Posted at 6:30 PM (CST) by & filed under Guild Investment.

Dear CIGAs,

What is all the panic about? Gold is moving ahead steadily. Every time a currency collapses gold rises further. When the Icelandic, British and Russian currencies fell, gold rose. In our opinion gold will keep rising when the next group of currencies fall and when the previously declining currencies decline more.

Do not panic. Do not harass Jim. Read his words of wisdom and be grateful for his guidance.

Fortune Favors the Brave.

Respectfully yours,

Monty Guild
www.GuildInvestment.com

Posted at 4:58 PM (CST) by & filed under In The News.

Dear CIGAs

The US Fed is bailing out the world. Therefore the US dollar is History

1:27pm EST. Bloomberg:

The Flushed questions given to Bernanke were actually put up with a picture of the inquiring party, but no sound. A hack was talking in a picture inside a picture.

Now Bernanke is delivering his prepared speech and in full view with sound.

Bernanke just admitted that the swaps with foreign banks were for the purpose of bailing out non-US banks when he stated that the ultimate borrower on those swaps was the central banks and "NOT the banks the funds were lent to." Think about this secret just revealed and the original denial.

He is discussing the ability of the Fed to lend to individuals and partnerships in emergency situations. Individuals, partnerships, who?

Armstrong and Alf are both so correct in their predictions.

Bernanke says "Wall Street Analysts are expert specialist trained to do Asset Value Analysis" in reference to OTC derivatives.

My God, these are the exact same people that that created this entire problem and claim they could not foresee the total loss of value. Now the US Central Bank’s Chairman points at their fine, cultured and unassailable expertise.

How much more of this will people tolerate?

The answer is that tolerance is not infinite in time.

Chairman Bernanke answers critics that question the total secrecy concerning Fed injections of capital into major banks by saying the "Federal Reserve is making a full study of transparency."

Serious investors and people of position are watching this all over the Globe. What do you feel their impression is of today’s less than stellar performance by the Fed and Treasury?

A question in review of the Fed’s balance sheet said the only thing that prevents the Fed from being on the weak bank watch list is that it is the Fed.

Bernanke just smiles and assures us all is well. Of course it is.

Bernanke says that because interest rates are at 0% there is no limit to the size that the Fed balance sheet can grow because the Fed can borrow at 0%. This is true, but so academic as to fail to see the market and currency impact of that statement.

 

Jim SincIair’s Commentary

If you were watching Bloomberg at 1:12 PM EST, you just witness the most important question being asked of Bernanke totally FLUSHED off the screen.

What a disgrace!
What a shame!
What a sin against the future of all!

Armstrong is 100% correct.
Alf is 100% correct.

There is no practical plan that can make any difference now. There never was.

It is business as usual!

 

Jim Sinclair’s Commentary

No commentary, this is just for your information:

Justice Department Follows Bush Administration in Invoking ‘State Secrets’ Privilege in Rendition Lawsuit

The Obama administration is siding with its predecessor in a federal case over the CIA’s rendition program, claiming lawsuits should not proceed because they could disclose secret national security information.
FOXNews.com
Monday, February 09, 2009

The Obama administration is siding with its predecessor in a federal court case in California over the CIA’s rendition program, saying lawsuits over renditions should not proceed because they could disclose "state secrets" and other classified national security details.

The administration made its argument Tuesday in front of the Ninth Circuit Court of Appeals, which was hearing an appeal in a 2007 case filed by the American Civil Liberties Union.

"It is vital that we protect information that, if released, could jeopardize national security," said Department of Justice spokesman Matthew Miller in an e-mail to FOX News.

In May 2007 the ACLU filed a claim against Jeppesen Dataplan, Inc., a subsidiary of Boeing Company. It charged that Jeppesen knowingly provided logistical services that aided the CIA’s clandestine flights that took five ACLU clients to secret overseas locations where they were subjected to torture and other forms of cruel, inhuman and degrading treatment.

In February 2008, the U.S. District Court granted the government’s motion to dismiss the case, after the Bush administration argued that any litigation would harm national security by revealing state secrets. The ACLU appealed that decision to the Ninth Circuit, which heard Monday’s arguments.

