Thursday, 3 March 2011

Preparing for QE 3.

Baltic Dry Index. 1281 +19

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

"The dollar will be wiped out."

Dr. Franz Pick

Once on quantitative easing it’s hard if not impossible to stop. Stopping brings on the very depression the policy was adopted in the first place to stop. Yesterday America’s top bankster appeared to confirm this sad fact. Below, helicopter Ben on the need for QE3. Stay long precious metals, we all know that this ends badly, we just don’t know when. It’s why insiders are selling out of stocks at unprecedented rates, and the bailed out banksters are all still busy looting the banks via outrageous bonuses. The googol bonuses are quickly converted from failing fiat currency into real estate, artworks, and tangible assets with intrinsic value.

"The fate of the nation and the fate of the currency are one and the same."

Dr. Franz Pick

Bernanke Doesn't Rule Out More Bond Buying to Aid Economy

By Scott Lanman and Joshua Zumbrun - Mar 2, 2011 4:39 PM GMT

Federal Reserve Chairman Ben S. Bernanke didn’t rule out expanding the central bank’s asset purchases aimed at stimulating the economy, saying he doesn’t want to see the economy relapse into recession.

Asked at a House Financial Services Committee hearing today what conditions would warrant a third round of so-called quantitative easing, Bernanke said that “what we’d like to see is a sustainable recovery. We don’t want to see the economy falling back into a double dip or to a stall-out.”

Bernanke’s testimony today and yesterday signaled that he will keep the Fed on course to complete $600 billion of Treasury purchases through June under the second round of quantitative easing, a policy criticized by Republican lawmakers as risking an inflation surge. He’s avoided saying what the central bank may do after that.

A third round of purchases “has to be a decision” of the Federal Open Market Committee, and “it depends again on our mandate” for stable prices and maximum employment, Bernanke said in response to Texas Representative Jeb Hensarling, the House panel’s vice chairman and a critic of QE2.


Next, today’s news from Libya courtesy of WikiLeaks. Abandon hope all ye who enter Libya. With thousands of guest works fled, the Libyan economy will collapse, with or without a civil war. A mass migration attempting to reach nearby Europe looks next, although corrupt Italy looks likely to fall with Gaddafi’s Libya. Sand anyone?

"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."

Daniel Webster

2 Qaddafis Fought Over Business, Cables Show

By JAMES RISEN Published: March 2, 2011

WASHINGTON — Soon after Coca-Cola decided to move into Libya in 2005, it received a harsh lesson in how the personal jealousies and brutality of the feuding family of Col. Muammar el-Qaddafi shape the nation’s economy.

Two of Colonel Qaddafi’s sons began to fight for control of the local Coca-Cola bottling company, and their battle turned into an armed confrontation dominated by a militia loyal to one of the sons, according to American diplomatic cables released by WikiLeaks. The dispute was settled when Colonel Qaddafi’s daughter intervened, but only after at least one worker was hurt, one Qaddafi cousin was stuffed into the trunk of a car and the Coca-Cola plant was shut down for months, the cables said.

The episode provides a rare, behind-the-scenes glimpse into the Qaddafis and more broadly underscores how the whims of ruling families have tainted the climate for economic development in parts of the Arab world.

In the 1990s, with Libya chafing under international sanctions, Coca-Cola did not have a bottling plant in the country. Instead, it was distributed through a franchise in neighboring Tunisia. It was only after Colonel Qaddafi abandoned his nuclear weapons program in 2003 and sanctions were relaxed by the West that American companies, including Coca-Cola, began to invest there again. Coca-Cola’s new bottling plant opened in 2005 through a local franchise known as the Global Beverage Company.

But almost immediately, two of Colonel Qaddafi’s sons, Mutassim and Mohammed, began to compete for control of Global Beverage. The feud burst into view in late 2005, just two weeks after the plant opened, when security troops loyal to Mutassim occupied the bottling plant in Tripoli, according to a 2006 State Department cable. His militia occupied the plant until February 2006, blocking production.

