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Wednesday July 16, 2008

Bank failures, inflation rising, dollar falling, wars and rumors of wars, oil rising, prices at the pump rising and wages going nowhere.  The Fed bails out the big boys while letting everyone else fall into the abyss.

Don't look to the government to save you or the economy.  If you want to do what you can to protect yourself and your family from the economic hell we're in then I would say buy gold and silver while you still can. 

For more advice go to www.jsmineset.com and read what Jim Sinclair, Dan Norcini and Monty Guild have to say.  I take what they say as the gospel.  They're not selling anything and they're not making money off their advice.  They're doing what they do not because they have to, but because they care.

Tuesday, July 8, 2008

Crisis wipes $1 trillion from financial stocks

By Joe Bel Bruno 07 July 2008 @ 04:57 pm EST NEW YORK (AP) -

U.S. financial companies have lost more than $1 trillion in value this year, and yet another decline on Monday shows concerns aren't going away soon.

Banks and brokerages began the week lower on the same fears that have been proven toxic since last summer in the ongoing credit crisis. The financial sector was hit with a confluence of troubles on Monday: cautious remarks from a Federal Reserve official and new capital concerns at Freddie Mac and Fannie Mae.

The drop in names like Lehman Brothers, Morgan Stanley and Merrill Lynch caused the financial section of the Standard & Poor's 500 index to lose almost $150 billion in value on Monday, according to the rating agency. That means S&P 500's 85 financial components have lost some $1.3 trillion since the sector reached a high last October.

Even more startling is that shares of 35 of the companies, which include insurers, have lost more than half their value so far this year. The financial sector used to be the index's main driver, and many economists believe that the broader market will rise or fall on their health. "Some would argue that perhaps the sell-off in financials is overdone, but at the same time there is just much uncertainty out there about write-offs, loan losses, and how bad the housing market is," said Jim Herrick, a director of equity trading at Baird & Co. "For a period of time the pain was in the big money center banks, but now it's spreading."

Fannie and Freddie fell sharply after Lehman Brothers analyst Bruce Harting said the two government-backed lenders might need to raise billions of dollars in new capital. Both are facing a proposed change to accounting standards that would require financial services firms move bonds backed by pools of loans, also known as securitizations, off their balance sheets. If this rule is passed, it would end Freddie and Fannie's primary source of generating new revenue. Harting said Fannie Mae would need to raise $46 billion in cash to meet capital requirements, while Freddie Mac would need $29 billion.

The broader financial sector was hurt after San Francisco Federal Reserve President Janet Yellen said problems in the housing market and banking system could get even worse before the economy recovers. Global banks and brokerages have lost nearly $300 billion from investments in mortgage-backed securities and other risky investments since the credit crisis began one year ago. And there are fresh signs that Wall Street's biggest investment houses are having trouble navigating through volatile markets.

Goldman Sachs Group Inc., the world's biggest investment bank, disclosed in a regulatory filing that it lost at least $100 million on nine trading days during the second quarter. Goldman reported that total trading revenue in the second quarter fell 17 percent to $4.87 billion, according to the filing. Full Article Here

Friday, July 4, 2008

The ECB raised it's rate to 4.25% on Thursday and while looking at the Dollar chart above you might think that was a dollar positive move.  Don't let the manipulation fool you.  I don't see how it could last very long seeing as how the  fundamentals backing the US Dollar are so weak.  For more on that point, visit www.jsmineset.com for a good throuough explanation.

Now, here's something that might shock you if you haven't been keeping up on financial events...

Banks: Everything must go!

Take a look at that dollar chart above, then look at the gold chart and then check out the euro chart here:  http://quotes.ino.com/chart/?s=FOREX_EURUSD&t=f

Inflation in Europe is at around 4%, the highest in 16 years.  The Euro is strong and when they increase the rates over there to combat inflation, it's going to be even stronger against the dollar. 

The Fed worries that will happen and they don't want the ECB (European Central Bank) to raise their rates but in an environment like this, do you think the ECB is going to worry about us or themselves? 

Gold is going higher along with silver and oil.  The Fed continues to blow hot air in the form of spin but that's all they've got left and their credibility is shot.

