Craig Torres

Nov. 11 (Bloomberg) — The Federal Reserve faces the biggest blows to its authority and independence in five decades under legislation championed by its lead overseer in the U.S. Senate.

The financial-regulation overhaul proposed yesterday by Senator Christopher Dodd would strip the Fed of its role as a bank supervisor and give Congress a greater voice in naming the officials who set interest rates. The measure opens the door to interference from politicians who might disagree with any move by the Fed to raise rates from record lows, former central bank officials said.

“If you were worried that the Fed will be pressured to remove its accommodation while the unemployment rate is still very high, you’ve got to look for leverage,” Vincent Reinhart, a former director of the Fed’s Monetary Affairs Division, said in an interview. Dodd is aiming for “some political reach into all the voters” on the Fed’s Open Market Committee, which decides the benchmark U.S. interest rate, added Reinhart, now a resident scholar at the American Enterprise Institute.

U.S. stocks, bonds and the dollar would collapse if investors perceive Congress violating the independence of the policy-setting panel, former Fed Governor Laurence Meyer, now vice chairman of Macroeconomic Advisers LLC, said last month.

Dodd’s measure would also curb the Fed’s ability to make emergency loans to individual companies. The Fed’s response to the financial crisis prompted increased scrutiny of the central bank, especially after it used its emergency powers to bail out Bear Stearns Cos. and American International Group Inc.

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Jim Sinclair’s Commentary

This is not for Devali. Go India gold investors!

India’s gold import rises 45 pc to 48 tonnes in October
11 Nov 2009, 2132 hrs IST, PTI

NEW DELHI: India’s gold imports surged by over 45 per cent in October at 48 tonnes on the back of rising demand, the country’s largest state-run gold importing firm MMTC said today.

India, the world’s largest gold consumer, had imported 33 tonnes in the corresponding period last year, it said.

"Gold imports rose due to a sharp rise in jewellery demand and pick up in investment," MMTC Chairman and Managing Director Sanjiv Batra told reporters here.

Consequently, MMTC purchased 15.13 tonnes from the global market last month as against 10.42 tonnes in the same period in 2008-09, he said.

However, gold imports till October this fiscal remained lower at 510 tonnes, compared with 635 tonnes in the year-ago period, he noted.

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Jim Sinclair’s Commentary

All this could have been avoided, but then who am I to tell Barrick’s then president anything about the price of gold?

Oh yes, it has deeply hurt them if you have a brain to understand.

Want to buy the world’s cheapest and in my opinion best new nickel project cheap? Call them. Tell them Jim sent you.

Barrick shuts hedge book as world gold supply runs out
Global gold production is in terminal decline despite record prices and Herculean efforts by mining companies to discover fresh sources of ore in remote spots, according to the world’s top producer Barrick Gold.
By Ambrose Evans-Pritchard, International Business Editor
Published: 7:20PM GMT 11 Nov 2009

Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.

"There is a strong case to be made that we are already at ‘peak gold’," he told The Daily Telegraph at the RBC’s annual gold conference in London.

"Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.

Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa’s output has halved since peaking in 1970.

The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday. The key driver over recent days has been the move by India’s central bank to soak up half of the gold being sold by the International Monetary Fund. It is the latest sign that the rising powers of Asia and the commodity bloc are growing wary of Western paper money and debt.

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Jim Sinclair’s Commentary

Truth has a clear ring to it. Please read the excerpt from the official report on commercial real estate in California.

So many of these losses sit on the books of banks and have not been written down.

After FASB sells out you only write up, never down!

California Controller: Overview of the Commercial Property Markets
TUESDAY, NOVEMBER 10, 2009

Buried in the California Controller’s November analysis is a guest article: Overview of the Commercial Property and Capital Markets with Implications for the State of California by Dr. Randall Zisler. (ht picosec)

Here are some excerpts:

Whereas excessive and imprudent leverage fed the bubble, deleveraging not only popped the bubble, but, in the process, destroyed record amounts of equity and debt. Most deals financed with high leverage from 2005 to the present are under water. The equity is gone and the debt, if it trades at all, trades at a deep discount to face value. Most leveraged equity invested in real estate has evaporated since property prices, if marked to market, have fallen 30% to 50%.

