Posts Categorized: General Editorial

Posted by & filed under General Editorial.

Dear Extended Family,

Please do not be confused by today’s market.

1. The new Commander and Chief to take over the onerous Presidential duties tomorrow is being welcomed by those that see President Elect Obama as a sort of "Second Coming FDR." That seems a tad overrated under present circumstances. It is not economically the best comparison.

2. The idea that the various constituent countries of the Euro have more problems than the US is media misguidance.

3. The upcoming addition of fiscal stimulus will have an effect. That effect has severe unwelcome consequences that will not be postponed. The effect will be evident before the 2nd half of 2009.

4. The planet is getting too close to a universal WEIMAR EXPERIENCE which has no historical comparison to judge by. History is about to be written.

5. Gold is the only and certain answer in this monetary abandon about to be kicked in the rear by fiscal madness.

I need a few days after the 8+ hours in the air from Joberg to Dakar and another 9 hours immediately thereafter from Dakar to JFK. That is a long time to be in one seat no matter how comfortable it is.

Respectfully yours,
Jim

Posted by & filed under General Editorial, Trader Dan Norcini.

Dear Friends,

Please review the following charts detailing the Treasury International Capital Flows data for the month of November 2008 along with some comments.

In the first chart shown, please note that the Treasury has two different methods for computing the net capital flows for each month. One uses only long term securities while a newer methodology measures both LONG term and SHORT term securities. The BLUE line is long term securities while the RED line is the plot of both long and short term securities. The BLACK line is the absolute value of the US trade balance which happens to be negative.

You will note that since July of last year (2008), when the credit crisis seemed to erupt, with the exception of only one month, notably September, foreign investors, both private and official, have been unloading long term US debt in favor of shorter dated securities. This data can be quite volatile so it is rash to make too many assumptions based off a few months activity but I would say that we are seeing what seems like the beginning of a serious trend. Demand by foreign investors for long term US debt is a measure of their willingness to continue financing US deficit spending. Should this data mark what becomes a definitive trend, that would leave only the Fed and the Treasury itself as the buyers of last resort for their own issuances.

You will also notice in subsequent charts, the move to begin with the last 2 month’s data has now been confirmed – China has become the largest holder of US Treasury debt in the world having easily eclipsed Japan which has quietly been continuing to slowly draw down its reserves of Treasuries. Who would have ever envisioned 10 years ago that the nation which is the model of free market capitalism would have become completely dependent on a Communist nation to finance its way of life.

Lastly, note that all major categories of US Debt were offloaded by foreign investors in November 2008. Bonds, Agency debt (Fannie and Freddie) along with US corporate issues were summarily dumped. The only US securities that showed net inflows were US equities.

Click here for today’s November 2008 TIC Data with commentary from Trader Dan Norcini

Posted by & filed under General Editorial.

Dear CIGAs,

When the Rappers have it figured out we are getting dangerously close to the unavoidable HYPER-INFLATION, a currency event, and to serious social unrest.

Do not play this if rap is offensive to you. This is not for the kids, please.

Posted by & filed under General Editorial.

Dear CIGAs,

After a long trip I am now safely at home and would like to share the following picture of myself in RSA with one of my African family. After catching up on some rest I will be back up to speed here on JSMineset.

10012009153

Posted by & filed under General Editorial.

Dear CIGAs,

Hints have been dropped repeatedly about the potential of the Federal Reserve issuing Federal Reserve Bonds along with less issuing of Treasury Bonds in order to sterilize (mop up) the new wobbling, out of control, universal monetary killer of “Galaxy Liquidity” the Fed and Treasury are creating. They had no other option facing this gargantuan and unprecedented crisis of CONFIDENCE called credit – a gift of the Western OTC derivative fabricators.

Letting Lehman collapse was a scheme with many proponents based on the assumption that the underlying debts, called assets, would recover in time, regardless of the implosion of the credit default derivatives thereupon.

Bankruptcy against these chains of obligations called ownership is their mistake.

Without trying to “geek you out,” the intellectual weapon of choice of those with large foreheads and sunken eyes, let me draw you a mental picture.

Any OTC derivative misnamed an asset, now in the inventory of the Fed, is a STRING with many knots.
The knots are counter parties.
The string is the thing called an asset.
Value, slipped or sliced, is called prefabrication.
(Titles changed for the purpose of mass understanding).

This string, having been assumed to be as asset, has formed the basis for more and more transactions until one string with a few knots has become a toxic spider web obscuring the Earth’s financial from being seen from outer space.

Here comes the scary Geek boo-boo:

Many of those knots are BANKRUPT. They are festering empty holes now unable to perform their specific performance duties, that being to hold together the web and therefore eternally preventing the string from holding if /when stressed one more time.

The stress is a crisis of confidence in the glue that has been applied to the failed knot which is now a gap.

The glue is the creation of huge numbers, called liquidity, that are like universe sized lumps of undulating maggot pie waiting for any pickup in economic volume to transmute themselves into the currency vermin of FLIES who carry the incurable Eastern Flu called HYPER-INFLATION, a currency event.

The end of economic days is game over hyperinflation, a currency event – not an economic event triggered by glue failure as above.

The spider web collapse reveals the real world, the failed universal reserve currency, the pug-ugly dollar!

Because the plan cannot work either within two generations, or in fact, the following is the real world financial matter at hand:

The Unavoidable Face Of Hyperinflation
Posted: Jan 14 2009     By: Jim Sinclair      Post Edited: January 14, 2009 at 1:32 am
Filed under: General Editorial

Dear CIGAs,

CIGA Erik shows in chart form the face of unavoidable hyperinflation – a currency event.

