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Mon, Jun 20, 2011 - 9:14am

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D0C
Jun 20, 2011 - 12:46pm

@exergy

Excellent take. kudos and hat tip. A very lucid interpretation. As a business owner, you (I) always seem to have a more realistic idea of the marketplace and what the real economy is doing. Just thought I'd chime in. When you brought up the 'Rothchild' reference I figured I would ad this. Open question to anyone or point me to the right forum. When I have tried to research who actually owns the Federal Reserve, who were the group back in 1913(?year)that got to congress to do this, the only sites with information tend to also reference the a)mark of the beast or b) the masons or c)all the other crap that feeble brains are fooled with. I really don't want to debate these conspiracy theories. Where can I get definitive facts about the people, groups, banks, whoever, that was instrumental in the founding of the federal reserve. Tyvm.

¤
Jun 20, 2011 - 12:31pm

U.S. Default Likely

By sgoldstein[at]marketwatch[dot]com (Steve Goldstein), MarketWatch

WASHINGTON (MarketWatch) — Bank reserves swelling, and commodity prices surging — that’s the situation that the U.S. economy is now confronting.

But it also was the case back in 1937. And that’s what worries Ethan Harris, North American economist at Bank of America Merrill Lynch.

He fears, now like then, that tightening of monetary and fiscal policy could cause a recession, so much so that he thinks a temporary default on U.S. Treasury obligations may be preferable to overly swift spending cuts.

His view stands at odds with the rest of Wall Street, which has frequently communicated to congressional Republicans as well as the White House their desire to see the $14.3 trillion debt ceiling increased. See related story on Wall Street warnings.

They fear a temporary default could disrupt the $4 trillion Treasury financing market, could spark a run on money-market funds and increase mortgage rates.

It’s also at odds from the broader public: 70% say a default would be bad for the economy, and 56% say failure to cut spending is worse, according to a telephone survey from Rasmussen Reports of likely U.S. voters.

But Harris is concerned about the parallels from the “recession within a Great Depression” of the late 1930s.

Back then, the Federal Reserve increased reserve requirements, and a federal government “exhausted” by deficit spending hiked tax rates and slowed spending on the Works Progress Administration, Harris said.

The rhetoric of newly elected President Franklin D. Roosevelt also scared businesses.

Harris said the current Fed, and in particular Chairman Ben Bernanke, has learned that expansion of reserves is only inflationary if it prompts a boom in bank lending. And the more business-friendly tone of late from the Obama administration has shown the president “has recognized how negative rhetoric can damage business confidence and hiring.”

But he’s worried about fiscal tightening.

“Today, as in the mid-1930s, fiscal fatigue has set in. The debate has shifted from keeping the recovery going to removing fiscal support,” Harris said.

He points out that even if Congress takes no action, programs comprising more than a percentage point of gross domestic product are due to expire next year, and that the debate about austerity can hurt even before the cuts kick in.

“The risk of a bad outcome is high,” he said. “We are not sure whether it is worse to do nothing, and temporarily default on the debt, or to do too much and enact big front-loaded deficit cuts.”

Harris said the best policy outcome would be modest upfront spending cuts with a commitment to deal with long-run structural deficit concerns after the 2012 presidential election.

agNau
Jun 20, 2011 - 12:16pm

@best ever.....

I am watching the same. Kudo's and a Tip of the hat!

jem
Jun 20, 2011 - 11:24am

hat tips

Thanks, Turd. I love your new site! The hat tip is great. It is a much better system than ZH junk.

Exergy
Jun 20, 2011 - 11:24am
217

They are worried for us...not themselves.

I listened to the interview and perhaps it is worth pausing for a second and putting it in context.

Jim Sinclair has been calling for MACRO moves in precious metals for years. The man simply lives at the 10,000 foot level and whether you know it or not... his father was Jessie Livermore's partner...together they personally traded 10% of the NY stock exchange...so he grew up on the knee of best traders in the world and lived inside the system. Many suggest that today he still has connections to the banking families that own the "system"...whatever.

The sense of urgency in his voice is real...but not for him...for US! He has royalty deals and three mines coming online just at the perfect time...this year and the next2 years.

I believe he see's "right here, right now" as the situation he has been warning about for years.

If you listen to James Turk... you get the following info: The ECB (European Central Bank) is leveraged up the Ying Yang. Their capital base is such that it would only take a 4% "haircut" on their book to wipe out ALL of their capital base and trigger a call to the rest of the countries for money. Therefore any Greek haircut will wipe them out and Germany know this. The Fed is actually leveraged DOUBLE and a 2.5% correction would wipe them out.