The chart [right] shows overall U.S. property total returns, quarterly (at annual rates) and lagging four quarters. This appraisal-based, lagging index shows sharp negative returns exceeding the deterioration of the RTC (Resolution Trust Corp.)
period of the early 1990s. (See Chart 1.) Second quarter 2009 returns indicate the possibility that total returns, while still negative, may have hit a point of inflection. We expect that property values in many sectors, especially office, retail, and industrial, will likely deteriorate further in 2010 with improvement beginning sometime in 2011.

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Jim Sinclair’s Commentary

I will never understand why people think that governments, not markets, make currency value in terms of a trend.

Markets rule!

Obama Dollar to ‘Devalue the Way to Prosperity’!
Posted by Dean Popplewell at 5:48 am EST, 11/11/2009

Contrarian long USD positions remain costly. Forget the Japanese housewife, it’s the Brown’s, Smiths, Jones etc who have been piling into a global carry trade, similar to Japans’ lost years, using the USD as a vehicle currency. It will end in tears. Is the Obama’s administration policy one of quiet, steady dollar devaluation? A weaker domestic currency gives way to cheaper exports and the potential for increased employment opportunities. With a 26-year high unemployment rate sitting at 10.2%, itching to go higher (real rate supposedly near 17%), is begging Obama to ‘devalue the way to prosperity’!

The US$ is weaker in the O/N trading session. Currently it is lower against 14 of the 16 most actively traded currencies in a ‘subdued’ trading range.

Fed voting member Janet Yellen and her dovish comments gave little support to her domestic currency yesterday. She stated the obvious when committing the Fed to a tighter monetary mandate ‘at some point’ in the future. She highlighted that US unemployment could stay elevated ‘for years to come’, and that the countries recovery will ‘be gradual and vulnerable’ to shocks. The Fed expects the commercial real estate sector to weigh down this recovery as their prospects are rather ‘worrisome’ to the committee. Despite the equity rally going some ways to rebuild household wealth, ‘strength, durability of expansion are in question’, as prospects for ‘consumer spending remain cloudy’. Not a strong endorsement to wear a train driver’s hat Buffett style.

The USD$ is currently lower against the EUR +0.35%, GBP +0.18%, CHF +0.35% and JPY +0.00%. The commodity currencies are stronger this morning, CAD +0.35% and AUD +0.22%. At 96c or 1.0417 expect the BOC to be drawing ‘their’ line in the sand. Governor Carney has insisted that they will use a combination of currency intervention, credit and quantitative easing options to influence the loonies’ value. The BOC believes that a strong currency is detrimental to economic growth. In the O/N session, the loonie has appreciated to its strongest level in 2-weeks vs. its southern trading partner on the back of the G20 maintaining their economic stimulus measures. Keeping the status quo is boosting speculators risk appetite for the higher yielding asset classes and commodity based currencies. Last week the Canadian economy managed to pare -43k jobs in Oct. (the market was expecting a gain of +10k) and push the unemployment rate up 2-ticks to an unexpected +8.6%. The data provides much stronger evidence that Canada has some ways to go to exit this recession, but, the data will make it easier for Governor Carney to follow through on his pledge to keep borrowing costs at record lows until June of next year to promote growth unless of course the inflation outlook changes materially. For now the loonie remains in a tight 3cent trading range with dealers continuing to play the support and resistance levels until fundamentally or technically told otherwise or commodity prices start to fall off a cliff!

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Jim Sinclair’s Commentary

Lets crank out those loans so we can rescue the Too Big To Fail one more time.

I could use a billion. I think I will apply.