More… http://www.foxnews.com/politics/first100days/2009/02/09/justice-department-follows-bush-administration-invoking-state-secrets-privilege/

Jim Sinclair’s Commentary

Oh you foolish people pushing the panic button in gold shares today.

DJ PRECIOUS METALS:Weak DJIA, Inflation-Hedge Role Lifts NY Gold
By Allen Sykora
Of DOW JONES NEWSWIRES

Weakness in equities and worries about the U.S. economic stimulus plan eventually reviving inflation resulted in sharp gains for gold futures Tuesday.

Chart-based buying played a role in the gains of much of the precious metals. Platinum accelerated higher after busting through the previous highs for the year so far. And while gold didn’t top the late-January high, it nevertheless drew some buying when support at recent lows in the $890s held, observers said.

Most-active April gold rose $21.40 to $914.20 an ounce on the Comex division of the New York Mercantile Exchange.

More…

Posted at 4:05 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Once again, as we have seen time and time again, gold responds to powerful fundamental factors and begins moving sharply higher only to be stopped dead in its tracks at the phony, corrupt paper gold market known as the Comex gold futures pit. One look at the price chart is all that is needed to see the vile footprints of the feds showing themselves precisely at the $920 level again.

Truth be told the monetary authorities and the current administration have no clothes and investors around the world know it and are voting with their feet. Recklessly mortgaging our nation’s future with spending that reaches levels that can only be called obscene is not the answer to this problem. Creating an artificial value for paper “assets” that have NO VALUE is laughable for its sheer illogic but tragic in the fact that so many will blindly herald this “solution” as workable. You can take a pig, clean him up, put a bonnet on his head, spray him with perfume and call him a daisy but he is still in fact a pig. So it is with the OTC derivatives stew of poisoned alphabet lettered SIV’s, etc. It is worthless crap, dung, manure, carrion, buzzard-bait, excrement, etc.  Call it what you want but the fact remains that the US monetary authorities will mortgage our nation’s future for generations by attempting to throw good money after bad down this stinking rat hole that they are digging. In the meantime, sit on the price of gold and keep the citizenry ignorant of the firestorm coming their way. I see the horrific blazes that our friends down under in Oz are enduring as a type of symbolism of the raging inferno which is going to engulf our financial system.

The One’s Treasury Secretary Tim Geithner, reveals his much heralded plan to get the banks lending again and the entire market greets it by spitting in his face. What else can they do – demonize anyone and everyone who dares to question this rotten piece of legislation called a stimulus bill or who cries a “halt” to this nation’s headlong march into European-styled socialism. Where is the revenue supposed to come from to fund these trillion dollar deficits? How many generations will end up paying for  this? What is the effect going to be on this nation’s future and particularly our beloved dollar?

My good friend Bill Murphy and his faithful brother-in-arms, Chris Powell over at GATA have spent the better part of almost a decade now working diligently to reveal the manipulation of the gold price by the feds in conjunction with the bullion banks. The quality of their tireless work speaks for itself and the evidence they have gathered is more than compelling for all but the most willfully closed-minded. My small contribution has been in observing the strange price action in gold as a long-time professional trader who is familiar with patterns and price behavior across a wide variety of different commodity futures markets. Gold simply does not “behave” like any market that I have watched and traded; that is indisputable as far as I am concerned. I am not the only professional to have noticed this.

For nearly 5 years I detailed weekly in chart form and in written analysis form the shenanigans of the commercial shorts, aka the bullion banks, as revealed by the CFTC Commitment of Traders report that is released each Friday. Time and time again, just like I mentioned in yesterday’s commentary at $920, the selling in gold at critical technical junctures, has been exclusively originating out of the bullion banks as evidenced by a massive build up in the commercial short position even in the face of some of the strongest fundamentals that one could ever expect to see in any market. Rarely if ever was there the least bit of FORCED commercial short-covering even as gold would experience its occasional extreme spike higher. I have NEVER seen a market make a parabolic blow off run or an extreme spike higher in which commercial short covering was not involved to some extent. The reason for this is quite simple – it is related to margin calls on positions that go deeply underwater. Regardless, the footprint that the machinations of the bullion banks leave in the market is easily visible for anyone trained in reading price charts.

