Forest Jones at Moneynews reports that China is ready to shed risky dollar-denominated assets from foreign reserves. That would mean that assets like corporate debt as well as municipal and state bonds would be jettisoned, while keeping U.S. Treasuries or agency mortgage debt such as Freddie Mac that have Washington’s backing.
That doesn’t bode well for states looking to rollover debt and issue more.
In today’s short video Adam Hewison examines the crash of 1929 and the similarities to today’s Dow. This video is not meant to scare anyone, but to educate investors and traders of the possibilities that may exist in today’s market.
We could be, repeat, could be very close to a tipping point similar to that of 1930 when the Dow had ended a 50% correction to the upside. I invite you to watch my latest video and see what makes sense to you.
As always our videos are free to watch and there are no registration requirements. If you agree or disagree with this video please feel free to comment on our blog.
Every success,
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Mike Landfair
Chris Powell, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. (GATA), spoke on Nov. 7, 2009 at the International Precious Metals and Commodities Show that Gold suppression is public policy…. In the speech he quoted Jim Rickards, director of market intelligence for the Omnis consulting firm in McLean, Virginia.
Rickards remarked: “When you own gold you’re fighting every central bank in the world.”
That’s because gold is a currency that competes with government currencies and has a powerful influence on interest rates and the price of government bonds. And that’s why central banks long have tried to suppress the price of gold. Gold is the ticket out of the central banking system, the escape from coercive central bank and government power.
As an independent currency, a currency to which investors can resort when they are dissatisfied with government currencies, gold carries the enormous power to discipline governments, to call them to account for their inflation of the money supply and to warn the world against it. Because gold is the vehicle of escape from the central bank system, the manipulation of the gold market is the manipulation that makes possible all other market manipulation by government.
That interview took place on Friday, September 25, on the cable television network CNBC in the United States. The major news media are not allowed by management to interview GATA officials.
Gold suppression was acknowledged by Fed Chairman Greenspan in 1998, when he said, “Central banks stand ready to lease gold in increasing quantities should the price rise.” Chris Powell singles out JPMorganChase as as the Fed’s de-facto subsidiary in the scheme. It was JPMorganChase that got the sweetheart deal taking over Bear Stearns.
Maybe the Federal Reserve’s intervention to rescue Bear Stearns through the Fed’s de-facto subsidiary, JPMorganChase, will cause some devastating public inquiries by Congress and the news media. But what a hundred years ago in the United States was called the Money Power is so ascendant today that it sometimes even boasts of its privilege. What other agency of a democratic government could get away with the principle that was articulated on national television in the United States in 1994 by the vice chairman of the Federal Reserve, Alan Blinder? Blinder declared: “The last duty of a central banker is to tell the public the truth.”
So it is with great concern that I noticed that JPMorganChase has a prominent position in the bankruptcy of Citadel Broadcasting Corp., the nation’s third-largest radio broadcasting company.
David Pitt writes in a MYWAY article on the chapter 11 filing,
Under terms of its bankruptcy reorganization, the company said its $2.1 billion in secured credit will be converted to a new term loan of just $762.5 million. Those secured creditors, led by JPMorgan Chase Bank, will get a share of the new loan and control of 90 percent of the new common stock in the reorganized company.
JPMorgan Chase holds the two largest secured claims, including a $2.08 billion senior secured credit facility and $970 million that it is owed as part of an interest rate swap, bankruptcy documents show. JPMorgan Chase also has been part of lending groups that have gained control of troubled newspaper publishers Journal Register Co. and Freedom Communications following their Chapter 11 filings earlier this year. It is a major secured creditor in the bankruptcy reorganization of Los Angeles Times publisher Tribune Co. as well.
There are so many things wrong with allowing the Fed’s banker this much power. They not only control our money and its value, but have acquired the means to suppress the truth about their operation.
Chris Powell concludes in part,
Indeed, since central bank intervention in the currency, bond, equities, and commodity markets has exploded over the last year, we don’t really know what the market price of anything is anymore. Thus the gold price suppression story is a story about the valuation of all capital and labor in the world — and whether those values will be set openly in free markets, the democratic way, or secretly by governments, the totalitarian way.
It’s a story that needs to be broadcast from the highest mountains, but if “they” control the press who’s going to tell it?
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Mike Landfair
Here’s an excellent interview with best-selling economics author Niall Ferguson conducted by Consuelo Mack:
When completed, the Freedom Tower will be among the tallest buildings in the world and the tallest in the United States.