FDIC boss: Big banks still aren’t lending enough
Large banks aren’t ‘stepping up to the plate providing credit,’ Bair says
updated 5:09 p.m. MT, Tues., Nov . 10, 2009

NEW YORK – The head of the Federal Deposit Insurance Corp. said Tuesday she’s "very worried" that the nation’s biggest banks aren’t lending enough and warned the economy could take another turn for the worse without increased access to credit.

FDIC Chairman Sheila Bair said the FDIC’s upcoming quarterly report would show that "not many large institutions are doing a very good job of lending." Instead, she said, some are taking advantage of near-zero interest rates by borrowing dollars cheaply to buy higher-yielding assets like stocks or commodities — a move known as the "carry trade."

"I don’t see much money going out (from banks). I see a lot of carry trade," Bair told a banking conference in New York. "It used to be you take deposits and you lend out money. We’d like to see more of that."

Many banks have tightened lending standards following a wave of residential and commercial property defaults. Others say they want to lend but see little demand as consumers and businesses seek to pay off debt, not take on more.

The lack of lending by large banks is dangerous at a time when many small and midsize banks are teetering on the brink amid the economic downturn, Bair said.

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Jim Sinclair’s Commentary

I thought you might like to read the New York Stock Exchange Midday Report to listed companies.

Please pay attention to the last point below.

Apparently management has not yet realized that equity strength is a direct result of the dollar’s poor action as well as a few trillion in liquidity injections.

NYSE MAC DESK MID-DAY MARKET UPDATE:

DOW 10,275 (+27 points), S&P500 1096 (+3 points), Crude $78.85/barrel (-$0.20)

MARKET DRIVERS: {3 Drivers today: 1) “Fed-speak”. 2) New lows for the dollar 3) Strong Chinese economic numbers…}

Several Fed officials yesterday, (including Dallas Fed President Fisher last night), talked about either the lack of inflation or implied that monetary policy will remain easy for some time.   Predictably, the Dollar Index is hitting new lows, commodities and commodity stocks are again up.

These days, we watch Chinese Industrial Production as closely as U.S. Industrial Production…the Chinese October IP was up 16.1% (a 19-month high). Japanese Machine Orders were also up over 10 percent..

UPS CEO, Scott Davis, told Reuters that volumes will turn positive next year as the economy improves, and that he will increase shipping prices as well.  Fedex also announced that they would increase prices earlier.

Gold has jumped to another record high. (What else is new…)

Jim Sinclair’s Commentary

All governments at all levels speak their case.

Stimulus job boost in state exaggerated, review finds
Errors, incomplete data, estimated positions go into federal report

While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started.

While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started.

The Globe’s finding is based on the federal government’s just-released accounts of stimulus spending at the end of October. It lists the nearly $4 billion in stimulus awards made to an array of Massachusetts government agencies, universities, hospitals, private businesses, and nonprofit organizations, and notes how many jobs each created or saved.

But in interviews with recipients, the Globe found that several openly acknowledged creating far fewer jobs than they have been credited for.

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Jim Sinclair’s Commentary

Now here is a confidence building action.

Geithner Affirms Strong Dollar Policy
NOVEMBER 11, 2009, 12:39 P.M. ET
BY TAKASHI NAKAMICHI

TOKYO — U.S. Treasury Secretary Timothy Geithner said Wednesday that maintaining a strong dollar is "very important" for the country’s economy, sticking to his mantra on foreign-exchange policy as the U.S. currency continues its broad downtrend.

"I believe deeply that it’s very important for the U.S. and the economic health of the U.S. that we maintain a strong dollar," he said at a roundtable discussion with Japanese reporters. "We bear special responsibility for trying to make sure that we are implementing policy in the U.S. that will sustain confidence not just among American investors and .. savers but investors around …

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Jim Sinclair’s Commentary

Pakistan today. Plan A was a real bomb.

Now on to plan B. We then shoot Plan B up the flag pole to see if it gets saluted.

US denies Pakistan nuclear report

The US government has rejected a report that Washington has a team ready to secure Pakistan’s nuclear arsenal due to fears that the country is unstable.

