Dear CIGAs,
Friday March 12th. Observe how concerned I am about the sloppiness of gold.
Turn off the quote machine and put on a good flick. Be prepared for a major upwards move in the price of gold coming out of March into the year’s end.
Like it or not, this is a set up for a very exciting rest of 2010. Gold, as we know, can be painful from time to time. How much you want to suffer is totally up to you.
Think about handling the situation as I do. No suffering required.
Jim Sinclair’s Commentary
If major gold producers want reserves they are going to have to buy them.
SAfrica gold output down 18.2 pct yr/yr in Jan
Thu Mar 11, 2010 9:41am GMT
JOHANNESBURG, March 11 (Reuters) – South African gold output fell 18.2 percent in volume terms and total mineral production rose 7.7 percent in January compared with the same month in the previous year, official data showed on Thursday
Production of non-gold minerals rose 12.2 percent, Statistics South Africa said on its website www.statssa.gov.za (Reporting by James Macharia)
Jim Sinclair’s Commentary
Want to know what is really going on? Pay up and John will tell you. We have no financial connection of any kind whatsoever.
Retail Sales Revisions Boosted January Headline Gain but Reduced Reported Sales Levels
- Sales Still Bottom-Bouncing Net of Inflation
- January Trade Deficit Was GDP-Neutral
- Fleeting Census Jobs Creation Will Have Offsetting Losses
"No. 285: Outlook Update, Retail Sales, Trade Deficit"
http://www.shadowstats.com/
Jim Sinclair’s Commentary
And other African countries where the Mining Law is rational, fair and long term due to good government.
China on prowl to invest in South African mines
Published on: March 12, 2010 at 17:00
NEW YORK (Commodity Online): Like India’s steel giants, China is also showing interest in investing in South Africa’s mining sector.
According to the minister of mines in South Africa, China had shown strong interest in investing in the African nation’s mining sector.
China, Africa’s biggest emerging market partner, has been investing in the continent’s mining and energy sectors.
China is interested in manganese, platinum and uranium. But S Africa is also cautious to see if their investment is going to benefit South Africa. It is critical for the country to ensure its own interest.
The Chinese were keen to invest in processing of minerals in the country, a key priority of South Africa’s government, which hopes to extract as much value from its mines as possible and boost job creation.
Investor appetite for South Africa’s mining sector, one of the country’s major employers, was high, and the country was keen to attract just as many investors as in mining peers Australia and Canada.
Jim Sinclair’s Commentary
Just as any weak EU nation needing a bailout will get it, so will every state of the USA that implodes.
QE is going to infinity! California don’t worry, Washington will come. Maybe sooner if you were not, you know, with bad political company.
States may hold onto tax refunds for months
By William M. Welch, USA TODAY
Residents eager to get their state tax refunds may have a long wait this year: The recession has tied up cash and caused officials in half a dozen states to consider freezing refunds, in one case for as long as five months.
States from New York to Hawaii that have been hard-hit by the economic downturn say they have either delayed refunds or are considering doing so because of budget shortfalls.
"It’s an indicator of how bad it is," says Scott Pattison, executive director of the National Association of State Budget Officers. "You know things are bad when you have to do that."
New York, hit with a $9 billion deficit, may delay $500 million in refunds to keep the state from running out of cash, says Gov.David Paterson.
Hawaii’s Department of Taxation says some residents may not see state income tax refunds until the end of August, TheHonolulu Advertiser reported. It was part of a plan by Gov.Linda Lingle to deal with a revenue drop-off by pushing costs into the next fiscal period, which begins in July.
Jim Sinclair’s Commentary
To the sheeple, wake up! The Western world is imploding.
All currencies are in a race to the bottom. Gold is the only currency with no liabilities attached.
Half of Kansas City public schools to close
KANSAS CITY, Mo. — The Kansas City school board is closing nearly half of the district’s schools in a desperate bid to stay afloat.
The board’s 5-4 decision Wednesday night means 29 out of 61 schools will shut down at the end of the school year. The district is seeking to erase a projected $50 million budget shortfall.
Teachers at six other low-performing schools will have to reapply for their jobs, and the district will sell its downtown central office. The plan, proposed by Superintendent John Covington, also will eliminate about 700 of 3,000 jobs, including 285 teachers.