Citigroup says long-term gold price could double or even triple

By Dorothy Kosich

Citigroup forecasts that "gold is likely to regain $1,000/oz by end-08 and to work higher through 2009-2010." In their recent Gold Commodity Update, Citigroup metals analysts John H. Hill and Graham Wark also predicted that "longer term, we believe that gold is capable of doubling or tripling from current levels." The Citi global metals forecasts have an upward bias, at $906/$950/1000 average in 2008/09/10. The analysts said "secular and seasonal factors favor gold" during the second half of this year. "We remain positive on gold, based on macro and supply/demand factors. The forces that have propelled gold for 5 years are firmly in place." During the second quarter of this year, gold has averaged $896/oz, up 34% from the same quarter of 2007 and down 3% from the first quarter of this year. "Following a series of downside fundamental tests gold appears to have found a floor, and quietly climbed back to $917/oz." "Despite extensive hand-wringing, the ‘floor in the dollar' has inflicted minimal damage," the analysts noted. "We believe the drivers of the gold bull market remain intact, heading into a favorable period." "We see gold as well-positioned heading into Autumn, when fabrication tends to heighten the market," they added. Nevertheless, Hill and Wark warned, "It will be important for seasonal/volatility dampened fabrication demand to recover, before gold can move higher." However, they added," Longer term, we would not be surprised to see gold double from current levels as the global policy prescriptions for the credit crunch remain powerfully and uniformly re-flationary." More ...

Monday, June 30, 2008

Fed's flinch galvanizes gold

Commentary: One expert sees price topping $1,200 an ounce this year

Thursday, June 26, 2008

Yesterday the Fed left rates unchanged and made a few statements that in short read as less growth and higher inflation.  Actually the Fed is caught between a rock and a hard place.  If they lower rates it sinks the dollar, if they raise rates it sinks the credit and housing industry.  They are left with nothing but talk and the spin game can only go so far.  Today we see how far that got them.

The markets reacted by sinking the dollar and pushing oil gold and silver way up.

Check out the Euro here...

http://quotes.ino.com/chart/?s=FOREX_EURUSD&t=f

Thursday, June 19, 2008

"The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.

"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.

A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.

	RBS warning: Be prepared for a 'nasty' period

Such a slide on world bourses would amount to one of the worst bear markets over the last century.

RBS alert: Quotes from the report

Fund managers react to RBS alert

Support for the euro is in doubt

RBS said the iTraxx index of high-grade corporate bonds could soar to 130/150 while the "Crossover" index of lower grade corporate bonds could reach 650/700 in a renewed bout of panic on the debt markets.

"I do not think I can be much blunter. If you have to be in credit, focus on quality, short durations, non-cyclical defensive names.

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"Cash is the key safe haven. This is about not losing your money, and not losing your job," said Mr Janjuah, who became a City star after his grim warnings last year about the credit crisis proved all too accurate.

RBS expects Wall Street to rally a little further into early July before short-lived momentum from America's fiscal boost begins to fizzle out, and the delayed effects of the oil spike inflict their damage.

"Globalisation was always going to risk putting G7 bankers into a dangerous corner at some point. We have got to that point," he said.

US Federal Reserve and the European Central Bank both face a Hobson's choice as workers start to lose their jobs in earnest and lenders cut off credit.

The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said.

Morgan Stanley warns of catastrophe

More comment and analysis from the Telegraph

"The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets," he said.

Kit Jukes, RBS's head of debt markets, said Europe would not be immune. "Economic weakness is spreading and the latest data on consumer demand and confidence are dire. The ECB is hell-bent on raising rates.

"The political fall-out could be substantial as finance ministers from the weaker economies rail at the ECB. Wider spreads between the German Bunds and peripheral markets seem assured," he said.

Ultimately, the bank expects the oil price spike to subside as the more powerful force of debt deflation takes hold next year."

source:  http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=A1YourView&xml=/money/2008/06/18/cnrbs118.xml

Monday, June 9, 2008

Ever wonder why so many people don't trust banks or politicians?  Here's one good reason below...

By ELISABETH LEAMY
May 12, 2008

The 50 U.S. states are holding more than $32 billion worth of unclaimed property that they're supposed to safeguard for their citizens. But a "Good Morning America" investigation found some states aggressively seize property that isn't really unclaimed and then use the money -- your money -- to balance their budgets.

State governments are seizing contents and auctioning off citizen's valuables.

Unclaimed property consists of things like forgotten apartment security deposits, uncashed dividend checks and safe-deposit boxes abandoned when an elderly relative dies.

Banks and other businesses are required to turn that property over to the state for safekeeping. The problem is that the states return less than a quarter of unclaimed property to the rightful owners.

