Posted at 5:20 PM (CST) by & filed under Guild Investment.

Dear CIGAs,

The excellent Shadow Government Statistics economic service (shadowstats.com) makes the following statements today, January 16,2009 in a flash update.

“The annualized real contraction for fourth-quarter 2008 retail sales was 17.1%”

“Consistent with a still-deepening recession, fourth quarter 2008 production showed an annualized quarterly contraction of 11.5%, following an 8.9% contraction in the third quarter.”

“ A depression is defined [SGS] as a recession where peak-to-trough contraction exceeds 10%, a level currently exceeded in annualized terms by both fourth-quarter real retail sales and industrial production.”

SUMMARY

Since we at Guild Investment Management predicted several months ago that we were entering a moderate depression, rather than a recession during the current downtrend, few have agreed with our view. The above data by Shadow Government Statistics show that the trends in retail sales, which is considered a leading economic indicator, and in industrial production are strongly indicative that a depression is in the process of developing in the United States.

Respectfully yours,

Monty Guild
www.GuildInvestment.com

Posted at 3:58 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Gold was the recipient of “reflation” flows as money flowed back into the commodity sector today on news that the remaining $350 billion in the TARP was going to be released. That served to undercut safe haven flows into the dollar and definitely into the bonds, with commodities as a sector generally benefiting. As I wrote the other day, if you don’t like the current investor sentiment, stick around a day or so, it will flip 180 degrees and then do that same thing again a few days after that. Perhaps next week we go back to deflation paranoia. Who knows and who really cares at this point since all that matters in these markets is money flows – nothing else.

From a technical perspective gold bounced exactly where it needed to bounce in order to keep the technical charts from deteriorating. It did however run exactly into overhead resistance in today’s rally where it was summarily capped by the usual crowd. The bulls have dodged a bullet and deserve credit for their performance and grit but they need to force the shorts out of their defense line at $840 to give them a shot at $860. They are attempting to do that even as I write this commentary. Hats off to those fund managers who actually bought into the weakness in gold for a change instead of selling downward momentum.

While it is a bit difficult to see on the 12 hour chart, gold has actually been forming a reverse head and shoulders chart with one shoulder near $750 in early September 2008 and the head near the $700 level in late October and early November. The last shoulder  and this is ONLY A POTENTIAL shoulder is the low made yesterday. To confirm this, gold would need to break out above the $880 level in a convincing fashion. That once again serves to underscore the significance of that pesky $880 level.

For now, resistance stands at today’s high near $840 followed by stronger resistance between $855- $860. Support remains just above the $800 level.

The mining shares as indicated by the HUI and the XAU bounced off the 50 day moving averages and are now running into resistance near their down-trending 10 day moving averages. The HUI is attempting  to climb back above broken support near the 266 level but is encountering difficulty with the broader equity markets sinking back into negative territory. The XAU’s chart is actually better looking than that of the HUI as it managed to climb back above broken support near the 107 level but it too has run into selling in the zone between the falling 10 and 20 day moving averages at today’s session high.

Grains are all strongly higher today with Argentina’s drought news putting a firm bid under the soybean market which is effectively pulling wheat and corn along for the ride. That move in the grains has my attention as they have been tracking closely with gold’s overall performance.

Crude oil is lower today after violating support yesterday near the $35 level which makes the rally in some of the other commodities all the more noteworthy. I do hope that we are reaching the point where these various markets begin to trade on their own set of fundamentals rather than the mindless idiocy we have had to sit through watching index funds and hedge funds spit them all out en masse or buy them all up en masse. Crude needs to get above $40 in the February to have a shot at a bottom being formed.

Bonds had collapsed at one point today when the stock market was moving higher and safe haven flows abruptly reversed but as the equity markets faded and crude moved lower, the bonds began moving well off their lows. Judging from last evening’s Federal Reserve Custodial Accounts data, foreign Central Banks continue to GORGE themselves on US Treasury paper while continuing their exodus from US agency debt. As long as this FCB bank buying of Treasuries continues in such size, it is difficult to see the collapse of the bond market bubble occurring anytime soon. It will collapse however and when it does, the sound will be heard around the world as it will occur very quickly.

The dollar was stymied up between the 86 – 85 level which is the former support region from October and November of last year. Technically it looks like a failure to climb back above the 86 level quickly and the Dollar is headed back to 82 with a possible test of 80 occuring.

Enjoy your weekend and the holiday on Monday.

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

January1609Gold1230pmCDT.jpg

Posted at 5:21 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Yikes! Why is S&P picking on Spain with these numbers coming out of the US?

Best regards,
CIGA Richard B.

Treasury: deficit hits new record in just 3 months
Treasury: federal deficit already totals record $485 billion in first 3 months of budget year
Martin Crutsinger, AP Economics Writer
Tuesday January 13, 2009, 5:11 pm EST

WASHINGTON (AP) — The federal government already has run up a record deficit of $485.2 billion in just the first three months of the current budget year. And economists say the imbalance for the full year could easily top $1 trillion, pushed to that eye-popping level by the spending the government is likely to do to combat the recession and the most severe financial crisis in generations.

The Treasury Department reported Tuesday that the deficit for December totaled $83.6 billion, a sharp deterioration from a year ago when the government managed a surplus of $48.3 billion.

All the red ink comes from the massive spending out of the financial rescue program — $247 billion out of $700 billion spent so far — and a prolonged recession that has depressed tax revenues.