Ian Kelly, a state department spokesman, dismissed the report by Seymour Hersh in the New Yorker which said that the US has a special force in place that would move to secure Pakistan’s nuclear weaponry in the event of a crisis.

"The US has no intention of seizing Pakistani nuclear weapons or material – we see Pakistan as a key ally in our common effort to fight violent extremists and to foster regional stability," Kelly said.

He said the US was "working very closely with Pakistan on a number of important initiatives regarding regional security".

"We do provide them with assistance, as you know," he said, but added: "We have confidence in the ability of the Pakistani government to provide adequate security for their nuclear programmes and materials."

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Blast kills 20 in NW Pakistan
Attack is third in days in area where army is taking on Taliban
By Pamela Constable and Haq Nawaz Khan
Washington Post Foreign Service 
Wednesday, November 11, 2009

ISLAMABAD, PAKISTAN– A suicide bomber rammed his car into a donkey cart in the northwest town of Charsadda on Tuesday, killing more than 20 people and wounding 45, officials said. It was the third suicide bombing since Saturday in the volatile border region, where army troops have battled Taliban forces for a month.

The three blasts in North-West Frontier Province have killed at least 40 people in four days, including a mayor who once backed the Taliban but later led a militia against it. He died Sunday when a suicide bomber set off a blast in a livestock market, where people were buying goats to sacrifice for the upcoming Eid holiday.

The latest bombings, all carried out against nonmilitary targets, highlight the human cost of Pakistan’s decision to launch a major army offensive against one of the Taliban’s main tribal strongholds. The violence increasingly has spilled into heavily populated areas nearby.

Army officials say the operation in the South Waziristan tribal area is going well and has strong support among the Pakistani public. But analysts said the militants’ aggressive moves beyond tribal borders — especially against local officials who defy them — is opening a deadly new front in a war that could still lose crucial public support.

Moreover, regional leaders and analysts said they are worried that the central government, by failing to follow up a series of army operations with rehabilitation aid and economic development, is opening the door for Taliban forces to return and regain influence over an impoverished, long-neglected tribal populace that has little loyalty to the state.

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Jim Sinclair’s Commentary

Chavez was quoted as saying, "Where did they come from?"

Venezuela’s Chavez Denies He Called Troops to War, Caracol Says
By Helen Murphy

Nov. 11 (Bloomberg) — Venezuelan President Hugo Chavez last night denied he had called for war with Colombia and said his comments to make preparations were defensive, Caracol Radio reported.

Chavez criticized Colombia’s decision to allow the U.S. to use seven military and air bases inside the Andean nation and said his comments on Nov. 8 were aimed at preparing his armed forces to defend the nation from attacks from the seven bases, Caracol cited Chavez as saying yesterday in Caracas.

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Jim Sinclair’s Commentary

Tanzania just grows and grows. It is amazing what great leadership will do for you.

Vodacom Business takes aim at corporate Tanzania
11 November, 2009

Vodacom Business has established a new unit in Vodacom Tanzania

According to Vodacom Business the new unit will pave the way for Vodacom Tanzania to provide new technologies and value-add solutions to meet the mobile and fixed voice-, video- and data requirements of Tanzanian businesses.

Wally Beelders, chief officer of Vodacom Business Africa, says the establishment of this business unit is a result of the need to increase the focus and align the strategic fit of Vodacom Tanzania with the directional growth of Corporate Tanzania.

“Vodacom Business is all about changing the way our clients do business, by providing world class managed and converged communication solutions to the African market”, he says.

“At the heart of changing the Tanzanian market are innovation and simplicity. Under the direction of Dylan Lennox, managing executive of Vodacom Business Tanzania, we will offer managed and converged solutions under three main product portfolios; voice, internet and data; providing tools for Tanzania to unleash its business potential by marrying the best the world has to offer with the realities on the ground.”

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Jim Sinclair’s Commentary

The March towards major external currency moves on in China.

