My Dear Friends,
Today’s news fury over Italy immediately unleashed the demon of MSM screaming, "So you thought the problems in Europe were over." Almost as fast as the US attacks any rating agency that looks negatively at the dollar, so does MSM broadcast temporary political instability to attack the euro. The war between the dollar and the euro has economics involved but it is not the major factor. Euroland is acting in a manner that would suggest that gold has it place in the new system in the cash market, as marked to market. Euroland has as its basis of action the construction of a gold market free of manipulation by any government interest. Euroland has not been pleased by the relationship between the Exchange Stabilization Fund and private fund operators on the bear of gold since $1800. This is a war in a sense, a tug of war. Right now everything is being done to protect the dollar at .7900 on the USDX. It is quite in vain as the US economy is going to give up this "flat line" called a recovery to the downside. The euro will outperform the dollar now, and certainly when gold is emancipated from management by Washington.
The supposed risk in Italy is that the political deal making that must occur will damage the reformist movement. Where the dollar is concerned it is "balls to the wall" in anything but any reformist category. It is balls to the wall in printing money.
MSM attacks the euro at any opportunity. In the end it is the euro over the dollar as the USA drops off the end of this economic flat line downwards.
Today In The Euro:
Not much of a move down considering how hard currency run on any news item.1.35154 -0.01127
Jim Sinclair’s Commentary
Good bye debt limit.
President Barack Obama signed the "No Budget, No Pay Act of 2013" into law Monday night, the White House said, officially suspending the nation’s debt limit through May 18. The bill also suspends pay for members of Congress if their chamber does not pass a budget resolution by April 15.
The Senate had passed the debt ceiling bill last week, and the House passed it the week before. The two chambers passed the bill along different lines. The House saw fairly strong bipartisan support for the bill. But in the Senate, it passed largely on partisan lines. Republican Senators said they voted against it because of a lack of spending cuts that accompanied the debt-limit increase.
The debt-ceiling bill is that it is not technically a clean hike in the nation’s debt limit. It’s a suspension of the debt ceiling for a certain time period. On May 19, the debt limit will be raised by an amount "necessary to fund commitment incurred by the Federal Government that required payment."
The Bipartisan Policy Center estimates that number will be around $450 billion. The BPC also estimates that the next point the nation will need to raise the debt limit will come in August.
The next budget fight will come with the looming sequester of vast, across-the-board spending cuts set to kick in on March 1.
Jim Sinclair’s Commentary
Did the S&P recently threaten to downgrade the USA if there was no viable solution to the Fiscal Cliff and the Debt Ceiling delay?
S&P says U.S. to file civil lawsuit over ratings
Mon Feb 4, 2013 3:07pm EST
(Reuters) – Standard & Poor’s on Monday said it expects to be the target of a U.S. Department of Justice civil lawsuit over its ratings of mortgage bonds prior to the recent financial crisis.
The lawsuit against the McGraw-Hill Cos (MHP.N) unit focuses on its ratings in 2007 of various U.S. collateralized debt obligations (CDO), S&P said.
It would be the first federal enforcement action against a credit rating agency over alleged illegal behavior tied to the financial crisis.
"A DOJ lawsuit would be entirely without factual or legal merit," S&P said in a statement. "The DOJ would be wrong in contending that S&P ratings were motivated by commercial considerations and not issued in good faith."
The Justice Department was not immediately available for comment.
Several state attorneys general are expected to join the case, The Wall Street Journal said, citing people familiar with the matter. The expected charges follow the breakdown of talks between the department and S&P, the newspaper said, citing the people.