Jim Sinclair’s Commentary
None of these people have their own assets on the line so why worry in today’s world of political expediency?
Of course the most significant risk is not a topic for public and financial TV testimony.
Dear Jim,
I am surprised Ben has any hair left at all. I guess if they don’t talk about this it does not exist. He thinks state and local government finances represent the most important domestic risk factor in the US economy, yet they received only two brief mentions in 19 pages of minutes from the Fed’s April policy-setting meeting.
Federal Reserve’s worry list gets longer
Last updated 07:56 12/07/2010
The US Federal Reserve’s list of worries may be getting longer.
A fading recovery, persistently high unemployment, Europe’s debt troubles and commercial real estate losses have garnered most of the attention. But some Fed officials have begun talking more about another trouble zone – recession-hit US state and local government finances.
The problem is that they have to balance their budgets, unlike the federal government, which is running a deficit equal to more than 10 percent of total economic output.
"They have no choice but to cut spending or raise taxes — or they get some more help from Washington," said Harm Bandholz, an economist with Unicredit in New York.
He thinks state and local government finances represent the most important domestic risk factor in the US economy. Yet they received only two brief mentions in 19 pages of minutes from the Fed’s April policy-setting meeting.
Minutes from the Fed’s last meeting, on June 22-23, set for release on Wednesday, are likely to show the central bank trimmed its economic growth forecast, largely because of a run of disappointing data and fears of a European slowdown.
Notes From Underground: Kan faces a big test within the DPJ–can he remain prime minister?
Yra | July 11, 2010 at 9:50 pm
The biggest story from the weekend was the release of the Chinese trade numbers and surprisinly the export component rose 44 percent year-over-year, while the imports slowed resulting in an increase in the trade surplus.We know that this will not play well in Washington and will provide fresh fodder for the protectionist drumbeat that is [...]
Jim Sinclair’s Commentary
You want fiat currency as a storehouse of value? If so you are simply nuts.
Crisis Awaits World’s Banks as Trillions Come Due
CIGA Eric
The sovereign debt crisis would seem to create worry enough for European banks, but there is another gathering threat that has not garnered as much notice: the trillions of dollars in short-term borrowing that institutions around the world must repay or roll over in the next two years.
The sovereign debt crisis, like the onset Great Depression in 1929-1932, is everywhere. The US dollar is enjoying a safe haven bid relative to other fiat currencies due to fears that the Euro will disintegrate. The dollar strength in no way reflects true safety. California, New York, New Jersey, Michigan, etc are infected with the same debt and balance sheets problems of the higher profile, weaker members of the European Union.
Safety is a relative term. The dollar can continue to rally on capital flows seeking safety within the fiat world, but ultimately, the same forces that cause them to flee the Euro will take down members with the US Union. The term setup before the fall comes to mind with the U.S. dollar.
A change in the direction in the credit spreads or ratio between long term high grade corporate bonds and government bonds total return index, similar to July 1932 and the revaluation of gold by 1934, will mark the transition of capital flows from public to private sector. This is market the end of the illusionary rally in the dollar.
Long-Term U.S. Corporate Bonds Total Return Index (LTCBTRI) to Long-Term U.S. Government Bonds Total Return Index (LTGBTRI): 
Source: nytimes.com