Some of you might have noticed I no longer send the COT charts up like I once did but merely make reference to them in my commentary and remark about the changes in open interest and the technical resistance levels being enforced by this increasingly blatant price capping. Rather than answering the many emails that query me about my reasons for no longer doing so on a regular basis, let me simply say that I have reached the point where I feel it is nigh to useless to expose it any further. We all know what is going on and we all know who is doing it and we all know why they are doing it, unconvincing protestations of the non-believers to the contrary. Their entire argument consists of the following: “Gold cannot be manipulated because the feds would never do such a thing”. Sure – and they would not deliberately distort the CPI data, overstate the jobs numbers, understate the federal budget deficit, put a value on valueless crap or the overstate the true rate of economic growth either. I have nothing but contempt for those that are too stupid to believe the evidence before their own eyes. They should be regarded as officialdom’s “useful idiots”.

My response to this has been quite simple – forget complaining to the authorities – do you really expect them to do anything about it? Why should they? It is in their interest to see gold underpriced – for now! Maybe I will be pleasantly surprised but the cynic in me doubts it. If you really want to see an end to this farce, you have to strip the bullion banks of the armor on which they rely – and that means one thing and one thing only. You have to take the physical gold out of the Comex warehouses by standing for delivery in large size and forcing the bullion banks to deliver the gold. You have to keep doing this again and again and again until you literally break their backs and call their bluff. The truth is the big players, the big hedge funds with tens, or in some cases hundreds of millions of dollars at their disposal, have gone AWOL in this battle. The gold market is really not that large – do the math. The Comex officially states that it has some 2.8 million ounces of gold in its registered category. At the price of $900 that is a little over $2.5 billion. The thing is that were even half of this gold taken out of the warehouses through the delivery process, the paper shorts would be effectively finished. Legitimate hedgers would not have a problem since they could deliver against the hedge when the cash transaction was consummated. We have no problem whatsoever with bona-fide commercial hedgers.  However, so-called commercial hedgers who are in reality speculators would be served notice that they stood a very good chance of being assigned if they failed to cover their paper shorts going into the delivery period. No gold to deliver and they are forced to go and get it somewhere.

I said all this because once again, now for the last three business days, there have been ZERO deliveries. I might be tempted to say that gold owners are holding onto their gold and refusing to sell it at current levels and that is why there are no deliveries but neither are there any longs standing for delivery either. There are 3100 longs left in the February contract so the drama is not yet over but the open interest in the February contract has been steadily declining since we went into the delivery period two weeks ago. It is obvious that the longs who have been bailing out are not standing for delivery. Over 1000 of them have sold out since Monday of last week without asking for any gold. This is not the way to beat the price rigging bullion banks.

Some of you by now have heard or viewed the video clip circulating on U-Tube by Rep. Paul Kanjorski. Do you think anything has really changed since then? The more I learn about such things as this the more set my convictions toward gold become. Like most of you who read this site, I do not welcome a soaring gold price since I understand the horrific conditions that will entail a rise to such lofty heights in the yellow metal. I much prefer the placid waters of sound monetary policy, good fiscal policy, and an economy based on savings and capital investment in which citizens, corporations and government live within their means. The fact is however we must play with the cards dealt to us and those cards are not currently giving us much choice but to attempt to protect our wealth from the dangers we see coming. For 8 years now, those of us who have been recommending gold to our friends and neighbors have been insulted by elites as “gold bugs”, cranks, whackos, nut jobs, etc. Yet in spite of their insults, we have been proven to have been correct in our views and have had our warnings confirmed by events. Sadly I fear that the worst still lies ahead of us as the feds will just worsen matters by their disastrous meddling.

I do not wish to discourage those who want to see if they can get the CFTC to do their job – please, by all means attempt to put pressure on them to do so. But why rely on bureaucrats whose loyalties can be divided  when we have it within our own power to end the charade.

In the meantime those who want to play the paper game, had best learn not to chase prices higher but to buy into weakness, alongside of the bullion banks, and sell into strength when the momentum chasing hedge funds are getting their bids sucked into a black hole.

