Posted at 1:46 PM (CST) by & filed under General Editorial.

Jim,

Two rumors are starting to move around through the gold chat rooms. I wanted to give you a heads up so you can be prepared to quickly inform the community about them as you see fit. Both rumors have potential to shock weak gold holders into selling.

1. Volcker replaces Timmy. This could lead to a kneejerk gold selloff (based on the past) and equity volatility in both directions.

2. A gold exchange traders fund may have been holding bogus gold bars which have been fabricated by China. This piggybacks some phony Chinese gold coins that have shown up through an article in coin world. This would supposedly cause a selloff in GLD, therein frightening the community.

CIGA Ken

Dear Ken,

1. Volcker’s history of jamming rates could only occur even then with the full support of the sitting administration. To believe anything like that could happen is madness. Replacing the Secretary of the Treasury by this Administration at this time is only something a chat group could come up with.

2. There is reality to fake gold. China is a whipping boy. We have more criminals in the West and need not look to Asia for crime. Maybe start looking in Washington and then move outwards.

If an ETF is in paper gold that fails or has purchased fake gold that is a problem for the holders of that fund and is bullish for gold. Buyer would stop buying paper gold except on the COMEX where they would take delivery out of the COMEX warehouse and stop those criminals from manipulating the gold market. I am always amazed at how silly people can be when it refers to gold.

The internet is a tool of manipulation across the board. Those that believe either of the above chat site madness as negative to gold are raving idiots.

Volcker would be bullish for gold as the Father of the Federal Reserve Gold Certificate Ratio, modernized and revitalized.

What is happening you ask? The Chairman of the Fed is speaking so gold should be lower and the US dollar should be higher. This is a market applause for his total fabrication of fact. Traders knowing this will jump on these directions, having succeeded in the past .

Listen to the Senators question Bernanke. People are getting red in the face mad at this ongoing monetary madness.

Consequences will not be voided .

Hyperinflation is the end of all this madness, lies and outright theft.

Respectfully yours,
Jim

Posted at 6:58 PM (CST) by & filed under In The News.

Dear CIGAs,

The hedgies and OTC derivatives have not only killed everything and everybody they have touched, they both have killed capitalism.

The US dollar will not escape their bloodstained, cursed hands.

All the money from the bailout goes into the company and then out to the counter parties to AIG OTC derivative counter parties.

The financial black hole idea is total bulls**t. All that money is in the system in a concentrated form.

When the super wealthy criminals have all the paper money then they will have one hell of a paper problem.

Today’s AIG Bailout Won’t Be Its Last (AIG)
Joe Weisenthal|Mar. 2, 2009, 8:15 AM|clip_image0017

This morning the government officially announced plans to prop up AIG with another $30 billion, deeming the potential systemic risk of a collapse to be too great. Perhaps we should stop calling this a bailout of AIG, which, after all, has seen its stock killed. It’s basically worthless. It’s the company’s counterparties that are getting bailed out each time.

Everytime AIG has reworked its deal, we’ve been sure that it wouldn’t be the last time, and again, it doesn’t look like this will be either.

As significantly, the restructuring components of the government’s assistance begin to separate the major non-core businesses of AIG, as well as strengthen the company’s finances. The long-term solution for the company, its customers, the U.S. taxpayer, and the financial system is the orderly restructuring and refocusing of the firm. This will take time and possibly further government support, if markets do not stabilize and improve.

In other words, it’s a matter of when, not if AIG’s counterparties will need to be bailed out again

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Jim Sinclair’s Commentary

This is where we are headed:

Usdollar100Marx.jpg

 

OTC derivatives:

"Capitalist production, therefore, develops technology, and the combining together of various processes into a social whole, only by sapping the original sources of all wealth – the soil and the labourer."
–Karl Marx

The last 8 years:

"For the bureaucrat, the world is a mere object to be manipulated by him."
–Karl Marx

The Federal Reserve bailouts today:

"In bourgeois society capital is independent and has individuality, while the living person is dependent and has no individuality."
–Karl Marx

What is to come:

"Men’s ideas are the most direct emanations of their material state."
–Karl Marx

 

Jim Sinclair’s Commentary

Contrary to present opinion, AIG is a fine insurance company. It has insured the event of hyperinflation. Hyperinflation guarantees that Alf will be correct on the price of gold.