Not-So-Safe-Deposit Boxes

San Francisco resident Carla Ruff's safe-deposit box was drilled, seized, and turned over to the state of California, marked "owner unknown."

"I was appalled," Ruff said. "I felt violated."

Unknown? Carla's name was right on documents in the box at the Noe Valley Bank of America location. So was her address -- a house about six blocks from the bank. Carla had a checking account at the bank, too -- still does -- and receives regular statements. Plus, she has receipts showing she's the kind of person who paid her box rental fee. And yet, she says nobody ever notified her.

"They are zealously uncovering accounts that are not unclaimed," Ruff said.

To make matters worse, Ruff discovered the loss when she went to her box to retrieve important paperwork she needed because her husband was dying. Those papers had been shredded.

And that's not all. Her great-grandmother's precious natural pearls and other jewelry had been auctioned off. They were sold for just $1,800, even though they were appraised for $82,500.

"These things were things that she gave to me," Ruff said. "I valued them because I loved her."

Bank of America told ABC News it deeply regrets the situation and appreciates the difficulty of what Mrs. Ruff was going through. The bank has reached a settlement with Ruff and continues to update its unclaimed property procedures as laws change.

California's Class Action Lawsuit

Ruff is not alone. Attorney Bill Palmer represents her and countless other citizens in a class action lawsuit against the state of California.

"They figured the safety-deposit box was safer than keeping it under the mattress," Palmer said. "In the case of a lot of citizens, they were wrong, weren't they?"

California law used to say property was unclaimed if the rightful owner had had no contact with the business for 15 years. But during various state budget crises, the waiting period was reduced to seven years, and then five, and then three. Legislators even tried for one year. Why? Because the state wanted to use that free money.

(Getty Images)

"That's absolutely correct," said California State Controller John Chiang, who inherited the situation when he came into office. "What we've done here over the last two decades has been dead wrong. We've kept the property and not provided owners with the opportunities -- the best opportunities -- to get their property back."

Chiang now faces the daunting task of returning $5.1 billion worth of unclaimed property to people. Some states keep their unclaimed property in a special trust fund and only tap into the interest they earn on it. But California dumps the money into the general fund -- and spends it.

"It's supposed to be segregated and protected," Palmer said. "California has taken all of that $5.1 billion and has used it as a massive loan."

California became so addicted to spending people's money, that, for years, it simply stopped sending notices to the rightful owners. ABC News obtained a 1996 internal memo in which the lawyer for the Bureau of Unclaimed Property argued against expanding programs to notify rightful owners. He wrote, "It could well result in additional claims of monies that would otherwise flow into the general fund."

Seizing More Than Safe-Deposit Boxes

It's not just safe-deposit boxes. A British man went to retire and discovered the $4 million in U.S. stock he had been counting on had been seized and sold for $200,000 years earlier -- even though he was in touch with the company about other matters.

A Sacramento family lost out on railroad land rights their ancestors had owned for generations -- also sold off as unclaimed property.

"If I had hung onto it, I would be a millionaire, multimillionaire," said John Whitley. "But that didn't happen because we didn't get to hold it." Full Story ...

 

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Sunday, May 25, 2008

Scapegoat:   The word is more widely used as a metaphor, referring to someone who is blamed for misfortunes, generally as a way of distracting attention from the real causes. http://en.wikipedia.org/wiki/Scapegoat

Politicians are notorious for "distracting attention from the real causes."  If you want to find the real cause of oil and other commodities rising in price(commonly referred to as INFLATION) then all you have to do is look at your politicians.  This has been building for the last few decades and those who caused it will do anything to keep the public from finding out the truth. 

Germany in call for ban on oil speculation

It is the most drastic proposal to date amid escalating calls from Europe, the US and Asia for controls on market forces, underscoring the profound shift in the political climate since the credit crunch began. India has already suspended futures trading of five commodities.

	Speculators are split, with some betting that oil will fall

Uwe Beckmeyer, transport chief for Germany's Social Democrats, said his party would call for joint measures by the G8 powers to prohibit leveraged trading on energy contracts. "It's an extreme step but it has to be done," he told the Berlin media.

Mr Beckmeyer said the last 25pc rise in the price of oil to $135 a barrel had nothing to do with underlying supply and demand. “It’s pure speculation,” he said.

Tuesday, May 20, 2008

The chart below from ino.com shows the value of the US Dollar from Jan 2006 to present.  My only question to you is, does that look like something you would want to own?