Technically, resistance remains intact for gold at the $920 level. Longs will have to muster enough strength to kick the bullion banks out from behind that wall. Further resistance lies above that level near $930. Support is first at yesterday’s low near $890 and then at technically significant $880.

Gold managed to move back above the 10 day moving average which turned back up after today’s strong move higher. The rest of the major moving averages continue moving higher as well- all friendly for the intermediate trend.

The HUI and the XAU, although higher today and shrugging off pressure from the puking broader equity markets, still cannot break through overhead resistance. The HUI needs a close above 310 and the XAU above 130-131 to give the indices a chance to begin a trending move higher.

The Dollar is higher today as risk aversion is back in meaning that the yen is also higher while the commodity currencies are lower. Back to the same old drill it seems.

Bonds are moving strongly higher and have managed to move above the 10 day moving average. They are deeply oversold and it appears that buying came in and was able to push them back up above the 100 day moving average after they managed to close right at that level late yesterday afternoon. Breaking down below a major moving average and then moving back up and closing above it is oftentimes a buy signal for short term oriented traders. Failure to have held above the 100 day and the 200 day was a certainty. Rallies still look to me to be selling opportunities as guys who did not want to sell into a hole will be looking for a place to get short.

Interestingly enough, Platinum made it back over the $1000 level today. Crude oil looked to be fairly strong early in the session but has now faded and broke below $39. It is still within a wide trading band between $50 on the top and $35 on the bottom. Copper is lower so there appears to be a great deal of confusion in the commodity markets this morning. Unleaded gasoline is higher with natural gas lower with the grains also moving a bit lower today.

I want to caution you that the bullion banks are trying to induce a spec long side liquidation by stalling the price move at $920. Open interest was down slightly yesterday coming in near the 350,000 level while volume was relatively modest with a mere 100,436 contracts trading hands. Considering the extent of the downmove yesterday, it is encouraging to see the lack of downside volume. It tells me that for now there is little enthusiasm for the sell side among the spec camp. That attitude will need to remain in force to defeat the obvious capping effort taking place.

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

clip_image001

Posted at 3:22 PM (CST) by & filed under General Editorial.

Dear Friends,

Geithner proposed to the public a guarantee of value and fund for the purchase of the devil that caused all the problems – Toxic Paper.

Paper has caused this problem, not people, investment banks, the then Chairman of the Fed and the legislative as a whole.

Alf here comes TALF along with TARP and a good deal of spin and crap guaranteed to make your price objectives for gold absolute realities.

What I have suggested to you about this new no plan is absolutely correct.

Nine Points Of Logic And Reason
Posted: Feb 09 2009     By: Jim Sinclair      Post Edited: February 9, 2009 at 6:33 pm
Filed under: General Editorial

Dear CIGAs,

Nine points of logic and reason:

   1. This article is totally correct in saying nothing whatsoever has been done about the basic problem which is the failure of the OTC derivative. As long as the basic problem is not addressed by true valuation and bankruptcy of the friends of Washington all attempts to whitewash the disaster will in a short time wash away.

   2. The problem is how to value the failed OTC derivative properly because we can’t use the "zero" word.

   3. Because of #2 the US Treasury will guarantee a false value.

   4. Since the majority of SIVs will never perform due to bankruptcy in the asset chain, the US government will have to guarantee these at 100% of whatever value they intend to raise money on.

   5. Next, the US treasury will have to guarantee and/or provide 100% of the funds borrowed or raised to make this worthless unless guaranteed investment in a pile of miss-valued worthless SIV paper.

   6. Yielding the plan as it is now conceived is a useless camouflage of bankruptcy to be paid in via guarantee by the US taxpayer.

   7. We need no Bad Bank as we already have a really BAD one called the Federal Reserve. It is stuffed to its own bankruptcy level with all their financial pal’s OTC derivatives, also called toxic paper.

   8. The majority of dopes and all the financial media will praise this outstanding job of window dressing and whitewash painting as solid accomplishment at last.

   9. The media will have done a solid job instructing you that Toxic Paper is the villain, not those that manufactured the toxic paper OTC derivatives and distributed them, now having been bailed out 100% at your personal expense

This is all a Devil’s financial brew being moiled and boiled daily in hopes of keeping you all firmly intoxicated

Posted at 3:16 PM (CST) by & filed under Jim's Mailbox.

