Wednesday, 5 January 2011

Dollar Constructive.

Baltic Dry Index. 1693 -80

LIR Gold Target by 2019: $30,000. Revised due to QE.

"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."

Antony C. Sutton

Happy days are here again, at least in America apparently, the economy is strengthening, well rebounding slightly again after a wobble in the middle of last year, tax breaks for banksters and hedge fund traders have been extended, and the Fed promises to continue on with QE2 no matter what happens in the US economy. For now the world has become “dollar constructive”. Stay long precious metals. If the US recovery really does become self sustaining, rather than mostly an illusion orchestrated by the Fed, prepare for a burst of inflation that will make the 1970s look like nothing more than a blip. Following on from the flooding in Pakistan earlier and now in Australia, plus drought in South America, 2011 already faces food inflation, cotton inflation, and sugar inflation. If America’s recovery is real and picks up self sustaining traction, next will come oil inflation as America’s extra demand kicks in to push the price of oil above $100 a barrel, although it will probably get there anyway as the Fed proceeds with QE2.

"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker

US Federal Reserve won’t back down on QEII despite strengthening economy

The US economy’s improvement in recent weeks has not weakened the conviction among senior officials at the Federal Reserve that a second dose of quantitative easing (QE) is needed, minutes of their latest meeting show.

By Richard Blackden 12:47AM GMT 05 Jan 2011

The decision by the Fed’s Open Market Committee (FOMC) to embark on a new, $600bn (£384bn) round of QE proved controversial even without the last two months’ evidence that the world’s largest economy is strengthening.

Minutes of December’s meeting of the FOMC, the body in charge of monetary policy, which were released yesterday, explain that “regarding their overall outlook for economic activity, participants generally agreed that, even with the positive news received over the inter-meeting period, the most likely outcome was a gradual pick-up in growth with slow progress towards maximum employment”.

There is little doubt that the economy has stabilised after weakening in the second quarter of last year, with both consumer spending and manufacturing rebounding. The last-minute deal struck in December by Congress and the White House to extend tax cuts first made by President George W. Bush has, for now at least, banished the speculation of double-dip recession that dominated the summer.

Should the US recovery continue to gain traction this year, Fed chairman Ben Bernanke can expect to face pressure from colleagues on the FOMC as well as external critics to end QE early. Charles Plosser, the President of the Federal Reserve Bank of Philadelphia, last month said that the bank will need to reassess quickly if the recovery improves.

As America “booms”, Europe teeters. Tiny Portugal tests the bond market today though the amount is relatively small and should present no problem to the EU’s new paymaster, the Chinese banks. Technically China has only said that they will buy some of Spain’s debt, but Portugal is right next door and shares the same weather so what’s the difference?

Portugal First to Test 2011 Demand With Bill Sale: Euro Credit

By Joao Lima and Anabela Reis - Jan 5, 2011 12:01 AM GMT

Portugal will sell six-month bills today, the first of Europe’s high-deficit nations to test investor demand in 2011 after the threat of default forced Greece and Ireland to seek bailouts last year.

---- The government debt agency, known as IGCP, plans to auction 500 million euros ($665 million) of bills repayable in July. Portugal sold six-month bills on Sept. 1 at an average yield of 2.045 percent, with investors bidding for 2.4 times the amount of securities offered. A year ago, the country paid just 0.592 percent to borrow for six months.

Portugal, which intends to sell as much as 20 billion euros in bonds to finance the budget and finance redemptions this year, is raising taxes and cutting wages as it tries to convince investors it can narrow its budget gap after the Greek debt crisis led to a surge in borrowing costs for indebted euro nations last year.

Euro Falls a Third Day on Concern Governments Will Struggle to Raise Funds

By Lucy Meakin and Ron Harui - Jan 5, 2011 8:35 AM GMT

The euro fell for a third day against the dollar amid concern that Europe’s debt crisis will persist, making it difficult for governments to raise funds.

The 17-nation currency dropped for a second day versus the yen before Portugal sells six-month bills today. The dollar traded near a one-week high against the yen before a report that may show U.S. services industries grew at the fastest pace in 4 1/2 years, adding to evidence that the world’s largest economy is strengthening.

“The debt concerns are something that will come back repeatedly and periodically through the course of the year,” said Adam Cole, head of global currency strategy at RBC Capital Markets in London. “It will be a recurring theme for the euro. The market does still show some sensitivity to supply and the appetite for supply.”

----- Europe’s currency has extended last year’s 6.5 percent decline as concern about the sovereign-debt crisis dogs the region. Switzerland’s central bank won’t take Irish government bonds due to be repaid between 2011 and 2025 as collateral, the Irish Independent reported today, citing data from the bank.

