Dear CIGAs,
This article says it all.
If you read this extremely well written and easily understood piece you will see the inherent message.
Form will not overcome substance. MOPE will fall to economic law in 2010.
The means do not justify the ends especially when the ends are an illusion in the first place.
I see my mission as one to protect you from the increasing weak economic structure insured by the rescue of financial firms (privileged paper shufflers) temporarily at the cost of real business that creates something tangible for society.
This is the reason that I label the 2009 dollar rally as a pimple on the ass of an elephant, a sucker’s rally created by luncheon agreements on the carry trade (unknowable as to volume) concluded by hedge fund managers.
Prepare for a Keynesian Hangover
Our government’s spending orgy will haunt us in 2010.
DECEMBER 28, 2009, 8:49 P.M. ET
By BENN STEIL
In 2008, as the U.S. economy teetered under the weight of years of reckless credit expansion, the Bush administration decided against proposals to sweep out the bad debts from the banking system and then fix the regulatory structure—an approach based on tried and tested models from the S&L crisis and other financial crises.
We will pay the price for this decision in 2010. That’s because the Obama administration and the Federal Reserve are plowing forward with Plan B: Nationalize credit creation and "stimulate" the private sector by spending in its stead.
Richard Nixon’s famous line, "We’re all Keynesians now" never seemed more apropos. With the budget deficit at an eye-popping $1.4 trillion, and on track to stay above $1 trillion indefinitely, Berkeley economist Brad DeLong writes breezily in his Nov. 30 blog that "anything that boosts the government’s deficit over the next two years passes the benefit-cost test—anything at all."
On the monetary side, the fireworks have been even more spectacular. Since the financial crisis of late 2008, the Fed has flooded the globe with newly conjured dollars in an unprecedented no-holds-barred effort to prod private credit expansion. Watching the booms in the markets for distressed debt, junk-rated corporate bonds and poor-country sovereign bonds since the summer, one might be forgiven for concluding that the Fed had succeeded well beyond its expectations, and that the market’s flight to safety had given way to a flight to Vegas. Yet "the truth is that policy should be piling on," Princeton economist and New York Times columnist Paul Krugman writes in his Nov. 25 blog, "not looking for the exit."
Jim Sinclair’s Commentary
This is preparation for the newest military action to support the Saudis.
We simply cannot afford to do this financially even though the argument for it is that we cannot afford not to do it.
Threats shut Yemen’s U.S., U.K. embassies
Closures come as Washington, London step up aid to fight al-Qaida affiliate
SAN’A, Yemen – The U.S. and Britain closed their embassies in Yemen on Sunday in the face of al-Qaida threats, after both countries announced an increase in aid to the government to fight the terror group linked to the failed attempt to bomb a U.S. airliner on Christmas.
The confrontation with al-Qaida’s offshoot in Yemen has gained new urgency since the 23-year-old Nigerian accused in the attack, Umar Farouk Abdulmutallab, told American investigators he received training and instructions from the group’s operatives in Yemen. President Barack Obama said Saturday that the al-Qaida offshoot was behind the attempt.
The White House counterterrorism chief John Brennan said the American Embassy, which was attacked twice in 2008, was shut Sunday because of an "active" al-Qaida threat. A statement on the embassy’s Web site announcing the closure cited "ongoing threats" from the terror group and did not say how long it would remain closed.
In London, Britain’s Foreign Office said its embassy was closed for security reasons. It said officials would decide later whether to reopen it on Monday.
The closure comes as Washington is dramatically stepping up aid to Yemen to fight al-Qaida, which has built up strongholds in remote parts of the impoverished, mountainous nation where government control outside the capital is weak.
Jim Sinclair’s Commentary
This strategy is the reverse of what Volcker did that resulted in the collapse the USSR.
Crank up the cold war big time in order to totally bust the West’s economy and currency, specifically the USA which is already the walking wounded economically.
Daddy Warbucks loves it.
Some, mistakenly, will see it as good in order to stimulate the economy. The only problem is all this type of spending does is stimulates Daddy Warbucks’ treasury which is heavily weighted in Gold.
Vladimir Putin calls for more weapons to stop America doing ‘whatever it wants’
December 30, 2009
Russia needs more weapons to punch through America’s new missile defence shield, Vladimir Putin said yesterday in blunt remarks that will complicate efforts to cut the nuclear arsenals of the former Cold War rivals.
The Russian Prime Minister, reasserting himself as the country’s real ruler, said that Moscow should press ahead with a new generation of weapons to stop the Americans doing “whatever they want”.
“To preserve the balance we must develop offensive weapons systems, not missile defence systems as the United States is doing,” he said during a visit to the naval port of Vladivostok on the Pacific coast.
Until now, it had seemed that Washington and Moscow were edging towards a successor to the 1991 Strategic Arms Reduction Treaty (Start), despite failing to meet the original target of December 5.