"The bottom line is the quality of education we’re offering children in Kansas City is not good enough," Covington said. "One reason it’s not good enough is that we’ve tried to spread our resources over far too many schools."
Covington’s move comes after decades of dropping enrollment but few efforts to reduce buildings or staff. Over the past 40 years, enrollment has dropped from more than 75,000 students to about 17,500.
Jim Sinclair’s Commentary
The only thing wrong with this picture is that the last word at the bottom of the sign should be plural.
Jim Sinclair’s Commentary
The why of the present rally in equities. The notes point to the FASB change in mark to market rules.
Jim Sinclair’s Commentary
Foreclosures help the home sales figures as the bank usually bids the balance of mortgages and taxes due at the foreclosure auction. It is a wash transaction.
New round of foreclosures threatens housing market
By Renae Merle
Washington Post Staff Writer
Friday, March 12, 2010
The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.
About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.
As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.
The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.
"Some of the positive housing data may not be signaling a true turning point, as many servicers are holding back on foreclosures and the related houses are not yet being offered for sale," said Diane Westerback, a managing director at Standard & Poor’s. Westerback said it could take 33 months to clear the backlog.
Jim Sinclair’s Commentary
The US dollar is no Safe Haven
U.S. credit rating at risk.
The triple-A credit rating of the U.S. is at risk, warned ratings agency S&P, unless the country creates a credible medium-term plan to rein in fiscal spending. If no action is taken, "external creditors could reduce their U.S. dollar holdings, especially if they conclude that eurozone members are adopting stronger macroeconomic policies." This could hurt the dollar’s status as a global reserve currency and consequently "weigh on the AAA rating on the U.S."
Jim Sinclair’s Commentary
The Chinese do not talk to hear their voice. China will retaliate in an economic way via their US Treasury holdings.
China tells U.S. to back off yuan appreciation calls.
Chinese officials warned the U.S. not to make a political issue out of the yuan, while the White House is trying to decide whether to label China as a "currency manipulator" and yesterday called on the country to move to a "more market-oriented exchange rate." China said the U.S. should look to itself to boost exports (see below) and not blame other countries.
Jim Sinclair’s Commentary
Please read this authoritative piece on China and gold.
China assesses its gold strategy
By Russell Hsiao
Chinese leaders convening in Beijing for the annual plenary session of the National People’s Congress (NPC) – China’s ceremonial legislature – this week will, among other things, hammer out a blueprint for the ascendancy of the country’s currency, the yuan (or renminbi).
China’s 2010 economic blueprint, which was officially unveiled at the plenary’s opening, set the country’s target growth rate at the proverbial 8%, which is the rate Chinese economists deem sufficient to generate enough domestic demand to make up for dwindling exports to regions such as the United States and Europe.
The 8% growth target has remained the same since 2004 and is also widely seen as politically necessary to create enough jobs to stave off social unrest. While the world’s largest economy – the United States – struggles to stem the bleeding of jobs in its ailing economy, its biggest creditor – China – has been quietly increasing its gold reserves in an apparent effort to hedge the weakening value of the US dollar and stabilize the value of its massive foreign exchange (forex) reserves.
Depending on the pace and scope of China’s forex reserves diversification strategy, this trend will have broad implications for the internationalization of the yuan and China’s US$2.27 trillion forex reserves, which are mostly parked in US Treasuries.
One of the key issues that Chinese leaders will have to tackle is whether to let the yuan rise to help restructure the domestic economy and rebalance the global economy. If they decide to allow the yuan to appreciate against the dollar and other currencies, gold may increasingly become an attractive alternative to include within the basket of China’s reserves.
Jim Sinclair’s Commentary
Rebuked by the US and mad as hell, the EU is moving forward to restrict credit default derivatives. CDSs will continue regardless.
EU pushing forward on hedge fund rules.
The U.K.’s Gordon Brown and France’s Nicolas Sarkozy will meet today to try to reach a compromise on proposed EU financial reforms. Specifically, the U.S. and U.K. are concerned that the tighter regulatory controls proposed could hurt the hedge fund and private equity industries.
Jim Sinclair’s Commentary
There will be no meaningful plan nor will there be a reduction in the US Federal Budget because of the internal rollover of states, commercial credit problems and misstatements on bank balance sheets, high unemployment, false balance sheet recovery and many other problems.
