"It is the common fate of the indolent to see their rights become prey to the active. The conditions upon which God hath given liberty to man is eternal vigilance; which condition if he break, servitude is at once the consequence of his crime, and the punishment of
his guilt."
–John Philpot Curran – (1750-1814) Irish Orator, Statesman, Judge – Date: July 10, 1790 – Source: Speech, Dublin, July 10, 1790
Jim Sinclair’s Commentary
How to relax after a long day in Gold and Forex, narrated by www.DrVino.com.
Jim Sinclair’s Commentary
If you feel comfortable being in the US dollar you would feel comfortable in Chernobyl.
The virtual reserve currency to come cannot survive as a huge index of world fiat paper unless it is tied to gold in the manner I have reviewed with you many times.
The virtual world currency reserve will be tied to gold, not as a convertible, but in a ratio of value to the level international liquidity after the storm.
UN calls for scraping dollar
Wed, 30 Jun 2010 00:40:31 GMT
A UN report released on Tuesday calls for abandoning the US dollar as the main global reserve currency to achieve greater stability in the world financial system.
"The dollar has proved not to be a stable store of value, which is a requisite for a stable reserve currency," said the World Economic and Social Survey 2010.
The use of the dollar for international trade came under increasing scrutiny when the US economy fell into recession.
The report said a new global reserve system should be created, which "must not be based on a single currency or even multiple national currencies." Instead, the report advocates using assistance from the International Monetary Fund to create a standardized international system for liquidity transfer.
The report added that developing countries have been hit hard by the US dollar’s loss of value in recent years.
"Motivated in part by needs for self-insurance against volatility in commodity markets and capital flows, many developing countries accumulated vast amounts of such (US dollar) reserves during the 2000s," it said.
Jim Sinclair’s Commentary
This is precious. Evans-Pritchard goes wild on the Fed.
It is timely to read as Markets Today Made Important Statements.
Time to shut down the US Federal Reserve?
By Ambrose Evans-Pritchard
Last updated: June 29th, 2010
Like a mad aunt, the Fed is slowly losing its marbles.
Kartik Athreya, senior economist for the Richmond Fed, has written a paper condemning economic bloggers as chronically stupid and a threat to public order.
Matters of economic policy should be reserved to a priesthood with the correct post-doctoral credentials, which would of course have excluded David Hume, Adam Smith, and arguably John Maynard Keynes (a mathematics graduate, with a tripos foray in moral sciences).
“Writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy.”
Don’t you just love that throw-away line “decent”? Dr Athreya hails from the University of Iowa.
“The response of the untrained to the crisis has been startling. The real issue is that there is an extremely low likelihood that the speculations of the untrained, on a topic almost pathologically riddled by dynamic considerations and feedback effects, will offer anything new. Moreover, there is a substantial likelihood that it will instead offer something incoherent or misleading.”
Jim Sinclair’s Commentary
QE to infinity will be practiced by the entire Western world.
G-20 to world: Spend more, save more
June 28, 2010, 4:08 p.m. EDT
By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) — The global economy is still sickly, the Group of 20 nations said over the weekend, but they couldn’t agree on the best medicine.
As expected, the leaders of the 20 economies meeting in Toronto promised they’d do more to stimulate the economy and create jobs, but at the same time they vowed to do less.
"Strengthening the recovery is key," the G-20 stated, because "the recovery is uneven and fragile, unemployment in many countries remains at unacceptable levels, and the social impact of the crisis is still widely felt."
"To sustain recovery," the leaders promised, "we need to follow through on delivering existing stimulus plans, while working to create the conditions for robust private demand."
But in the very next breath, they took it back. "Recent events highlight the importance of sustainable public finances and the need for our countries to put in place credible, properly phased and growth-friendly plans to deliver fiscal sustainability, differentiated for and tailored to national circumstances."
Jim Sinclair’s Commentary
You heard this first from CIGA Pedro.
You know what it means more than the garbage below.
NY Fed measures systemic risk of BP collapse.
The Federal Reserve Bank of New York has reportedly been examining major financial firms’ exposure to BP (BP) to ensure that Wall Street and the global financial system won’t be at risk in the event the oil giant buckles under the costs of the Gulf spill. Sources said the Fed found no systemic risk, and didn’t ask banks to alter their credit relationships with BP. However, some banks, of their own initiatives, are changing the terms of their business with BP. Credit Suisse (CS) has reportedly lowered its collateral requirement threshold to $10M from $30M, while Bank of America (BAC) has shortened the time frame of oil trades with BP to one year.
Jim Sinclair’s Commentary
This smoke and mirrors recovery will be seen not as a U, W or V, but rather as a ski jump.
The little up was not a bottom, but a cliff over which world economies are now going down together.
Japan’s recovery may be slowing.
Japan’s industrial production slipped in May, as did household spending, and the unemployment rate unexpectedly increased. The data points suggest Japan’s economic recovery is slowing down, and may serve as a warning to politicians that it’s too soon to tighten fiscal policy in favor of deficit reduction.
Jim Sinclair’s Commentary
What a waste of time regulations are.
Volcker Rule May Give Goldman, Citigroup Until 2022 to Comply
By Bradley Keoun – Jun 29, 2010
Goldman Sachs Group Inc. and Citigroup Inc. are among U.S. banks that may have as long as a dozen years to cut stakes in in-house hedge funds and private- equity units under a regulatory revamp agreed to last week.
Rules curbing banks’ investments in their own funds would take effect 15 months to two years after a law is passed, according to the bill. Banks would have two years to comply, with the potential for three one-year extensions after that. They could seek another five years for “illiquid” funds such as private equity or real estate, said Lawrence Kaplan, an attorney at Paul, Hastings, Janofsky & Walker LLP in Washington.
Giving banks until 2022 to fully implement the so-called Volcker rule is an accommodation for Wall Street in what President Barack Obama called the toughest financial reforms since the 1930s. The Glass-Steagall Act of 1933 forced commercial banks such as what is now JPMorgan Chase & Co. to shed their investment-banking units in less than two years.
“One of the big concerns for the banks was how to unwind these funds,” Kaplan said. “This takes a lot of that argument away by giving them as much as 12 years to do so.”
The proposal, named for former Federal Reserve Chairman and current Obama adviser Paul Volcker, 82, seeks to avoid future bailouts by curbing risk-taking and initially aimed to ban banks from investing in hedge funds and private equity. It was “watered down” in final negotiations last week, allowing lenders to invest as much as 3 percent of their capital in the funds, Deutsche Bank analysts Matt O’Connor and Michael Carrier wrote in a note to clients last week.
Jim Sinclair’s Commentary
"Rome, here we come"
–CIGA Green Hornet
US Must Cut Public Sector or Fall Like Rome: Zell
Published: Tuesday, 29 Jun 2010 | 10:03 AM ET
By: Antonia Oprita
The US public sector is so big that the economy cannot support it and needs to be cut back, Sam Zell, chairman of Equity Group Investments, told CNBC Tuesday.
Health care and salaries provided for some public employees are "unrealistic" and at the moment are probably double what they are in the private sector, Zell said in an interview.
"The old game was very simple. If you worked for the government, you had job security, you got less but you got a longer pension," he said. But over the past 10 years, a job in public sector is paying significantly more and the benefits "are literally bankrupting the states."
New York Governor David Paterson told CNBC the state needed to balance its budget by cutting spending and reducing the size of the public sector.
Austerity measures have started in Europe, with protesters across the continent taking to the streets. On Tuesday, Greek protests turned violent, with police firing tear gas at demonstrators who were throwing sticks.