All of this a gift from the OTC Derivative manufacturers and distributors presently counting their huge ill gotten gains.

The new way to succeed is to be politically connected while trashing your company and employees.

Regards,
Jim

 

BNY Mellon’s fx team: Ultimately, buy gold
Posted by Izabella Kaminska on Feb 26 15:16.

Bank of New York Mellon’s London-based currency strategy team (made up of Simon Derrick and Neil Mellor) presented on Wednesday a very compelling view of what to expect in the forex markets in the next year.

The short view: euro, yen weakness cometh as the dollar strengthens. The longer three to six month view – ultimate dollar weakness and a gold rally.

Now for the very macro rationale…

Looking back over the crisis BNYM explain how most fx moves since 2001 could largely have been expected as they made complete rationale sense – eg. the development of the carry-trade because of Japan’s accomodative policy etc, and a hike in global liquidity because of low rates in the US. As they explain:

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Jim Sinclair’s Commentary

On and on it goes. Hyperinflation will not be avoided.

U.S. Treasury and Federal Reserve Board Announce Participation in AIG Restructuring Plan

Washington, DC – The U.S. Treasury Department and the Federal Reserve Board today announced a restructuring of the government’s assistance to AIG in order to stabilize this systemically important company in a manner that best protects the US taxpayer. Specifically, the government’s restructuring is designed to enhance the company’s capital and liquidity in order to facilitate the orderly completion of the company’s global divestiture program.

The company continues to face significant challenges, driven by the rapid deterioration in certain financial markets in the last two months of the year and continued turbulence in the markets generally.  The additional resources will help stabilize the company, and in doing so help to stabilize the financial system.

As significantly, the restructuring components of the government’s assistance begin to separate the major non-core businesses of AIG, as well as strengthen the company’s finances. The long-term solution for the company, its customers, the U.S. taxpayer, and the financial system is the orderly restructuring and refocusing of the firm.  This will take time and possibly further government support, if markets do not stabilize and improve.

Given the systemic risk AIG continues to pose and the fragility of markets today, the potential cost to the economy and the taxpayer of government inaction would be extremely high.  AIG provides insurance protection to more than 100,000 entities, including small businesses, municipalities, 401(k) plans, and Fortune 500 companies who together employ over 100 million Americans. AIG has over 30 million policyholders in the U.S. and is a major source of retirement insurance for, among others, teachers and non-profit organizations.  The company also is a significant counterparty to a number of major financial institutions.

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Jim Sinclair’s Commentary

Harvard is getting killed in OTC derivatives. Harvard has the greatest influence on the Obama Administration.

Does that give you a hint of what we are in for.

Failing at Harvard: Ivy Cash King Tumbles
Harvard University Pays the Price for Exotic Bets
By BERNARD CONDON and NATHAN VARDI 
Forbes.com
March 1, 2009

Stocks were tumbling last fall as the new school year began, but at Harvard University, it was as if the boom had never ended.

Workers were digging across the river from Harvard’s Cambridge, Mass., home, the start of a grand expansion that was to eventually almost double the size of the university. Budgets were plump, and students from middle class families were getting big tuition breaks under an ambitious new financial aid program.

The lavish spending was made possible by the earnings from Harvard’s $36.9 billion endowment, the world’s largest. That pot was supposed to be good for $1.4 billion in annual earnings.

Behind the scenes, though, a different story was unfolding.

In a glassed-walled conference room overlooking downtown Boston, traders at Harvard Management Co., the subsidiary that invests the school’s money, were fielding questions from their new boss, Jane Mendillo, about exotic financial instruments that were suddenly backfiring.

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Jim Sinclair’s Commentary

Here is a question that carries with it a logically inviting conclusion.

If one Gold ETF claims not to be an OTC derivative Gold ETF that means that others are OTC derivative Gold exchange traded funds.

Be careful "HOW" and "WITH WHAT VEHICLE" you protect yourself.