Jim,

Pakistan making the guns…

This is a chilling reality of what we face as a Nation in Afghanistan.

CIGA Tom

Click here to view the video…

Dear Jim,

Mr. Armstrong is jailed. Before I accept his analysis give me some background on his problems.

Respectfully yours,
CIGA Dr. Bob

Dear Dr. Bob,

Armstrong was one of the three that in the 70s invented the OTC derivative of which three went to jail.

The OTC derivative structure then is no different from the OTC derivative structure out there today. No one is in jail.

His alleged contempt of court issue was because of a judge’s opinion he had funds hidden. As I understand it no client of his firm was harmed.

The basis of his problem is that many of the derivatives he created caused a tax credit.

Regards,
Jim

 

Jim

The question being ask should not be when will this end but rather how bad will it get.

http://www.facebook.com/photo.php?pid=1255867&l=51ed0&id=557304509

Regards,
CIGA Eric

Click charts to enlarge

February109-Eric1 February109-Eric2

Posted at 3:10 PM (CST) by & filed under General Editorial.

My Dear Global Family,

You want to succeed in gold, life or anything? Listen to this calm situational awareness and risk analysis.

There is no room for emotions, just guts and professionalism.

Here is another exercise that I want you to do before you call to cry on my shoulder when it is wholly unnecessary.

By the way, in the 70s I single handedly ran the hell out of the Comex manipulators, breaking gold out and over every key pivot point repeatedly.

Where in hell is today’s Jim?

Now, damn it, listen to the lesson below on how to live in danger and stop being a bunch of pussies.

Sincerely,
Jim

Posted at 5:10 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Now compare President Obama’s presentation in light of Mr. Armstrong’s article!

Obama: This isn’t your ‘run-of-the-mill recession’

(CNN) — President Obama appeared before a national audience Monday night to make the case for his economic stimulus plan, saying this is not your "run-of-the-mill recession."

The president stressed the urgency of passing the roughly $838 billion measure, which his administration and Democratic leaders say will help pull the U.S. economy out of its current skid.

"My bottom line is to make sure that we are saving or creating 4 million jobs, we are making sure that the financial system is working again, that homeowners are getting some relief," he said in his first prime time news conference.

Obama’s remarks came the day before the Senate votes on its version of the stimulus bill. The House passed its version of the stimulus bill nearly two weeks ago — without a single Republican vote. If the measure passes the Senate, the two chambers will have to reconcile the differences between the two bills.

Obama urged Congress "to act without delay," saying that only the federal government can break the "vicious cycle" gripping the U.S. economy.

"It is absolutely true that we cannot depend on government alone to create jobs or economic growth. That is and must be the role of the private sector," he said.

More…

Posted at 12:46 AM (CST) by & filed under General Editorial.

Dear Friends,

Read this and you need not read any more ever, anywhere.

Save the file linked below. Each time you need me to hold your hand read this first. You will no longer need me.

I have in chapter and verse outlined to you what is coming and why.

This article is a maximus opus in line and verse, outlined in time and form and absolutely correct in content.

I met Mr. Armstrong in the early 80s. I know his story better than most. This is a man who has been persecuted for his knowledge. He is a modern day Livermore. Armstrong is the only true genius in finance. No one can qualify to tie his shoes.

He was incarcerated because of his talent by an all but now forgotten jurist. The why is forgotten. All that is remembered is someone’s belief he cost the IRS a large chunk of money.

Armstrong Economics:
The Coming Great Depression.
Why Government Is Powerless

It is frustrating to read so many comparisons of our current situation with 1929 while watching policy be set-in-motion to create spending on infrastructure. Everyone has their hand out looking for a bailout like a bunch of street burns pleading for money so they can get drunk or stay drunk. Almost nothing of what I have read is close to being accurate.  The scary part is depressions are inevitably caused by politicians who may be paving the road with good intentions, but are relying upon analysis so biased, we do not stand a chance.