I received my copy of the Labor Press and was disheartened to read that the contract for blast resistant glass for the first 20 stories has been awarded to a Chinese company. The Labor Press states that since 2001 when China joined the WTO, due to $30 billion of Chinese subsidies to their glass industry the U.S. has lost 1/3 of its glass manufacturing workforce.
I hate to see this monument built with anything but American products, but that’s the world we live in today. We are in an economic war and American workers are the losers.
So says Ambrose Evans-Pritchard in the UK Telegraph.
“The debt situation is irrecoverable,” said Carl Weinberg from High Frequency Economics. “I don’t see any orderly way out of this. They will not be able to fund their deficit. There will be a fiscal shutdown, a pension haircut, and bank failures that will rock the world. It is criminally negligent that rating agencies are not blowing the whistle on this.”
Got Gold?
According to David Goetsch writing at The Patriot Update, Michael Moore Is a “Big Fat Capitalist Pig”
He poses a few questions that Moore somehow overlooked when making this movie:
It’s Not Real Money – Is it? is seeing signs that another banking crisis like the one that hit in September, 2008 could be near.
Commercial mortgage defaults are now outpacing the sub-prime defaults that triggered the first event. Option ARM defaults are also eclipsing sub-prime defaults as are 5/1 Interest Only ARMS.
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Mike Landfair
September 15, 2009 marks the first anniversary of the fall of Lehman Brothers and the global financial meltdown. The DJIA closed on Friday the 12th at 11, 421.99. Over the next three days it would shed almost 1,000 points. Breaking the July 15th low of 10,827, set the stage for a six-month plunge to the March 2009 lows of 6.500. We’ve enjoyed a great rally, up 3,000 points. What happens next?
It appears that the economy is bottoming as we get ready for back to school. A lot of money has been spent on bailouts and stimulus programs. The CBO estimates our national debt over the next ten years will increase by $9 Billion. I have doubts that the Treasury will find it easy to raise the money needed in the world without interest rates going up. That means the Federal Reserve will continue purchasing Treasuries, monetizing the debt, and that’s inflationary. On the other hand the FED will also find it tough to soak up the excess liquidity which will make bubbles anew, without raising interest rates too soon. Consequently, I don’t see a robust recovery.
If the new phrase for 2009-2010 is Frugality, I would expect to see consumers pay down debt and save. It’s hard to refloat a consumer dominated economy, when the shopper can’t qualify for a loan or doesn’t want to borrow to buy a new TV or sofa.
Perhaps John Mauldin and GaveKal are right that the Keynesian way of stimulating an economy is passe. They suggest an emphasis on the classical economists is the new way:
…corporate profitability is the cause, not the consequence, of economic growth. Thus, Schumpeter would see the current cycle as the destruction phase in the creative-destruction processes that propel the economic cycle. Capital and labor are currently moving from the sectors in decline (e.g., McMansions) to the sectors in expansion (e.g., tech, alternative-energy infrastructure, etc.). Once momentum in the growth sectors overwhelm the decaying ones, then macro growth resumes.
Wouldn’t it be like Nixon Going To China to have the leftist Obama see his political chances improve by embracing Capitalism. I suggest that many who expected a miracle will not be happy with him in 2010 if unemployment is high and inflation is soaring and the government continues to apply the medicine that got us into trouble. More of the same will just bring us more of the same.
I think monetarily there is a real risk in the US Dollar in 2010. It is not in the government’s interest to see Gold and Silver go up in price. It appears that our government has capped Gold under $1,000 and yet as Professor Antal E. Fekete has written, the 30-year trend of diminishing basis in gold and gold futures is approaching backwardation. We are very close! If that happens no amount of money will buy an ounce of gold and the USD will essentially be worthless.
Is there one thing I watch to get an idea of what’s going to happen next. You know, I watch everything I can. I try to understand some of the arcane, the economic, the political, the culture, I talk to people and I listen, I ask questions. Much of any conclusion can be easily upset, by another terrorist attack, an expanding war in the middle east or a Black Swan. To attempt to predict the future is more an acknowledgement of what we don’t know and as Donald Rumsfeld would continue, “What we don’t know that we don’t know.”
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Mike Landfair
Regulators have shut down two banks in Florida and one in Oregon, bringing the number of federally insured banks to fail this year to 72. In Oregon, the FDIC closed the Community First Bank, of Prineville, Ore., with $209 million in assets and $182 million in deposits.
The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $45 million.