Allocated Gold Only for Dubai ETF
By: Peter Cooper, Arabian Money
Posted Monday, 2 March 2009

The Nasdaq Dubai and World Gold Council launched its long awaited gold exchange traded fund today, which is both Shariah compliant for Islamic investors and 100 per cent backed by physical gold.

‘This is not a derivative product because it is 100 per cent backed by allocated gold held in London vaults by HSBC, and audited both by traditional and shariah auditors,’ CEO of the WGC Aram Shishmanian told ArabianMoney.Net.

Allocated gold

He said it was important to understand the difference between unallocated and allocated gold. ‘The Dubai ETF has allocated gold, so there is no third party between the metal and its owner. The ETF certificate is an entitlement to one-tenth of an ounce of gold.’

Trading under the ticker symbol GOLD, the new ETF is the first new launch on the Nasdaq Dubai this year, and the one-time 60 basis point charge is exactly the same as other existing ETFs.

Will this make the Dubai ETF sufficiently different to attract regional investors who already have the exchanges of the world at their finger tips?

‘We have launched a series of ETFs around the world and have always found that a regional product stimulates new demand,’ said Simon Village, executive director of Dubai Commodities Asset Management.

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Jim Sinclair’s Commentary

Lacker calls for the US Treasury to bail out the Fed. Independence is NOT the issue. The Fed balance sheet is the issue.

Lacker knows what markets do not. The condition of the Federal Reserve Balance sheet is an open invitation to hyperinflation.

Hyperinflation is always associated with slow growth.

Fed’s Lacker Says Mistake to Rely on Slowing Growth
By Craig Torres and Anthony Massucci

May 23 (Bloomberg) — Federal Reserve Bank of Richmond President Jeffrey Lacker said it would be a mistake to rely on a slowing economy rather than central bank policy to curb inflation.

“It is central banks, not the labor market, that drive inflation down,” Lacker said in a speech to the Money Marketeers of New York University yesterday. “Clear communications accompanied by consistent actions could bring about a relatively prompt and low-cost reduction in inflation.”

Lacker, who alone voted to lift interest rates in the last four meetings of 2006, said after the speech he was “comfortable” for now that the Fed’s benchmark rate of 5.25 percent will achieve the bank’s aims.

His doubt that slower growth will cause inflation to recede clashes with the outlook of policy makers such as San Francisco Fed President Janet Yellen. Lacker has repeatedly warned of the danger that inflation expectations will drift higher the longer that price gains exceed officials’ comfort zone.

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Fed’s Lacker:Fed credit programs risk independence
By Alister Bull

ARLINGTON, VA March 2 (Reuters) – Emergency credit market support from the Federal Reserve has sidestepped Congress and could expose the U.S. central bank to political pressure that hurts its independence, a top Fed policy-maker said on Monday.

‘Using the Fed’s balance sheet is at times the path of least resistance, because it allows government lending to circumvent the congressional approval process,’ Richmond Federal Reserve Bank President Jeffrey Lacker said.

‘This risks entangling the Fed in attempts to influence credit allocation, thereby exposing monetary policy to political pressure,’ he told the National Association for Business Economics during a luncheon speech.

Lacker, a voting member of the Fed’s policy-setting committee this year, dissented at its meeting in January to protest against targeted credit easing programs that have pumped hundreds of billions of dollars into financial markets, which have been locked up in panic over bank losses.

He objected to the intrusion of the Fed into private sector lending decisions, and would have preferred the U.S. central bank ease credit conditions via the purchase of U.S. Treasury securities.

More…

Fed’s Lacker: Opposes Fed policy for picking winners, losers

WASHINGTON (MarketWatch) – Jeffrey Lacker, the president of the Richmond Federal Reserve Bank , said Monday that one reason he is opposed to the Fed’s new credit easing policy because it is picking winners and losers in the market. "While some market segments benefit from reduced funding costs, others may actually see their costs rise as credit is diverted to those markets that have been targeted for support," Lacker said in a speech to business economists. Lacker dissented from the Fed’s last policy statement in late January. Lacker wants the Fed to expand its monetary base but only though purchases of Treasurys because they are a more "neutral" asset class that would not impact other markets. Lacker said that there may be sound market basis that some credit channels are "frozen," suggesting that targeting credit programs are not needed.

