Dear CIGAs,
If I had to write a novel about the recent dollar rally I would suggest the following outline:
1. The Dark Side receives information of an impending increase in the Discount Rate.
2. The MOPE for year-end is the economic recovery
3. Since the Dark Side put on the Greek OTC derivative swap they have this proprietary knowledge.
4. The Dark Side turns on the Greeks in the media commentary.
5. The easily painted CDS OTC derivative market screams Greek debt failure.
6. The Dark Side downgrades Greek debt.
7. A sharp rally occurs in the euro that shocks the Dark Side as the euro climbs more than 100 points on an assumption Greece will be bailed out, which they will be.
8. The Dark Side having seen that euro rally bails out of their short euro position on the event of the Discount Rate being raised to 0.75%.
9. The Dark Side pockets 2.3 billion profit on their 9.9 billion dollar outrageously leveraged short euro position.
Jim Sinclair’s Commentary
The greatest in history and most complex economic crime is one in plain view. That crime is over the counter derivatives.
No new committee or crime squad is required in order to figure that out.
OTC derivatives have laundered more money than organized crime.
Announcing the Major Economic Crimes Bureau
Friday, February 19, 2010
Manhattan’s District Attorney Cyrus Vance Jr. has just announced the formation of a new office within the DA’s for fighting "complex economic crime" on Wall Street.
Translation, they will harass the politically unconnected and weak who dare to try and pull off the scams that are business as usual for Goldman Sachs and JPMorgan.
The Major Economic Crimes Bureau will be headed by former DOJ man Richard Weber.
Vance took office in January, replacing Robert Morgenthau. His father served as the United States Secretary of State under President Jimmy Carter from 1977 to 1980. Vance Sr. actually believed in negotiation over war. In April 1980, he resigned in protest of Operation Eagle Claw, the failed secret mission to rescue American hostages in Iran
Jim Sinclair’s Commentary
Are you interested in the real statistics and the real story?
Here they are. There are nowhere else. I am totally serious.
Commentary No. 280: January CPI, PPI, Housing Starts, Production
- Annual Inflation 2.6% (CPI-U), 3.3% (CPI-W), 9.8% (SGS)
- Quarterly Inflation Shifted from Fourth- to Second-Quarter 2009
- Economy Keeps Bottom-Bouncing as Intensified Contraction Nears
"No. 280: January CPI, PPI, Housing Starts, Production "
http://www.shadowstats.com/
Question To The CIGA Community:
Now that you have seen gold’s reaction to the IMF and the US Fed, how can you question the fact that gold is going to a minimum of $1650 and more than likely much higher?
Try please to remember this next time you push the panic button.
Jim Sinclair’s Commentary
1. No paper, absolutely none, will perform as a storehouse of value or buying power in these circumstances.
2. What makes you think the dollar’s debt to GDP is going to be healthy? It isn’t now and will not be.
Britain at risk of worse deficit crisis than Greece
Britain is at risk of a Government deficit crisis worse than that of Greece, sparking serious fears over the economic stability of the country.
Edmund Conway and James Kirkup
Published: 10:43PM GMT 18 Feb 2010
In surprise news which sent the pound sliding on Thursday, official figures showed that the Government borrowed £4.3 billion last month.
It was the first time since 1993 that the public finances had gone into the red in January – a month in which tax revenues usually push the Exchequer into the black.
Economists said that the scale of the shortfall in the budget could this year mount to above £180 billion – higher than even the Chancellor’s forecast of a record £178 billion.
Such a deficit would, at 12.8 per cent of British gross domestic product, be even greater than the deficit faced in Greece, which is facing a full-scale fiscal crisis and may need to be bailed out by fellow euro nations or the International Monetary Fund.
The public borrowing figures coincided with further bad news from the housing market, as the Council of Mortgage Lenders reported that mortgage lending dropped last month by 32 per cent, hitting the lowest monthly total in a decade.
The Bank of England also reported a decline in lending to businesses, indicating that the economic slowdown is far from over.
Thought For The Morning:
Remember what the Fed really does it does not advertise ahead of time.
What the Fed advertises ahead of time is usually MOPE.
Fed surprises with discount rate hike.
Feb. 18 (Bloomberg) — The Federal Reserve Board raised the discount rate charged to banks for direct loans by a quarter point to 0.75 percent and said the move will encourage financial institutions to rely more on money markets rather than the central bank for short-term liquidity needs.
“These changes are intended as a further normalization of the Federal Reserve’s lending facilities,” the central bank said today in a statement. “The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy.”
The dollar jumped as the Fed took another step in a gradual retreat from its unprecedented actions to halt the deepest financial crisis since the Great Depression. The Fed has provided hundreds of billions of dollars in backstop credit to banks, bond dealers, commercial paper borrowers and troubled financial institutions such as American International Group Inc.