Their plan unfolds. The West has no plan so therefore nothing unfolds.

No plan is perfect as it produces nothing. Nothing unfolds whatsoever.

HSBC facilitates trade settlement using Chinese’s Renminbi currency
www.chinaview.cn 2009-11-11 14:07:49

JAKARTA, Nov. 11 (Xinhua) — The Hong Kong Shanghai Banking Corporation (HSBC) launched trade transaction service with Chinese currency Renminbi here, makes Indonesia the sixth country in ASEAN countries enjoying the service, a senior HSBC official said here on Wednesday.

China will continuously play an important role as the main trade partner for Indonesian businessmen. "The Chinese government’s policy to allow Renminbi as trade payment currency would improvethe trade between the two countries," Head of Trade and Supply Chain HSBC Indonesia Vincent C. Sugianto said.

Citing the results of its Trade Confidence Index survey for the fourth quarter this year, he said the Indonesian businessmen wish to improve their businesses with their Chinese counterparts.

The commencement of HSBC’s trade payment with Chinese Renminbi currency service in Indonesia was marked with a transaction conducted by one of HSBC Indonesia’s customers PT Duta Permata Murni with its business counterpart in Shanghai, China recently.

The other ASEAN (Association of Southeast Asian Nations) countries served with HSBC’s Renminbi Trade Settlement service are Malaysia, Thailand, Singapore, Vietnam and Brunei Darussalam.

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China to guide yuan with eye on major currencies
By Zhou Xin and Jason Subler
Wednesday, November 11, 2009; 5:11 AM

BEIJING (Reuters) – China said on Wednesday it will consider major currencies in guiding the yuan, suggesting a departure from an effective dollar peg that has been in place since the middle of last year.

The reference to a new set of benchmarks for determining the value of the yuan holds out the possibility of a departure from recent practice, which has seen the currency held steady since mid-2008 around 6.83 per dollar.

"Following the principles of initiative, controllability and gradualism, with reference to international capital flows and changes in major currencies, we will improve the yuan exchange rate formation mechanism," the central bank said in a 46-page monetary policy report.

It was the first time since the landmark revaluation and launching of forex reforms in July 2005 that the People’s Bank of China has strayed from the language of keeping the yuan "basically stable at a reasonable and balanced level" when discussing future forex reforms in such quarterly reports.

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Jim Sinclair’s Commentary

As paper gold exchanges proliferate, more real bullion will be required for warehouse stock to give the paper contracts some semblance of reality.

Delivery problems will also increase as trader/investor interest in gold internationally increases because gold dealers tack on premiums not existent in the paper for delivery market.

The last day of gold ETF greatness is the first day a paper exchange has a public problem with delivery anywhere.

Be advised.

Hong Kong Mercantile to Offer Gold Futures Contract 
By Debra Mao

Nov. 11 (Bloomberg) — The Hong Kong Mercantile Exchange aims to start a gold futures contract by January, the company’s maiden offering as it seeks to take advantage of rising investor demand in the metal, which traded today at a record.

“We foresee Hong Kong establishing benchmark pricing of gold in the Asian time zone,” Chairman Barry Cheung said today at the Foreign Correspondents’ Club in Hong Kong. “Priorities changed” from an initial plan to begin business with a fuel-oil contract amid a shift in customer interest, Cheung said.

Gold has surged to an all-time high, driven by a weaker dollar and mounting investor concern that increased government spending worldwide to combat the global recession will debase paper currencies and fuel an increase in inflation.

Still, “Asian markets will still follow international markets for the time being” for gold, said Qu Mingyi, a dealer at Bank of China Ltd. in Shanghai. “It’s not like copper, because speculation and investment interest in gold is higher.”

During Asian hours, gold futures are traded in yuan on the Shanghai Futures Exchange and in dollars on the Comex division of the New York Mercantile Exchange. Hong Kong Exchanges & Clearing Ltd., Asia’s third-largest stock market, also began offering futures trading on Oct. 20, 2008. Hong Kong Mercantile’s planned contract is denominated in dollars.