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CIGA Marc’s Commentary

The US dollar or Gold? For me the choice is simple!  Particularly thanks to Mr. Sinclair.

Emerging economies eye gold reserves as dlr fears rise
Mon Mar 2, 2009 9:11am EST
By John Irish and Luke Pachymuthu

DUBAI, March 2 (Reuters) – Major emerging economies are seeking to raise their central banks’ gold reserve holdings as fears of a sharp depreciation in the U.S. dollar mount, senior industry officials said on Monday.

Investors have been piling into gold as a safe haven as the the world’s worst financial crisis since the 1930s depression sent global stock markets crashing.

"In this recession it is India and China which are going to grow at a slow rate, but they are growing," said Aram Shishmanian, chief executive officer of the World Gold Council.

"And they will naturally be looking to gold as part of their reserve asset management strategy, and=2 0I see them buying."

China, the biggest foreign holder of dollar denominated treasury securities with some $681.9 billion or about 12 percent of treasury papers outstanding, could reverse that by paring its dollar holdings.

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Posted at 6:21 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Only Gold can provide the required protection.

  1. The demise of the US dollar is inherent in its faux strength caused by international debt money flows.
  2. Hyperinflation is now set in cement. Citi last week, AGM today – all will come home to roust by economic law.

At .8900 on the USDX the argument that China cannot sell dollar or dollar denominated instruments starts to dissolve.

This then is true for every other nation whose central bank has expressed a desire to diversify their currency holdings.

This same argument applies to US treasury instruments.

The fundamentals of the US dollar are horrendous, exceeding the problems of the euro by orders of magnitude.

Hyperinflation is the natural outcome of the unprecedented, over the top, mad, mad bailouts of all the near and dear politically.

What Effect Will Hyperinflation Have?
September 22, 2008
Avery Goodman

(Excerpts From Article)

“For America, like 1920s Germany, the hyperinflationary trigger will not come from within the nation. It will come from outside. Eventually, China, Japan, and/or some other nation, will see the endlessly increasing American deficit spending as a threat to the viability of the U.S. dollar. In response, they will reduce their purchases of treasury bills. This will bring America to her knees. Indeed, there is already talk, in China, about the danger of keeping Chinese foreign reserves predominantly in the form of U.S. dollar denominated treasury bills and bonds. The Chinese are talking about diversifying away from the U.S. dollar. This will happen, eventually, no matter what we do. It is not a matter of “if”, but, rather, of when.”

“At minimum, the U.S. dollar will depreciate by the amount by which the Federal balance sheet is corrupted by the toxic mortgage paper. Most frightening is the prospect of giving Hank Paulson, the prior Chairman of Goldman Sachs, one of the key creators of the toxic mortgage instruments that have caused the credit crisis, unlimited discretion in doling out $700 billion in bailouts, without any possibility of judicial review. Doing that assures that the money is used in the most inefficient and nepotistic manner. It will bring us deeper into hyperinflation.

We can rationally expect that the US dollar will lose about 75% of its value, within 2-3 years. Cash in the form of government and/or corporate bonds, money in CDs and other bank accounts, will be hit the hardest. “

Full Article…

Defining the Components of a Hyperinflationary Great Depression
Deflation, Inflation and Hyperinflation.

Inflation generally is defined in terms of a rise in general prices due to an increase in the amount of money in circulation. The inflation/deflation issues defined and discussed here are as applied to goods and services, not to the pricing of financial assets.

In terms of hyperinflation, there have been a variety of definitions used over time. The circumstance envisioned ahead is not one of double- or triple- digit annual inflation, but more along the lines of seven- to 10-digit inflation seen in other circumstances during the last century. Under such circumstances, the currency in question becomes worthless, as seen in Germany (Weimar Republic) in the early 1920s, in Hungary after World War II and in the dismembered Yugoslavia of the early 1990s.

The historical culprit generally has been the use of fiat currencies — currencies with no asset backing such as gold — and the resulting massive printing of currency that the issuing authority needed to support its system, when it did not have the ability, otherwise, to raise enough money for its perceived needs, through taxes or other means.