The stock market by no means predicts the economy. A stock market crash does not cause a Depression. The Crash of 1903 was properly titled – “The Rich Man’s Panic.” What has always distinguished a recession from a Depression is the stock market drop may signal a recession, but the collapse in debt signals a Depression. This Depression was set in motion by (1) excessive leverage by the banks once more, but (2) the lifting of usury laws back in 1980 to fight inflation that opened the door to the highest consumer interest rates in thousands of years and shifted spending that created jobs into the banks as interest on things like credit cards.  As a percent of GDP, household debt doubled since 1980 making the banks rich and now the clear and present danger to our economic survival. A greater proportion of spending by the consumer that use to go to savings and creating jobs, goes to interest and that has undermined the ability to avoid a major economic melt-down.

The crisis in banking has distinguished depression from recession. The very term “Black Friday” comes from the Panic of 1869 when the mob was dragging bankers out of their offices and hanging them in New York. They had to send in troops to stop the riot. A banking collapse destroys the capital formation of a nation and that is what creates the Depression. The stock market is not the problem despite the fact it is visible and measurable and may decline 40%, 60% or even 89% like in 1929-32. But the stock market decline is normally measured in months (30-37) whereas the economic decline is measured in years (23-26). Beware of schizophrenic analysis that is often mutually contradictory or often antagonistic in part or in quality for far too often people think they have to offer a reason for every daily movement.

Our fate will not be determined by the stock market performance. Neither can we stimulate the economy by increasing spending on infrastructure any more than buying your wife a mink coat, will improve the grades of your child in school. We are facing a Depression that will last 23-26 years. The response of government is going to seal our fate because they cannot learn from the past and will make the same mistakes that every politician has made before them. Even if the Dow Industrials make new highs next week (impossible), the Depression is unstoppable with current models and tools.

Stocks & Consumers vs. Investment Banks

Let us set the record straight. The Stock Market is a mere reflection of the economy like looking at yourself in a mirror. It is not the economy and does not even provide a reliable forecasting tool of what is to come economically. We are headed into the debt tsunami that is of historical proportions unheard-of in history. There have been the big debt crisis incidents that have hobbled nations, toppled kings, and set in motion economic dark ages. It is so critical to understand the difference between the economy and the stock market, for unless you comprehend this basic and root distinction between the two, survival may be impossible.

To the left I have provided the Economic Confidence Model for the immediate decline. You will notice I did not call this the “stock market model” nor a model for gold, oil, or commodities. I used the word “economic” with distinct and clear purpose. I have stressed it does not forecast the fate, of a particular market or even a particular economy. It is the global economic cycle some may call even a business cycle. Please note that what does line-up and peaks precisely with this model often even to the specific day that was calculated decades advance is the area of primary focus. Yet the US stock market reached a high precisely with this model and then rallied to a new high price 8.6 months later. In Japan, the NIKKEI 225 peaked precisely on February 26th, 2007. This is not a very good omen. But there was something profound that turned down with the February 27th, 2007 target – the S&P Case-Shiller index of housing prices in 20 cities. February 2007 was the peak for this cycle in the debt markets – not the US stock market.

The stock market always bottoms in advance of the economic low. In fact, we will see new highs in the now even in the middle of a Great Depression. At least the 1929 cycle was more of a bubble top in stocks than what we have in place currently in the US stock market.  We still had the bubble top in the NASDAQ back in 2000, but this illustrates the point. There was a major explosive speculative boom. The bubble burst in 2000 and there was a moderate investment recession into 2002, but there was no appreciable economic decline that was set in motion because of that crash. Currently, we have a major high in 2007, but it was not a bubble top because it was not the focus of speculation. The real concentration of capital that created the bubble top, took place in the debt markets. This is the origin of the economic depression – not stocks and not the displacement of farmers because of a 7 year drought created by the Dust Bowl that invoked the response of the Works Progress Administration (WPA) in 1935. Keep in mind the stock market bottomed in the mid summer of 1932 when unemployment was not excessive from a historical perspective. The 25% level of unemployment came after the major 1932 stock market low that was followed by both the banking crisis after the election of FDR and before his fateful inauguration. The Banking Crisis came about because of rumors that Roosevelt was going to confiscate gold. Herbert Hoover published his memoirs showing letters written to Roosevelt pleading with him to make a statement that the rumors were false. He did not.

More…