It is horrifying what the Fed and Treasury injected in percentage terms. A true measure of comparison can be seen in the 3 months of 2008 when the Fed accomplished more than in the 7 years from 1929 to 1937.

This is beyond all reason, having its own new and terrible consequences well in excess of the consequences of the 1929 and 1932 breaks.

Markets have been run now for years by algorithms, manipulators and seeded interests that are like summer thunderstorms. They are loud and scary, but quite short term and in the end quite meaningless and non-productive.

The dollar cannot and will not remain strong, nor can a planetary Weimar experience now be avoided.

Click chart to enlarge in PDF format

frtr20090113-1533271

Posted by & filed under General Editorial.

Dear CIGAs,

CIGA Erik shows in chart form the face of unavoidable hyperinflation – a currency event.

It is horrifying what the Fed and Treasury injected in percentage terms. A true measure of comparison can be seen in the 3 months of 2008 when the Fed accomplished more than in the 7 years from 1929 to 1937.

This is beyond all reason, having its own new and terrible consequences well in excess of the consequences of the 1929 and 1932 breaks.

Markets have been run now for years by algorithms, manipulators and seeded interests that are like summer thunderstorms. They are loud and scary, but quite short term and in the end quite meaningless and non-productive.

The dollar cannot and will not remain strong, nor can a planetary Weimar experience now be avoided.

Click chart to enlarge in PDF format

FRTR - 20090113_153327

Click here to view CIGA Eric’s commentary website…

Posted by & filed under General Editorial.

Dear CIGAs,

The junior gold share valuations in the marketplace make many companies worth much more in parts then in their total marketplace valuations.

Maybe the majors have just overplayed their waiting hand.

Jim

From Reuters:
– Says that Yamana is "on the hunt" for single-property acquisitions given how cheap exploration/development stage gold companies have become due to the credit crisis.
– Echoes our January 5th mining comment "Cheaper For Majors To Buy Than Build"
– Indicates that YRI may wish to acquire more robust projects in an effort to replace some of the higher-cost, more marginal projects it has in its current growth pipeline.
– YRI would likely be looking for a higher-IRR project to take the place of its Pilar, La Pepa, and/or Ernesto projects.

INTERVIEW-Yamana seeking single-property acquisitions-CEO
Tue Jan 13, 2009 3:48pm GMT
(In U.S. dollars)

TORONTO, Jan 13 (Reuters) – Yamana Gold (YRI.TO) is on the hunt for single-property acquisitions or cast-off assets from other companies, the mid-cap Canadian gold producer’s chief executive said on Tuesday.

In an interview, Peter Marrone said the company will use both cash and stock to pursue assets that have become cheap due to a financial crisis that has cut off smaller miners from credit.

The sector has benefited from gold prices that, while off last year’s peaks, have stayed relatively strong. Marrone said it is "not unrealistic" to see gold hitting $1,200 an ounce this year. The metal <XAU=> was at $826 on Tuesday.

($1=$1.23 Canadian) (Reporting by Cameron French; editing by Peter Galloway)

Link to article…

Posted by & filed under General Editorial.

Dear Friends,

Having secured your finances by insuring them with gold and distancing your assets from your financial agents to the greatest degree possible, there comes one more task that you should put some thought into: securing yourself.

There is no question at all that as the jobless rate rises, civil disorder will begin to manifest itself in society.

No matter if you live in NYC or in Flat, Alaska it would behoove everyone to review and improve their home security. You have nothing to lose by being objective. Here are a few ways to achieve a high level of home security:

(1) Install an external intercom so you can talk with people coming to your home without unlocking or opening the door. Itinerant door knockers don’t need to see you or have personal contact with you nor do they need to see inside your home. Door-to-door solicitors, like telemarketers, need to be politely but abruptly, dismissed. Provide them with no information!

(2) Electronic security: Don’t buy a cheap system. It costs several thousand dollars for a competent, monitored system. Once installed, use it! It needs to be activated every night and every time you leave the house. Make it personal policy!

(3) Dogs serve many purposes, the first of which is companionship without conditions. Even a total wimp like Mr. Freddie (my wife’s legacy to me) can raise the alarm when required. Mia not only raised the alarm but also the roof and walls. She chased Victoria’s kids out of my office. She bit my African daughter which made me remind her, like it or not, that Mia is the family dog and her action might be a comment on how often Marlene is home.

Of course, I am kidding. Mia was very sternly reprimanded for that one. Mia was a tough situation as I loved her dearly, but she felt her duty was to protect me from everything and everybody. This is why Barbara changed her name from "Mia" to "My Damn Dog." In sum, Mia fulfilled her self appointed duty by being one mean b—h, (referred to as a female of her species).

(4) If you live like I do in a rustic and somewhat isolated area, then metal detectors at all entrances are a good option. They make excellent wireless systems that now transmit 1,250 feet to the receiver. You can obtain tunes for different entrances.

(5) Automatic perimeter lighting that is triggered either by laser interruption or infrared is also an option to consider. Also, very cheap devices are available now.

Spend no less than 2 1/2 percent of your liquid net assets on home protection, electronics, communication and power generation. Even a small Honda portable generator on the porch of a metropolitan apartment – legal or not -will come in handy when you need it.

Then pray all this is totally unnecessary.