Foster (see recommended further reading at the end of this issue) details the history of fiat paper currencies from 11th century Szechwan, China, to date, and their consistent collapses, time-after-time, due to what appears to be the inevitable, irresistible urge of issuing authorities to print too much of a good thing. The United States is no exception, already having obligated itself to liabilities well beyond its ability ever to pay off.

Here are the definitions:

Deflation. A decrease in the prices of goods and services, usually tied to a contraction of money in circulation.

Inflation. An increase in the prices of goods and services, usually tied to an increase of money in circulation.

Hyperinflation: Extreme inflation, minimally in excess of four-digit annual percent change, where the involved currency becomes worthless. A fairly crude definition of hyperinflation is a circumstance, where, due to extremely rapid price increases, the largest pre-hyperinflation bank note ($100 bill in the United States) becomes worth more as functional toilet paper/tissue than as currency.

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Posted at 6:07 PM (CST) by & filed under Guild Investment.

Dear CIGAs,

Washington’s confusion and ineptitude in addressing the U.S. banking and economic problems has not given the markets comfort (more on that below).   The problem is complex, but there are people in the world who understand the economics and have ideas for addressing the problem. 

Pete Peterson, the former Commerce Secretary and founder of Blackstone Group was interviewed in the Financial Times last week.  He offers the reader an excellent big picture view of how we got here, and what tough medicine is required.

The article can be found at: Financial Times

ZOMBIE BANKS

Below is a short article in the Wall Street Journal that highlights the risk of not doing enough to recapitalize the banks and clean up their balance sheets of bad assets.  Half measures are likely to prolong the economic malaise as it postpones the eventual cleansing that is needed.

The Curse of the Zombie Banks
Wall Street Journal-February 26, 2009.

The Federal Reserve’s lending programs have saved the financial system’s life. They also could be making its life miserable.

That is one takeaway from a research paper by Douglas Diamond and Raghuram Rajan of the University of Chicago, published online this week by the National Bureau of Economic Research.

As fresh data from the Fed will show Thursday, the central bank’s balance sheet has more than doubled since August 2007. Some Fed programs have helped loosen the credit logjam, including the Term Securities Lending Facility, which lets banks borrow money using mortgage-backed securities and other hard-to-sell assets as collateral.

But the Fed also might have kept alive weak banks and other institutions having balance sheets stuffed with toxic assets, the two professors suggest. The weak are afraid to sell such assets because doing so would wipe them out, while strong institutions don’t want to buy because they are holding out for a fire sale.

Without a lifeline from the Fed, the weaklings could have died, putting the assets in stronger hands at cheaper prices.

"Central bank intervention to lend against all manner of collateral may not be an unmitigated blessing," Messrs. Diamond and Rajan wrote.

The consumer-loan-focused Term Asset-Backed Securities Loan Facility, which will roll out "very soon," Fed Chairman Ben Bernanke said Wednesday, could raise similar problems if consumer credit quality keeps withering.

Of course, doing nothing to help credit would have been catastrophic. But "zombie" banks are a reminder that clearing one logjam can make another one even worse.

REMINDER, FOR A LIMITED TIME…

For no charge, as a service to our readers, we will be happy to examine your current investment portfolio, and explain how we might restructure it to meet your needs for income and capital appreciation in the current environment.  In recent weeks, we have received a number of requests to review investment portfolios and have been responding to them as time permits.  In order to provide a more meaningful evaluation of your portfolio, we will need additional information about your overall financial picture.  Please give us a call if we can help you in this regard.  

Thanks for listening.

Monty Guild and Tony Danaher
www.GuildInvestment.com

Posted at 3:57 PM (CST) by & filed under David Duval, Trader Dan Norcini.

Dear CIGAs,

Talk about a roller coaster ride in the gold market – up strongly overnight, down during the early New York session and then back up again after noon in New York before settling slightly lower on the day. Gold was caught in a crossfire between safe haven buying and a huge, and I do mean HUGE, dumping of commodities across the board. The only commodity that I could see that was up was natural gas and that was mainly due to the cold weather snap currently hitting the Northeast – everything else was smacked and smacked hard as funds unloaded everything as the US equity markets imploded.