Now the next chart shows gold from April 2006 to present.  Doesn't this look better?

I don't know about you but if I were to choose between the dollar or gold as a vehicle to store my savings, after looking at the charts above, it's a no brainer.  Gold takes the cake.

Saturday, May 17, 2008

Gold closed just over $900 USD per ounce on Friday.  That's a loud and clear voice telling me it's back and it's on the way to $1,000. 

The guru of gold, Jim Sinclair at www.jsmineset.com is the only person I trust concerning gold.  It's free and it is by far the best advice anyone can get regarding gold.  I suggest you click that ling and go there now.

Thursday, May 7, 2008

Now they say it.  These guys aren't dumb, they're just a bunch of wolves in sheeps clothing.  Spining and pretending they're shocked is what they do best. 

IMF worries that commodities may not be a bubble

IMF Warns on Global Inflation

By Krishna Guha, Javier Blas,
Chris Giles, and Ralph Atkins
Financial Times, London
Thursday, May 8, 2008

http://www.ft.com/cms/s/0/f30215fc-1d3d-11dd-82ae-000077b07658.html

Global inflation has re-emerged as a major threat to the world economy, the International Monetary Fund said on Thursday in a stark warning that marked an abrupt change of tone from its emphasis on the risks to growth.

John Lipsky, IMF deputy managing director, said "inflation concerns have resurfaced after years of quiescence" due to soaring energy and food prices. Mr Lipsky said global growth was slowing but headline inflation was "accelerating."

The IMF warning came as crude oil prices hit a record of almost $124 a barrel, up 99 per cent in the past 12 months, and customers scrambled to take out insurance against prices rising above $200 a barrel.

In an indication the commodities boom may not be the bubble imagined, Mr Lipsky said the forces pushing prices up "appear to be fundamental in nature" -- and these were being amplified by lower US interest rates and the dollar's decline.

He was "optimistic" that there would not be a repeat of the early 1970s, when increasing energy prices ushered in a period of rising inflation expectations and accelerating inflation, but he said this risk "cannot be discarded out of hand."

Mr Lipsky said policymakers must respond aggressively to any sign of rising inflation expectations "lest the impressive gains in global stability attained in recent years be sacrificed."

The IMF's inflation warning was reinforced by European central bankers, as the European Central Bank and Bank of England left interest rates unchanged despite increasing signs of economic weakness.

The eurozone was "experiencing a rather protracted period of high annual rates of inflation," Jean-Claude Trichet, ECB president said. It was "imperative" that the households and companies did not think inflation rates were normal and raise prices and wages accordingly.

The Bank of England rejected calls from representatives of the increasingly sickly housing market for lower interest rates, maintaining its rate at 5 per cent. The monetary policy committee felt the increasing tension between rising inflation and lower growth did not allow it to cut rates twice in successive months.

The majority on the MPC are cautious cutting interest rates aggressively as inflation is moving increasingly above the bank's 2 per cent target would send the wrong signal about its determination not to allow higher inflation to become ingrained again in British society.

The switch in emphasis from the IMF from growth to inflation follows the latest surge in the price of oil.

Mr Lipsky suggested part of this could be due to monetary policy and exchange rates. He said IMF research suggests low interest rates effect commodity prices "above and beyond the traditional effect of increased demand" while the decline in the dollar since 2002 was responsible for about $25 of the increase in the oil price.

The IMF warned food prices would stay high for the foreseeable future.

Tuesday, May 6, 2008

Financial Cyclones

I'm sure many of you have read the news about the cyclone that hit Myanmar and killed thousands and how their government failed to warn their own people. 

While reading that I am reminded of the financial cyclone that is slowly killing millions financially.  Goldman Sachs recently voiced their belief that oil will hit between $150 and $200 per barrel in the near future.  Inflation here in the States is nearing all time highs.  Gas prices, food prices, everything you need prices are rising like a rocket and the entire time, all you hear on the news is jibberish.  I guess the government likes it that way because if you knew how bad things really are, consumer spending would come to a screeching halt and I'm sure those responsible for the mess also fear the idea of jail time.

Little articles like the one about the pawnbroker I read of in 'The S&A Digest' from www.stansberryresearch.com. 

"The downturn in the economy means huge profits for pawnshops. And it's not just gas-station attendants and waitresses fueling the growth. A Philadelphia pawnshop reported making more loans to upper-middle class citizens and businesses. One local, high-end jewelry shop pawned $150,000 of inventory just to make payroll.

