Jim’s Mailbox

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Central Banks Trying To Keep Gold From Rising Violently
CIGA Eric

Listen to Jim’s interview.

The invisible hand has been working hard to keep a lid on gold and silver since April 2011. The hand is far more influential when it follows the direction of the cycles. For example, heavy paper selling works best during the D- and B-wave declines. The recent cycle transition from D-wave decline to A-wave advance means the invisible hand’s ability to control the trend are more likely to be described as pushing on a string than pulling on a rope. Increasing negative spreads on gold and silver leases as illustrated in chart 1 and 2 are but one outlet of paper control.

Chart 1: Real Gold Lease Rates (1-Month LIBOR less 1-Month GOFO) and Gold Price, USD
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Chart 2: Real Silver Lease Rates (1-Month LIBOR less 1-Month SOFO) and London PM Fixed Silver Price
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Smart traders/investors realize their paper push could setup the third hook in the D-wave’s 1-2-3 decline (see chart 3). This outcome would represent yet another big buying opportunities before the C-wave advance of 2012-14.

Chart 3: London PM Fixed Gold and GLD (ETF) Total Assets WA Stochastic
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Headline: *Breaking Interview* Central Banks Trying To Keep Gold From Rising Violently

My Dear Extended Family,

Click here to listen to the interview…

Tonight’s interview with Erik King of www.KingWorldNews.com is the summation of the last three special emails and the introduction of the ISDA to you.

I feel it is the most important offering that I have made in the past 9 years of our relationship. The future is not going to be easy, but with foreknowledge we can all survive and even prosper. This message is extremely important so if you have a moment please consider listening to the interview and then reviewing the last three emails.

Respectfully,
Jim

Source: jsmineset.com

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Dear Eric,

QE to infinity globally is the only tool able to create the infinite degree of liquidity required in an instant without any help from anybody anywhere except an electronic enter key.

Jim

Bernanke: Weak housing has hurt consumer spending
CIGA Eric

Bernanke suggests that the largely consumption-driven US economy needs rising home prices to support it. Cheap and easy credit, in turn, is needed to support rising home prices. While credit is cheap, table below suggests that it’s not easy. Real estate loans have become increasingly restrictive since the financial crisis in 2008. Real estate loans as a percentage of total bank credit has fallen from a high 42.1% in 2009.11 to 36.8% 2012.01. Even more disturbing, total loans at 73% total bank credit continue their steady decay. What are banks doing with their money? They’re buying Treasury and Agency (public sector) debt and hoarding cash in record percentages.

Table: Breakdown of Total Bank Credit, All Commercial Banks
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Headline: Bernanke: Weak housing has hurt consumer spending

WASHINGTON – Ben Bernanke says declines in home prices have forced many Americans to cut back sharply on spending and warns that the trend could continue to weigh on the economy for years.

The Federal Reserve chairman drew the connection between home values and consumer spending, which fuels 70 percent of economic activity, on Friday during a speech to the National Association of Home Builders in Orlando.

Bernanke says the broader economy won’t fully recover until the depressed housing market turns around. People are spending less because they are stuck in "underwater" homes, which are worth less than what is owed on the mortgage. And home values are falling because of foreclosures and tight credit — even in areas with lower unemployment.

"Recent declines in housing wealth may be reducing consumer spending between $200 billion and $375 billion per year. That reduction corresponds to lower living standards for many Americans," Bernanke said.

The Fed chairman said there’s no "silver bullet" to rescue the housing market. Renting out foreclosed homes and reducing or modifying mortgages are among steps that could help.

Source: foxnews.com

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Jim,

Slowly the light is coming on QE…

Best regards,
CIGA Christopher

Christopher,

This development will call into play the Federal Reserve as the lender of last resort via ever extended swap lines of dollars.

Haircuts on debt also requires that the haircut amount be made up in QE liquidity for the member banks holding that debt or they face balance sheet shrinkage and more.

Jim

European National Central Banks could face haircut losses on their Greek debt holdings

German Bundesbank and Luxembourg’s Central Bank own large amount of Greek bonds, while other central banks have hardly invested in Greek bonds, the German newspaper said, citing people in Brussels.

Governments hope that central banks would accept to voluntary participate in taking losses on the Greek debt holdings in order to avoid increasing the size of the second bailout package worth 130 billion euros, as the euro zone finance ministers projected that Greece needs between 145-150 billion euros, where Greek banks needs more than the previously projected 30 billion euros for recapitalization, the newspaper said.

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Dear Jim,

This might be of use to your readers. I’ve compiled all the gold price predictions for 2012, that I’ve found since late 2011, and posted it here:

http://realmoneytracker.com/blog/2012/02/2012-price-predictions-for-gold-and-silver/

Hope this message finds you in great health and spirit. And thank you so much for your two epic posts and the recent KWN interview. Thank you.

Best Regards,
CIGA Johnny