The gold shares as indicated by the HUI and the XAU were down 20 points and 10 points respectively at one point early in the session before both indices cut their losses in half by late in the morning. They are currently weaker but well off their early lows as I write this.

Bonds once again received the usual lemming like response to plunging stocks after going through a brief period last week in which they were moving lower alongside of equities. It seems as if old habits die hard. Those buying bonds are going to be taught a painful lesson as the upcoming massive supply surge will continue to weigh on Treasuries, particularly the long end.  For today however, the bond bulls are in charge as they squeeze out all the shorts and produce a sharp, short-covering rally.

The equities are now trading at 12 year lows after violating key support levels in the overnight trading in the futures pit. That brought in more selling during the course of normal trading hours which utterly mauled them.  Investors are reacting to the news surrounding AIG and the inept manner in which the feds are handling this entire financial debacle. I have said it before and will say it again – the market has lost all confidence in the new administration as the policies they are following are a recipe for economic disaster. Soaring , out of control, indeed, wild-eyed spending, talk of elimination of home mortgage interest deductions, daily bashing of producers and achievers, tax hikes, confusing statements from various policy makers and officials, all have led to an attitude that looks to be approaching total despair. I know of several small business owners who have told me categorically that there is no way in hell that they are going to hire anyone new because they do not trust what the feds are going to do next. You are talking about the chief  source of new job creation in this nation and those folks have had enough already of this new administration after not even being in power for two months! Hold onto your hats – it is just going to get worse if the past month is any indication of what we can expect.

Remember, markets attempt to put emotions aside when evaluating policy and act accordingly and they have voted with their feet.  As such, I can easily see a breach of major support in the S&P of 700 and a fast plunge in the Dow to near 6,000 at the current rate of selling. What has to wonder exactly what news might arise that can stem the loss of confidence and arrest the growing attitude of despair. I should also note one thing – shares of a certain handgun manufacturer are trading strongly higher. Looks to me like many Americans are “getting it”.

Back to gold since it has been affected by the movement in the equity markets and will continue to be for the foreseeable future. The selling originated from fund sources whose computer selling programs indiscriminately dumped a wide basket of commodities across the board. That selling is quite large as can be seen by the extent of the price moves in other commodity markets. Sugar was slammed alongside of crude oil which then hit corn which spread to the bean pit. Wheat was crushed by the rally in the dollar which looks to be embarking on a bull run if it can push through very strong resistance that lies up near the 92 level on the USDX. The Dollar rally will not last but for now, it is wining the safe haven flow race merely by default because it is so bad everywhere else. I find it ironic that the source of this economic contagion, most notably the US, is not somehow perceived to be the best place to shelter one’s wealth. Scary isn’t it?

While not exactly anything to get excited about, I view gold’s ability to withstand the commodity-wide selling onslaught as impressive. It is hard to understate the extent of the selling that hit these markets today. To see buyers be able to absorb all that selling and push the market high enough to actually get it into positive territory is a notable achievement even if the bulls failed to secure a positive pit session close. Buyers of physical gold take note – if you want to acquire the physical metal do it when prices are down.

I am watching the price of corn and am wondering what farmers are going to do this season after watching the market push prices down so low. Imagine having to make a decision that affects your family’s income when you wonder if you can put a crop in the ground and actually make enough off of that crop, assuming you can bring one to maturity, to recoup your costs and even recompense you somewhat for all the labor involved. Folks are used to eating but had better not take the American farmer for granted.

One last thing – platinum has so far been able to maintain its footing above the $1,000 mark –again, fairly impressive given the severity of the economic news and its industrial metal role. It is evident that a goodly portion of the platinum buying is coming from safe haven flows.

Click chart to enlarge today’s hourly action in Gold in PDF format with commentary from Trader Dan Norcini

clip_image001

Posted at 11:19 PM (CST) by & filed under In The News.

BAILOUT FEVER

Once it starts it cannot be ended. Bailout one and you will have to bail out thousands. Hyperinflation cannot be avoided. Protect yourself with gold immediately.