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Jim Sinclair’s Commentary

You can make money long, with close technical analysis respect, with whatever base metal China is buying regardless of the expert opinions prolifically offered by the investment/commodity industry. It will be wild but right.

Copper Rises as Chinese, Japanese Factories Signal Metal Demand
By Anna Stablum

Nov. 11 (Bloomberg) — Copper rose to the highest price this month in New York and London as industrial production climbed in China, the world’s largest metals user, and machinery orders exceeded forecasts in Japan, the fourth biggest.

China’s industrial production climbed 16.1 percent in October, the most since March 2008, the statistics bureau said today. Japanese orders gained more than twice the pace economists estimated in September, signaling that a recovery in the world’s second-largest economy may be sustained.

“The data is showing strong growth in China,” Robin Bhar, an analyst at Credit Agricole SA’s Calyon unit in London, said by phone. “The Japanese numbers were better than expected so maybe there is some light at the end of the tunnel.”

December-delivery copper gained 5.5 cents, or 1.8 percent, to $3.0155 a pound on the New York Mercantile Exchange’s Comex division at 8:17 a.m. local time. It reached $3.0375 earlier, the highest intraday price since Oct. 30. Copper for three-month delivery rose 1.7 percent to $6,642 a metric ton on the London Metal Exchange.

The Dollar Index, a six-currency gauge of the greenback’s performance, fell as much as 0.3 percent to its lowest level since August last year. A weaker U.S. currency makes dollar- priced metals cheaper to those with other monies.

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Jim Sinclair’s Commentary

How much of this is dollar related? I would think most of it over the last 60 days.

Weimar, here we come. The equity gang should love it when the dollar trades at USDX .6200

What would be required on the dollar for Dow 30,000? How about under USDX .5200

S&P 500 Climbs to Near 13-Month High as Commodities Rally
By Mary Childs

Nov. 11 (Bloomberg) — U.S. stocks extended a global advance, sending the Standard & Poor’s 500 Index to near a 13- month high, as China’s industrial production surged and policy makers signaled interest rates will remain at a record low. Gold jumped to a record.

Bank of America Corp. and Home Depot Inc. led the Dow Jones Industrial Average above its highest close since October 2008. Toll Brothers Inc. led homebuilders higher after saying orders surged and cancellations slowed. Barrick Gold Corp., the largest producer of bullion, and Alcoa Inc. climbed with metals prices. The MSCI Emerging Markets Index rose 0.8 percent, lifting its six-day rally to 7.5 percent.

The S&P 500 increased 0.1 percent to 1,094.49 at 11:56 a.m. in New York and climbed as high as 1,105.37, above its highest close since Oct. 2, 2008. The Dow added 11.94 points, or 0.1 percent, to 10,258.91. Almost three stocks gained for every two falling on the New York Stock Exchange.

“You got people out there saying the bear market rally’s over,” said Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, which manages $214 billion. “I think they’re smoking dope.”

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Jim Sinclair’s Commentary

And so it goes in a planetary sense.

Gold is going to $1224, $1278, $1650 and then on the Alf’s numbers.

Vietnam to allow gold imports to stabilise market
11.11.09, 06:25 AM EST
By John Ruwitch and Ho Binh Minh

HANOI, Nov 11 (Reuters) – Vietnam’s central bank on Wednesday lifted a 1-1/2-year-old ban on gold imports in a bid to stabilise the market after a sharp rise in prices helped drive the country’s dong currency to a record low.

‘The State Bank of Vietnam will allow gold imports with a volume sufficient to intervene in the market in order to stabilise the market, combat speculation and prevent an impact on the interests of the people,’ the central bank said on its Web site, www.sbv.gov.vn.

Five or six companies would be allowed to import unlimited quantities of gold, state-run news Web site VNexpress.net quoted State Bank of Vietnam Governor Nguyen Van Giau as saying on Wednesday afternoon.