Friday, April 25, 2008

Here's a closer look at the latest U.S. Dollar "rally".

It's got a long long ways to climb before you could call THAT a rally.

Monday, April 28, 2008

Will the Fed cut rates again?  If they do cut rates it weakens the dollar and raises inflation but helps the credit problems. 

If they don't cut or if they were to raise the rate (which I doubt will happen), it would help the dollar a little but the credit troubles would get worse. 

They're damned if they do and damned if they don't.  All I know is I wouldn't have my savings in the form of dollars.

Sometimes I wonder though...If rumors about a possible "Amero" currency were true, what better way to get people to accept it than to drive the economy into a huge hole, drive the dollar down to virtually nothing and let the people suffer a while.  Then when everything looks hopeless, here comes your hero, with that bright idea that will save us all....the Amero.

Thursday, April 24, 2008

I love the way the Fed, our politicians, bankers and the media spins reality into fairy tales.  Some of you may have seen the headline stating: Fed to sell $75B in Treasurys.  They're referring to it as an "auction".  The Fed isn't auctioning anythging and they only thing they're selling is BS to the public.  They use the word auction in place of loaning money to banks in return for their worthless derivatives.  Why would they do this?  To save those banks for failing.  Why save them?  Because the economy is on the brink of disaster and they're trying to make the crash as painless as possible and they're responsible for it in the first place.  Besides, the Fed creates money out of thin air and they'll keep doing it as much as they have to.  Who pays?  YOU and ME!

I say "They" meaing the Fed, the politicians, the media and the bankers.  Those four groups all lumped into one greasy, greedy, selfish ball of liars.  They need to save their own asses and they spin it into claiming they're "easing credit woes" because they care about you so very much.

I doubt they think we're stupid enough to believe that but they'll lie and keep lying until we do. 

Now I'm wondering what kind of fairy tale they'll spin about this headline: Wal-Mart's Sam's Club chain limits rice purchase.

While you read this I'll be at the store hoarding rice hahaha.

Monday, April 21, 2008

Below is an article from http://gata.org/ . Enjoy!

Edwin Vieira Jr.: Silver and gold guarantee freedom

Address by Edwin Vieira Jr.
Gold Anti-Trust Action Committee Inc. conference
GATA Goes to Washington -- Anybody Seen Our Gold?
Hyatt Regency Crystal City Hotel, Arlington, Virginia
Friday, April 18, 2008

Silver and gold are not merely valuable commodities, investments, and media of exchange. More importantly, they are key "checks and balances" in America's legal and political institutions.

The fight against the use of silver and gold as money that has been waged by bankers and rogue politicians since the 1870s as to silver and the 1930s as to gold --and will intensify as fiat currencies collapse throughout the world -- is ultimately directed against America's national independence, her constitutional government, and every common American's individual liberty and prosperity.

The Constitution of the United States adopted a monetary system consisting of silver and gold coin, in which the standard is the "dollar," containing 371 1/4 grains (troy) of fine silver, with the values of gold coins to be measured in "dollars" according to the free market's rate of exchange between silver and gold. Neither the general government nor any state is authorized to emit paper currency.

These restrictions prevent rogue public officials from turning public debts into currency, as a means for redistributing wealth from society to political elitists and their clients in special-interest groups.

Furthermore, although the Constitution does not mention banks, either public or private, its only correct construction requires separation of bank and state -- extirpation of all inherently fraudulent fractional-reserve banking schemes -- and rigorous regulation of all other fractional-reserve arrangements that might operate fraudulently. (See Edwin Vieira Jr., "Pieces of Eight: The Monetary Powers and Disabilities of the United States Constitution," second revised edition, 2002.)

But since the early 1800s rogue politicians and bankers have steadily subverted the Constitution by forging an increasingly tight relationship between bank and state. Through the grant of one abusive special privilege after another, politicians have immunized fractional-reserve banking against the just economic and legal consequences of its own inevitable failures, so that public officials and bankers could turn both public and private debts into currency -- thus separating the supply and the purchasing power of currency from the economic discipline of the free market, and rendering those matters largely political in nature.

Under the Federal Reserve System, Americans no longer enjoy "money" in the economic sense but are subjected to what must be denoted as "political currency," with emphasis on the adjective. Political currency is emitted on the basis of political debt