Asked why the talks had failed to reach agreement on a new deal, Mr Putin said: “What is the problem? The problem is that our American partners are building an anti-missile shield and we are not building one.”
The Prime Minister was believed to be voicing the deeply held views of hardliners in the Russian military machine, but his forthright statement may also be linked to growing signs that he is preparing to announce his intention to seek a new presidential term in 2012.
Jim Sinclair’s Commentary
In the War Against Terror, a singular unidentifiable or unified entity, the front is everywhere and the end is nowhere.
That is not an opinion, it is a fact.
Detroit terror attack: Britain sends counter-terrorist forces to Yemen
Britain has dispatched a special counter-terrorist unit to Yemen as the mountainous Arab state emerges as the new frontline in the war against al-Qaeda, The Sunday Telegraph has learnt.
By Sean Rayment, Defence Correspondent, Adrian Blomfield and Richard Spencer in Sana’a and Philip Sherwell in New York
Published: 7:00AM GMT 03 Jan 2010
The force is training Yemeni military and will assist in planning operations against al-Qaeda in the Arabian Peninsula, the group which claimed responsibility for the Christmas Day attack on a US airliner.
The disclosure comes as Western security analysts warn that the failed underwear bomb plot will serve as a test run for future overseas attacks by an increasingly sophisticated outfit still honing its terror techniques.
"The bomber was inexperienced, dispensable and an unknown quantity," said a senior diplomat in Sana’a. "They would only have given him a 50-50 chance of succeeding. It was a proof of concept mission."
As concerns grow about Yemen’s role as a hotbed for extremists, Gordon Brown will this month host a crisis meeting to seek ways to prevent the country becoming a failed state stronghold for al-Qaeda. The US on Friday doubled its security assistance to Sana’a to $140 million this year in an effort to combat the spread of extremists in the ancestral homeland of Osama bin Laden.
The country’s status as a terror breeding ground is under fresh scrutiny following the failed attempt by Umar Farouk Abdulmutallab to blow up a plane over Detroit on Dec 25 with explosives hidden in his underwear after he was trained and equipped by al-Qaeda in Yemen.
Jim Sinclair’s Commentary
This is a person who apparently was not invited to speak at the yearend economic and dollar pep rally on F-TV.
"This year, "on a conservative basis, you’re going to have two, three, four times" last year’s total of bank seizures, said Charles Wendel, founder of Financial Institutions Consulting Inc., of Ridgefield, Conn."
Fifteen local banks under regulatory scrutiny for problems
By Harold Brubaker
Inquirer Staff Writer
The Philadelphia region escaped last year with no bank failures, but that does not mean federal bank regulators are failing to scrutinize local institutions.
At the end of the year, 15 of 101 banks based here were operating under regulatory agreements to address weaknesses in loans and other areas, such as staffing.
Three of the banks with agreements – Harleysville National Bank & Trust Co., First Keystone, and the First National Bank of Chester County – are being sold. Another, ISN Bank, had a deal that failed to win regulatory approval.
Experts characterized the Federal Deposit Insurance Corp.’s closure of 140 banks across the country last year as a warm-up for the agency, whose board last month authorized a 55 percent increase in the FDIC budget and a 23 percent increase in staffing to 8,653.
This year, "on a conservative basis, you’re going to have two, three, four times" last year’s total of bank seizures, said Charles Wendel, founder of Financial Institutions Consulting Inc., of Ridgefield, Conn.
Jim Sinclair’s Commentary
High Stakes Poker for all evolved.
Iran Gives West One Month to Accept Nuclear Deal
Edward Yeranian | Cairo 02 January 2010
Iran warned on Saturday the West has until the end of the month to accept Tehran’s counterproposal to a U.N.-drafted plan on a nuclear exchange, or they will start producing nuclear fuel on their own.
The warning from Foreign Minister Manouchehr Mottaki showed a hardening in Iran’s stance over its controversial nuclear program. While the West fears it shows Iran has nuclear ambitions, Tehran insists the program is only for peaceful, electricity production purposes.
The Iranian foreign minister’s message was broadcast on Iranian TV.
He says that Iran gave [the West] an ultimatum, and they have one month left, giving them to the end of January [to accept]. He adds that [the West] must choose between one of the two proposals [that Iran has made], which is either to purchase uranium [directly from France or Russia] or to swap it [on Iranian soil]. Otherwise, he insists that Iran will go ahead and produce [high grade] enriched uranium fuel using its own talented experts.
Western powers, including the United States, have called on Tehran, under the draft U.N. nuclear deal worked out last November, to ship around 70 percent of its low-grade uranium abroad. That fuel would then be transformed into more highly enriched (20 percent grade) uranium and shipped back to Iran.