The State Department cable recounts how on Dec. 28, 2005, “Two military cars carrying armed personnel without clear identification illegally broke into the facility, asked the employees to leave the premises and shut down the plant.” Mutassim’s forces quickly took control of the plant after one foreign worker was injured and some equipment was destroyed.

During the plant’s occupation, managers were initially allowed to enter the plant “singly or in pairs,” but later Coca-Cola employees were barred completely. Over the following weeks, company shareholders received extortion demands from “freelancers” while anonymous callers threatened the plant’s foreign workers with “political problems” or physical harm, according to the cable.

“At no time did any Libyan authority offer a legal justification for the plant’s shutdown,” the cable said, recounting complaints from business officials involved.


We end for the day with a picture of America in economic decline. A picture is worth a thousand words so they say. Below America’s Federal income v Federal expenditure. Stay long precious metals. Would you base the world’s sole reserve currency system on such a base?


The Jasmine revolution seems likely to finally end up in Uncle Sam’s backyard. America’s human taxpayers pay out of their income 899 billion in income tax and another 865 billion in social insurance tax. America’s corporations pay only 191 billion in income tax. America’s serfs pay 81% of the Federal government’s income. America’s corporations pay just 9%. Meanwhile another 1.3 trillion was added to America’s debt to cover the income v expenditure shortfall. I think America’s serfs will rise up. Washington’s politicians are totally bought by the banksters and Squids. Stay long precious metals. Trillion dollar deficits will not go on forever.

At the Comex silver depositories Wednesday, final figures were: Registered 43.13 Moz, Eligible 60.40 Moz, Total 103.53 Moz.

Crooks and Scoundrels Corner.

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

Today, the latest scandal on Wall Street. At Ebenezer’s great academy for Vampire Squids with “blood funnels” and attitude, “God’s work” required instant implementation. Outside of government ministries, number 10, and the White House, when Goldie calls hang up.

"If the financial system goes down, our business is going down and, trust me, yours and everyone else's is going down, too."

Lloyd Blankfein. CEO Goldman Sachs. November 8, 2009

Guess How Many Seconds Rajat Gupta Waited Before Calling Raj After Blankfein Told Him Q4 2008 Earnings Were Bad

Mar. 1, 2011, 12:43 PM

After telephone calls with Lloyd Blankfein about Goldman's profits and Berkshire Hathaway's $5 billion investment, former Goldman Sachs board member Rajat Gupta, who was just charged with insider trading, didn't wait one minute before calling Raj Rajaratnam with the good -- and bad -- news.

You'd think that Gupta would have made some attempt to keep his alleged insider trading under wraps.


Example: On one call in 2008, Gupta got off the phone with the Board at 3:56 pm. He had just learned that Berkshire Hathaway would make a $5 billion investment in the bank, which would go public the next day.

He called Raj on the same line at 3:57 pm -- not even a full minute after learning of the enormous new stake.

Raj was able to place a trade before the close of markets that day.

And according to the SEC's complaint against Gupta, Gupta called Raj immediately after finding out material information about Goldman more than once.

After he disconnected from a call about sliding profits with Blankfein himself,, Gupta didn't wait more than 23 seconds before he telephoned Raj.
-----"Within a minute after this telephone conversation, at 3:56 p.m. and 3:57 p.m., and just minutes before the close of the markets, Rajaratnam caused the Galleon Tech funds to purchase more than 175,000 additional Goldman Sachs shares," according to the complaint.

"God, no, we don't club baby seals. We club babies."

Goldmanite, quoted in The Times of London. November 8 2009.

Early warning: on Saturday I’m off to Toronto for the Producers and Developers of Canada, international trade show and convention. These are the metals producers and prospectors of everything from familiar copper, to exotic rare earth elements. I can’t stay too long due to my mother’s hospitalization, the other family members will be covering while I’ away, but due to travel and meetings, and hopefully some cavorting, there won’t be a usual weekend blog update, nor an email LIR from next Monday until Thursday the 10th.

The monthly Coppock Indicators finished February:

DJIA: +156 Down 05. NASDAQ: +217 Down 11. SP500: +157 Down 4.

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