He did not give details or a timeframe.

The ban on gold imports since May 2008 led to a gap between domestic and international prices, and recently traders say that spread, plus the rise in gold prices globally, triggered a surge in demand for dollars.

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Jim Sinclair’s Commentary

What is wrong with Mr. Zoellick? Does he not watch F-TV?

This is the new normal. People don’t have to work to have Wall Street booming. All that is required is $12 trillion from the Treasury and Federal Reserve.

The bubble machine will save us.

World Bank warns unemployment threatens US economy
By ALEX KENNEDY (AP)

SINGAPORE — Stubbornly high joblessness threatens to trigger loan defaults and drag on consumption next year, hobbling a U.S. economy struggling to rebound from recession, World Bank President Robert Zoellick said Wednesday.

Zoellick warned that the U.S. unemployment rate, which jumped to a 26-year high of 10.2 percent in October, will likely remain elevated in 2010.

"You’re going to have problems with delinquencies of credit card loans, consumer loans, people won’t be able to pay their mortgages," Zoellick told reporters in Singapore. "Some banks are going to continue to be troubled by bad loans."

Government stimulus spending will likely fuel economic growth through the middle of next year, Zoellick said. After that, consumer spending and business investment must take the baton to boost expansion, he said.

"If you’ve got large scale unemployment, if you’ve got consumers rebuilding savings and deleveraging, I don’t think the consumer is going to play that role," he said. "What’s the other source of demand?"

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Jim Sinclair’s Commentary

No problem. Just watch the movie "Armageddon" starring Bruce Willis.

It is time well spent as it is a lesson in "exploration drilling 101."

Bear is my favorite driller in that movie.

Asteroid passes just 8,700miles from Earth – with only 15 hours warning
By Claire Bates
Last updated at 10:01 AM on 11th November 2009

Although no one noticed at the time, the Earth was almost hit by an asteroid last Friday.

The previously undiscovered asteroid came within 8,700miles of Earth but astronomers noticed it only 15 hours before it made its closest approach.

Its orbit brought it 30 times nearer than the Moon, which is 250,000 miles away.

But before you head for the nuclear bunkers you will be relieved to learn the tumbling rock was only 23ft across. Similar sized objects pass by this close to Earth about twice a year and impact on the planet about once every five years.

Astronomers believe the object, called 2009 VA, would have almost completely burned up while entering Earth’s atmosphere, causing a brilliant fireball in the sky but no major damage to the surface.

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Jim Sinclair’s Commentary

Turkey is playing with fire. They really are not up to the game they are playing.

Turkey runs hot and cold
By Andrew Novo

Autumn has proved a busy season for Turkey as the nation of more than 76 million continues to establish itself as a regional hegemon while pursuing a policy of "no problems with neighbors". While the process of reconciling with neighbors – a tenuous agreement with Armenia, de-mining the border with Syria, a new energy deal with Russia and open amity with Iran – is yielding results, "no problems with neighbors" may mean new problems with old friends.

Turkish foreign affairs have made recent headlines: on October 10, Turkey signed an agreement normalizing relations with Armenia. The border between the two countries, closed since 1993, was opened. Two days later, Turkey canceled a joint air force exercise with Israel. A few days after that, the European Union released its annual report on the progress made by countries aspiring to EU membership.

Naturally, Turkey figured prominently in the report, which many commentators saw as a balancing act, pitting Turkey’s progress – improvements in relations with Armenia and Syria abroad, and more rights for Kurds and improved civil-military relations at home – against its shortcomings: a lack of progress on the Cyprus issue and the recent ruling and fine against the Dogan Media Group.

The dichotomy inherent in the EU report mirrors larger questions not only about Turkish politics and society but also about the country’s diplomatic posture. Turkey is familiar with occupying a unique position in world affairs. As recently as the early 20th century, it was a polyglot Muslim empire with deep roots in Europe. In the time-worn but geographically accurate phrase, it is the bridge between Europe and Asia.

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