All agree that it could be anything that triggers the house of cards to collapse. Sinclair is saying we are there right now and we don't need any more problems... we have enough right here and now.

Good Lord ...even a Rothschild spoke....and they never speak.

Anywhere you look you still see people calling for deflation. Yes the US housing market is in the crapper... that's because they sold too many to people who could not afford them and now there is a glut. (supply and demand). The REAL measure of deflation is the cost of money. In a true Deflation...the dollar gets stronger and buys more... in that scenario it would also be worth more. Does anyone see the US dollar getting stronger or interest rates rising? The US tripled their money supply and are running multi trillion dollar deficits while the two parties argue over the whether to raise the limit on their credit card. The US deficit this year is about equal to their GDP. (It is larger if you take out government spending which should not really be included in a GDP number anyway)

Mining stock ...is being actively shorted by the Hedge fund's and has been for quite a while now. The problem the Hedge funds have is the same that the bullion banks had in the early 90's. They have driven the value of shares down below their intrinsic worth ...if gold and silver bullion stay at these price levels...the value of the companies are worth MUCH more than their stock is telling us they are worth today and eventually folks will see this a a buying opportunity... not a "bubble.

The Cartel tries to hold down the price of bullion ...period..full stop...end of story. To that end they naked short, leverage, settle for cash, change the rules, change the laws and just about everthing they can to take folks eye off the value of a hard asset like gold and silver ...which by the way they are short of to cover their obligations.

Do we need to talk about what happens when the Middle east oil exporting countries drop their dollar peg for oil...or why the Saudies are using the Brent price for crude (set in Europe) rather than the West Texas price (set in the US).

How about the fact that the US debt is something like 100 trillion.

How about the cost to service the debt being greater than the entire US tax revenue base (shadow stats).

All of that said... forget the daily and weekly view...pull up those decade charts and relax.

One interesting note from James Turk is that the buying power of Gold has been relatively constant since 1950. Can you say Inflation anyone?

The Final point I want to make is this... All of my goods now on the water from China for my stores are UP an average of 15% and my goods being ordered for next spring are up 25% on average. If that is not consumer inflation...please tell me what is.

NW VIEW
Jun 20, 2011 - 11:16am

SOMETHING IS BREWING

This market just has a funny feeling today. The DJIA is up 50 and GDXJ is down to $32.33 which shines a light on the direction of miners. My old bones are saying " load up a bit on something like BGZ and save the cash to buy back into GDXJ later". We all know that there is a wagon load of cash sitting on the sidelines and it will not come back into the miners until T.F. and others say "Dive In Bigtime".

Shill
Jun 20, 2011 - 11:14am

FED

  1. 11:07a

    Fed buys $4.62 bln in Treasurys; bonds quiet

caramel
Jun 20, 2011 - 11:11am

posted this in a forum topic

posted this in a forum topic but since its the same topic, posting it here.

caution remains the order of the day, but the trend and signs suggest they are right. The upticks in the mining space might not be immediate but the higher metal prices and higher revenues/income should result in higher prices. They continued to reiterate that eventually, the fundamentals will take over. I also agree with them that the activity we've seen ie. depressed mining stocks, is partly a function of shorts trying to cover, and in particular, naked shorts. There is no doubt in my mind shorts will lose alot of $$'s. The naked short sellers caught on the wrong side will be forced to buy back shares that just aren't there for buying at the price they want it at. Ergo, to get back onside, they'll need to bid up the price to entice longs to sell shares. And in the acquisition activity expected and the signs point to higher prices.

Kumanari
Jun 20, 2011 - 11:02am

Time and Price Supersized

"The under performance of the gold stocks is mainly related to the massive bankster financed short positions in play on the stocks. You will see the funds bust out of their gold stocks short trade. It's a crisis and the banksters will use every turn in the crisis road to unveil a new rockslide, and they have. In a supersize crisis delays and surprises are supersize. Everything has been supersized in both TIME and PRICE."

Stewart Thomson

This will end very abruptly and violently.