AIG was Bear Stearns’ wastepaper basket for OTC derivatives.

The too small to consider will all be the property of the too big to fail as very few mega financial entities take birth.

AIG May Get $30 Billion in Additional U.S. Capital
By Hugh Son and Rebecca Christie

March 1 (Bloomberg) — American International Group Inc., the insurer deemed too important to fail, may get a commitment for as much as $30 billion in new government capital after a record quarterly loss, said two people familiar with the matter.

The insurer may also be allowed to make lower payments on government loans, said the people, who declined to be identified because there was no public announcement. New York-based AIG may forfeit part of stakes in its two largest non-U.S. life insurance divisions to lower the firm’s debt, the people said.

AIG, first saved from collapse in September with a package that grew to $150 billion, had to restructure its bailout after failing to sell enough units to repay the U.S. Firms including banks relied on AIG to back more than $300 billion of assets through derivative contracts as of Sept. 30, making the insurer a “systematically significant failing institution” that has to be propped up, according to the Treasury.

“The government has accepted all the downside with little chance of upside,” saidPhillip Phan, professor of management at the Johns Hopkins Carey Business School in Baltimore. “They are trying to protect the global financial system from a complete meltdown.”

AIG, which agreed in September to turn over an 80 percent stake to the government, is set to announce a fourth-quarter loss of about $60 billion tomorrow, according to three people familiar with the matter. The company’s board was scheduled to meet today to vote on the revised bailout, according to two other people familiar with the matter.

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Jim Sinclair’s Commentary

Are you still dealing with internet financial sites?

That is the exact opposite of my advice to distance yourself from financial agents.

A gold certificate is not gold. Paper gold is not gold.

"As we can see the growth of traffic begins from the time when the first notifications appeared. The users started to withdraw money from their accounts that could also caused the drop in exchangerates. As you remember the similar situation was in the beginning of e-gold crisis. That time the exchange rate of e-gold has reached 50-60%, and those who managed to get rid of e-gold currencywere in the money. So, we can say that today’s liquidity of LR is similar to the one e-gold had in the very beginning of its crisis."

Liberty Reserve is down for maintenance: users are in panic, what’s going on?
March 1, 2009 – 11:08pm | author: ayny

These days something really strange happens to one of the most popular payment processors Liberty Reserve. Being created several years ago this online payment system has become ‘number one’ for theonline investment industry. There is hardly any investment project that doesn’t use LR as a payment gateway, and the latest event around it became a real nightmare for them. Liberty Reserve is stable for two weeks.

Everything started in the second half of February. The site of the company became unavailable on February 18 without any preliminary notifications however in few hours everything was fixed. The next outage happened on February 21 though this time LR was posted a notice in their blog:

“We are currently installing updates that became available just recently for our routers. This procedure should approximately take not more than 5-9 hours, which also includes the restarting of allhardware and testing. We sincerely apologize for this unplanned event, but keeping our hardware up to date is one of the highest priorities as it assures the most secure operation.”

When the site came online some users faced the problems with login as system didn’t accept the passwords. Later on February 22 LR has posted another announcement: “We are going through final steps of testing of all updates implemented earlier. During this stage some of you may not be able to temporarily login to your account, while changes are still being tested and analyzed for maximum performance…”

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Jim Sinclair’s Commentary

How can Israel live with this development?

Iran’s uranium ‘enough for bomb’

Iran has enough nuclear material to build a bomb, the United States’ most senior military commander has said.

"We think they do, quite frankly," Adm Mike Mullen, chairman of the US Joint Chiefs of Staff, told CNN.

"And Iran having a nuclear weapon, I’ve believed for a long time, is a very, very bad outcome for the region and for the world," he said.

Iran says its nuclear programme is entirely peaceful, but the West suspects it is seeking nuclear weapons.

‘One bomb’ possible

A report issued by the International Atomic Energy Agency (IAEA) two weeks ago said Tehran had built up a stockpile of fissile nuclear material. This raised concerns in the West that Iran might have understated by one-third how much uranium it has enriched.

The IAEA report showed a major increase in Iran’s reported stockpile of low-enriched uranium (LEU) since November to 1,010 kg.