Those selling gold in anticipation of such are sorely mistaken.
S&P issues warning over America’s top-tier rating
By David Oakley in London and Michael Mackenzie in New,York
Published: March 12 2010 02:00 | Last updated: March 12 2010 02:00
The triple A rating of the US is at risk, S&P has warned, unless the country adopts a credible medium-term plan to rein in fiscal spending.
In a report published yesterday, the ratings agency said that there were risks that "external creditors could reduce their US dollar holdings, especially if they conclude that eurozone members are adopting stronger macroeconomic policies".
This could undermine the dollar’s status as the global reserve currency, it said, an outcome which would "weigh on the triple A rating on the US."
"In our opinion, fiscal outturns, inflation figures, trade volumes, foreign exchange volatility and the current account will be the leading indicators if the dollar’s role were to diminish," S&P said.
But the ratings agency said that the US could lose its reserve currency status and still hold on to its triple A rating. It added that the loss of a currency reserve status has historically been a gradual process, taking place over decades in the case of UK, for example.
Jim Sinclair’s Commentary
One early report this week and now three more. Maybe Friday is no longer sacred for reporting busted banks.
Bank Closing Information – March 12, 2010
These links contain useful information for the customers and vendors of these closed banks.
Statewide Bank, Covington, LA
Old Southern Bank, Orlando, FL
Park Avenue Bank, New York, NY
Jim Sinclair’s Commentary
Just like Greece, all the states of the USA that roll over will be bailed out.
States Facing Financial Doomsday as Debts Mount
By Dunstan Prial
FOXBusiness
That’s not some apocalyptic bumper sticker. It’s the learned opinion of numerous financial experts when describing the budget crises facing a number of U.S. states, notably Illinois, California and New Jersey.
“This is an unprecedented crisis,” said Laurence Msall, president of the Civic Federation, an influential Illinois-based tax and fiscal policy research group.
While a General Motors-style bankruptcy is off the table – states are prohibited by law from filing for protection from their debtors – the alternative is no less alarming.
Msall said that in a worst-case scenario, states sliding toward insolvency will simply stop paying their bills, whether they be to public colleges, private vendors or municipalities. And when they do, those entities will either have to eat the losses or make up the difference.
It’s already happening in Illinois, Msall said, where the state has reneged on payments promised to public colleges, and those colleges in turn have threatened 20% tuition increases.
Private vendors, as they did last year in California, will have to accept government vouchers – IOUs in effect – or lose their money, and municipalities will have to raise property taxes in order to cover their own expenses.
In other words, the money needed to keep insolvent states running at some minimum operational level will have to come from somewhere.
Jim Sinclair’s Commentary
There is no way out, and the only way to stall the inevitable is QE to Infinity.
Detroit family homes sell for just $10
Family homes in Detroit are selling for as little as $10 (£6) in the wake of America’s financial meltdown.
Published: 10:05AM GMT 12 Mar 2010
The once thriving industrial city has suffered a dramatic decline following the global economic crisis.
According to Tim Prophit, a real estate agent, the crisis has led to a unprecedented portfolio of homes, but they are failing to sell.
He said there were homes on the market for $100 (£61), but an offer of just $10 (£6) would be likely to be accepted.
Speaking on a BBC 2 documentary, Requiem for Detroit, to be screened on Saturday, Mr Prophit said: "The property is listed by the city of Detroit as being worth $35,000 (£22,000), but the bank know that is impossible to ask.
"This part of town has got a lot of bad press in the media because it featured in Eminem’s film ‘Eight Mile’, but that particular road is fifteen minutes up the road and that is a long way in Detroit."
Homes offered in viewing brochures as early 1920s example of colonial architecture would once have made handsome homes but are no longer sought after.
Mr Prophit, of The Bearing Group, said: "This house was foreclosed by the bank a couple of months ago and was offered to us to sell.
Jim Sinclair’s Commentary
QE to infinity. There is no other alternative.
New wave of foreclosures threatens market
Up to 7 million homes are potentially eligible but haven’t been repossessed
By Renae Merle
updated 3:52 a.m. MT, Fri., March. 12, 2010
WASHINGTON – The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize.
About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners.
And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can’t obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete.
As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market.
The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.