Eric Original
Jun 20, 2011 - 10:57am

Hey All

I started up a thread on some of my gold miners. There's not a lot there yet, but please stop by. We are having an open house today with cookies and lemonade for all!

https://www.tfmetalsreport.com/forum/672/eric-os-favorite-gold-miners

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Key Economic Events Week of 11/23

11/23 9:45 ET Markit flash PMIs
11/23 1:00 ET Goon Daly
11/23 3:00 ET Goon Evans
11/24 9:00 ET Case-Shiller home prices
11/24 10:00 ET Consumer Confidence
11/24 11:00 ET Goon Bullard
11/24 12:00 ET Goon Williams
11/24 12:45 ET Goon Chlamydia
11/25 8:30 ET Q3 GDP 2nd guess
11/25 8:30 ET Durable Goods
11/25 10:00 ET Personal Inc and Spend
11/25 10:00 ET Core inflation
11/26 US Market holiday

Key Economic Events Week of 11/16

11/16 2:00 pm ET Goon Chlamydia
11/17 8:30 ET Retail Sales
11/17 8:30 ET Import Price Index
11/17 9:15 ET Cap Ute and Ind Prod
11/17 10:00 ET Business Inventories
11/17 1:00 pm ET Chief Goon Powell
11/18 8:30 ET Housing Starts
11/18 1:20 pm ET Goon Bullard
11/19 8:30 ET Jobless claims
11/19 8:30 ET Philly Fed

Key Economic Events Week of 11/9

11/9 1:30 pm ET Goon Mester
11/10 7:30 am ET Goon Kaplan
11/10 10:00 ET JOLTS job openings
11/10 10:00 ET Goon Rosengren
11/11 Veteran's Day. Bond market closed.
11/12 8:30 ET CPI
11/12 11:45 ET Chief Goon Powell
11/12 2:00 pm ET Federal budget
11/13 7:00 ET Goon Williams
11/13 8:30 ET PPI
11/13 8:30 ET Goon Bullard
11/13 10:00 ET Consumer sentiment

Key Economic Events Week of 11/2

11/2 9:45 ET Markit Manu PMI
11/2 10:00 ET ISM Manu PMI
11/2 10:00 ET Construction Spending
11/3 U.S. Election Day
11/4 November FOMC begins
11/4 8:30 ET ADP jobs report
11/4 8:30 ET US Trade Deficit
11/4 9:45 ET Markit Services PMI
11/4 10:00 ET ISM Services PMI
11/5 8:30 ET Productivity & Unit Labor Costs
11/5 2:00 ET FOMC Fedlines
11/5 2:30 ET Chief Goon Powell presser
11/6 8:30 ET BLSBS
11/6 10:00 ET Wholesale Inventories

Key Economic Events Week of 10/26

10/27 8:30 ET Durable Goods
10/27 10:00 ET Case-Shiller home prices
10/27 10:00 ET Consumer Confidence
10/27 10:00 ET Richmond Fed
10/28 8:30 ET Advance Trade in Goods
10/28 8:30 ET Wholesale Inventories
10/29 8:00 ET ECB monetary policy stmt
10/29 8:30 ET Q3 GDP first guess
10/30 8:30 ET Personal Income and Spending
10/30 8:30 ET Core Inflation
10/30 10:00 ET UMich Consmer Sentiment

Key Economic Events Week of 10/19

10/19 11:45 ET Goon Chlamydia
10/20 8:30 ET Housing Starts
10/20 1:00 pm ET Goon Evans
10/21 10:00 ET Goon Mester
10/21 2:00 pm ET Fed Beige Book
10/22 8:30 ET Initial Jobless Claims
10/23 9:45 ET Markit Oct flash PMIs

Key Economic Events Week of 10/12

10/13 8:30 ET CPI and Core CPI
10/14 8:30 ET PPI
10/14 9:00 ET Goon Chlamydia
10/15 8:30 ET Philly Fed
10/15 8:30 ET Empire State Idx
10/15 8:30 ET Import Price Idx
10/16 8:30 ET Retail Sales
10/16 9:15 ET Cap Ute & Ind Prod
10/16 10:00 ET Business Inv

Key Economic Events Week of 10/5

10/5 9:45 ET Markit Svc PMI
10/5 10:00 ET ISM Svc PMI
10/5 10:45 ET Goon Evans
10/6 8:30 ET Trade Deficit
10/6 10:00 ET JOLTS job openings
10/6 10:45 ET Chief Goon Powell
10/7 2:00 ET Sept FOMC minutes
10/7 3:00 ET Goon Williams
10/8 8:30 ET Initial jobless claims
10/9 10:00 ET Wholesale Inventories
10/9 12:10 ET Goon Rosengren

Key Economic Events Week of 9/28

9/29 8:30 ET Advance trade in goods
9/29 9:00 ET Case-Shiller home prices
9/29 10:00 ET Consumer Confidence
9/30 8:15 ET ADP employment report
9/30 9:45 ET Chicago PMI
10/1 8:30 ET Personal Income and Spending
10/1 8:30 ET Core Inflation
10/1 9:45 ET Markit Manu PMI
10/1 10:00 ET ISM Manu PMI
10/2 8:30 ET BLSBS
10/2 10:00 ET Factory Orders

Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
9/21 10:00 ET Goon Evans
9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

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