Some physicists believe this stockpile is enough to be converted into enough highly enriched uranium to build one bomb.

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Jim Sinclair’s Commentary

Forewarned is forearmed

Be careful of internet gold offerings regardless of appearances. They are ALL frauds.

All that glitters is not gold
STANLEY SENEVIRATNE Kurunegala north group corr.

A five member gang operating islandwide were taken into custody by Habarana police while attempting to sell a stock of fake gold nuggets early yesterday.

The modus operandi of the gang had been to sell the fake gold nuggets to a wealthy merchant claiming they had discovered the treasure.

Inquiries revealed that the suspects had been carrying on this racket over a long period and had employed over 180 others as their agents and sub agents in many parts of the country.

Police said the brain behind the racket was among the suspects already in custody.

Information also revealed that the suspects had cheated several leading businessmen in Kurunegala, Dambulla, Pelmadulla, Ratnapura, Kanthale, Anuradhapura, Polonnaruwa, Hingurakgoda, Mahiyangana and Colombo.

More…

 

Jim Sinclair’s Commentary

Pakistan moving towards center stage.

Obama team lays out new Afghan-Pakistan approach

WASHINGTON (AFP) — After setting a deadline to pull US forces from Iraq, President Barack Obama is shifting gears quickly to Afghanistan and Pakistan as he lays out a broad, regional approach to fighting extremism.

The Obama administration held three days of talks last week with the foreign ministers of Afghanistan and Pakistan and said it would turn it into a regular dialogue to chart a new course in the "war on terror."

Obama has vowed to put a top priority on bringing stability to the lawless and rugged terrain between the South Asian neighbors — the home base for Taliban and Al-Qaeda militants including, most presume, Osama bin Laden.

Obama, who Friday announced a timeline to end the Iraq mission, is sending 17,000 more US troops to Afghanistan. But he said the United States needed an effort broader than just hunting and killing militants.

"We’ve been thinking very militarily, but we haven’t been as effective in thinking diplomatically, we haven’t been thinking effectively around the development side of the equation," Obama said Friday on PBS television.

"Obviously, we haven’t been thinking regionally, recognizing that Afghanistan is actually an Afghanistan-Pakistan problem, because right now the militants… are often times coming over the border from Pakistan," he said.

All three sides hailed the openness of the Washington talks, with Pakistani Foreign Minister Shah Mehmood Qureshi saying that the new administration compared with president George W. Bush’s is "really willing to listen to us."

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Jim Sinclair’s Commentary

Here comes the shock of people’s lifetime. You can not contribute what you do not have. The valuation of Pension Assets is another sick cartoon.

Here comes more bailouts via a government Pension Guarantee scheme. Hyperinflation cannot be avoided.

Protect yourselves.

Pension bombs going off

By: Paul Merrion March 02, 2009

Exploding pension fund shortfalls are blowing billion-dollar holes in the balance sheets of some of the Chicago area’s biggest companies, forcing them to make huge contributions to retirement plans at a time when cash flow and credit are already under stress.

Boeing Co.’s shareholder equity is now $1.2 billion in the hole thanks to an $8.4-billion gap between its pension assets and the projected cost of its obligations for 2008. At the end of 2007, Boeing had a $4.7-billion pension surplus. If its investments don’t turn around, the Chicago-based aerospace giant will have to quadruple annual contributions to its plan to about $2 billion by 2011.

Stock market losses also pounded pension funds at Abbott Laboratories Inc., Caterpillar Inc. and Exelon Corp., with others sure to emerge as companies file their annual financial reports with the Securities and Exchange Commission in coming weeks.

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Jim Sinclair’s Commentary

Armed forces prepare to make War on British citizens in Britain.

MI5 ALERT ON BANK RIOTS
By Geraint Jones
March 1,2009

TOP secret contingency plans have been drawn up to counter the threat posed by a “summer of discontent” in Britain.

The “double-whammy” of the worst economic crisis in living memory and a motley crew of political extremists determined to stir up civil disorder has led to the extraordinary step of the Army being put on standby.

MI5 and Special Branch are targeting activists they fear could inflame anger over job losses and payouts to failed

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