---- Poland may sell as much as 6.5 billion zloty ($2.2 billion) of January 2013 and April 2016 bonds, according to the Finance Ministry. The two-year yield is likely to be at least 4.9 percent, the highest level since an auction in February, and the five-year debt will yield at least 5.6 percent, the most since December 2009, according to analysts at PKO Bank Polski SA, ING Bank Slaski SA and Bank Handlowy SA, and data compiled by Bloomberg.

“We’ve got concerns about Europe,” Patrick Perret-Green, Singapore-based head of Asian currency strategy at Citigroup Inc., said in a Bloomberg Television interview. “Everyone knows about the huge amount of refunding and public financing issuance that’s got to go on in Europe this year. We’re still fairly dollar constructive.”

Speaking of China, how’s this for a weather forecast? How much coal lasts for “a while”.

Cold Spell in South China to Continue `a While,' Transport Ministry Says

By Bloomberg News - Jan 5, 2011 1:58 AM GMT

A cold spell that swept China’s Guizhou and Hunan provinces will continue “for a while,” according to the transport ministry.

Sleet is expected Jan. 7 in southern Guizhou province and surrounding areas, making it “very tough” to keep roads open, the ministry said today in a statement on its website.

Freezing temperatures in southern China this week have made roads impassable and stranded motorists, the transport regulator said, without giving additional details.

Traffic was “basically” restored in the affected areas as of yesterday morning, according to the statement.

I doubt that America’s recovery is real, nor that the Fed can ever end Quantitative Easing except for brief test periods. What happened in Latin America in the 60s, is now about to happen in America, except it will all play this year and next on an epic scale. America’s collapsing real estate problem hasn’t gone away, and is now about to take another down leg impairing the big all but insolvent giant banks. All the trash “triple-A” securities now parked on the Fed’s balance sheet can never be put back to the giant 4 banks. Nearly insolvent, the banks can’t lend to anyone, they can only take the Fed’s cash and front run the Fed’s QE2 program or speculate via high frequency trading programs in over bought US stocks. America’s deeply overstretched consumers are about to get even more challenged by rising food and fuel prices, they are unlikely to set off a new housing boom. As the Fed keeps creating new dollars out of thin air, OPEC is likely to keep adjusting oil prices higher. In Europe, massive austerity is the order of the day, until social disorder forces a u-turn or brings down governments. Despite a rosy start, 2011 I suspect is going to be a year of extremes.

Though the BDI is possibly reflecting a shipping problem at the coal ports of Australia, a force majeure in copper in Chile, and a slowdown ahead of the Chinese new year, at 1693 it is also signalling an alarming slowdown in world trade. We are a long way down from last May’s 4200.

Why did I take up stealing? To live better, to own things I couldn't afford, to acquire this good taste that you now enjoy and which I should be very reluctant to give up.

Cary Grant. To Catch A Thief.

At the Comex silver depositories Tuesday, final figures were: Registered 45.71 Moz, Eligible 59.87 Moz, Total 105.58 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Today, good reason to think that US real estate is about to commence another down leg. And now the use of the RICO Act has come into play. With MERS clouding the title to millions of properties across America, I suspect that MERS itself will soon be on the wrong end of a RICO suit. And who set up and owns MERS, the great big nearly insolvent banks. As too big to fail cronies of the Fed, any winning suit presumably gets paid off by the Fed. Though the UK and Europe still lead America in the race to Reykjavik status, it looks like the US is about to jump into the lead again as Q1 11 develops.

"We shouldn't pour cold water on everything. We, the eight or nine players in global investment banking, have a very good future."

Deutsche Bank, CEO Josef Ackermann. Davos, January 2007.

Florida Attorney General Fraudclosure Report

Submitted by 4closureFraud on 01/04/2011 15:39 -0500

The Fall of Florida’s ‘Foreclosure King’ Will Create Huge Waves

Posted by Foreclosure Fraud on January 4, 2011

KABOOM | A Lawsuit That Dirty Debt Collectors Should Be Worried About

Posted by Foreclosure Fraud on January 4, 2011

Oh, well don't get technical at a time like this.

Cary Grant. His Girl Friday 1940

The monthly Coppock Indicators finished December:

DJIA: +171 Down 7. NASDAQ: +238 Down 9. SP500: +165 Down 2.

The bull market (or bear market rally) that commenced on Nasdaq on 30/4/09 at 1717 has ended. (30/5/09 SP 500 at 919, 30/5/09 DJIA 8500.) While the indicators can flip flop at market turns, this action is rare on the slow monthly indicators. December is the seventh down month, but the downward momentum has virtually stopped. I would put on (purchased) synthetic double options here for a breakout in either direction. Professional traders would adopt much more risky granted option strategies.

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