The overall deficit from October through December is the highest on record for a first quarter and surpasses the mark for a full budget year of $454.8 billion set last year.

More…

Dear Richard,

1. Because rating agencies now predate prostitution as the oldest occupation in human history.
2. Because if they down-rated the dollar they would have to close shop the next day.

Take your pick. I know you can add more.
Jim

Jim,

Another sickening example of the pre-hyperinflationary symptom of restricting bank data from the view of the people. Pass the Weimar baton.

CIGA Ken

BoE secret money printing
[Monday, January 12, 2009 | 0 comments ]

Billionmark comment

Weimar style policy is now global. With nothing backing paper currencies except other currencies disaster awaits. As Marc Faber says "citizens, who are not dumb, realize that the Central Banks are engaged in a contest to print the most money, to keep the cost labor low, the employment high and to erase the Nationial debts. This will destroy the currencies, confidence and create instability……I expect there maybe a panic into Gold and a scramble into physical gold"

from the UK Telegraph

The Bank of England will be able to print extra money without having legally to declare it under new plans which will heighten fears that the Government will secretly pump extra cash into the economy.

The Government is set to throw out the 165-year-old law that obliges the Bank to publish a weekly account of its balance sheet — a move that will allow it theoretically to embark covertly on so-called quantitative easing. The Banking Bill, which is currently passing through Parliament, abolishes a key section of the law laid down by Robert Peel’s Government in 1844 that originally granted the Bank the sole right to print UK money.

The ostensible reason for the reform, which means the Bank will not have to print details of its own accounts and the amount of notes and coins flowing through the UK economy, is to allow the Bank more power to overhaul troubled financial institutions in the future, under its Special Resolution Authority.

More…

Posted at 3:54 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

It was another one of those mass long liquidation days by index funds and hedge funds as nearly everything that remotely resembled a commodity or was associated with commodities was jettisoned in favor of paper IOU’s (also known as US bonds). About the only commodities that I could see that were in the plus column today were the grains, particularly the soybean market which found buying on drought fears out of South America and wheat which found support out of hard freeze fears. Corn went along for the ride. Other than that the continued idiocy in the futures markets continues with panic buying one day giving way to panic selling the next.

I know I risk sounding like a scratched CD but the hedge funds and index funds have created near chaos in the markets with no clear, durable signals being generated- the result is confusion and volatility that gives the lie to the efficient market theory. How can markets be the least bit efficient when commercial end users and legitimate hedgers cannot even use them because of the massive amounts of price foam being churned up by these out of control funds? You’ll remember that it was just a few days ago when near euphoria reined in the markets over the upcoming new stimulus plan – that euphoria sent the funds tripping and drooling all over themselves to establish longs – now we are back to manic depression and they are tripping and drooling over themselves running for the exits. Now imagine a bona fide commercial hedger attempting to formulate some sort of hedging plan to offload his risk and lock in profits while at the same time attempting to limit huge margin calls on that same hedge. My point is quite simple – the futures markets came into being as a mechanism to allow producers and end users to manage risk – that advent of speculators was designed to facilitate that end – we have now reached the point in my opinion where the entire purpose of the futures market has to be questioned. Either the regulators get off their butts and institute serious reforms in these markets, notably being a drastic curtailing of the position size of these players, or they risk having commercial end users begin to look at serious alternatives to using these markets for hedging purposes. If that were to happen in size (it is already occurring), all that will be left in the futures markets is funds playing against other funds. Then we will have nothing but casinos left. The biggest problem I see standing in the way of these reforms might very well be the commodity exchanges themselves who are now public companies and love the extra volume being generated by the incessant trading activity of the funds. That is good for exchanges SHORT term as it increases profits and makes members and shareholders happy. The problem is, like so much in the West these days, such an attitude sacrifices LONG term viability for short term gain. But enough of my little soap box rant for now.

Gold was caught in the crosswinds stirred up by the funds as this liquidation clashed with safe haven buying. It did not help paper gold any to see the technical breakdown in the HUI and the XAU whose charts have turned decidedly bearish. I have been mentioning the 260 level on the HUI and the 107 level on the XAU – those are well behind us now with the only hope the bulls now have is for support to emerge near the 50 day moving averages which come in near 241 for the HUI and 100 for the XAU. Failure there and we could see the HUI back down near the 200 level. The HUI and XAU must quickly get back above 260 and 107 respectively to turn the selling tide.

The commodity currencies, the Australian, Canadian and New Zealand Dollars, were all weaker against the US Dollar today although the Aussie managed to work upwards at one point and move into the plus column. Surprising strength was seen in the British Pound. The Swiss Franc was higher while the Euro came well off its worst levels of the session although is still lower against the greenback. Ongoing concerns over Europe’s economy and the downgrading of several member countries’ sovereign debt continue to weigh on the Euro. The Japanese Yen continued its ridiculous rise as further carry trade unwinding occurs there. One has to wonder when the apparently sleeping Japanese monetary officials are going to saunter out of their dens and inflict their vengeance on the specs who have done this to their yen. Having been on the receiving end of their forays into the market, all I can say is heaven help the yen bulls when this tiger finally comes forth. For now they continue to press their advantage against the monetary lords of Japan.

Bonds are back in full bubble mode after having bounced, stabilized and then said, “Let’s go back to the stratosphere where the air is cleaner”. They are currently trading between the 10 day and 20 day moving averages with the 40, 50 and 100 day all moving solidly higher. Whether the top is in will be seen if we can set up a retest of those recent highs above the 140 level. We may or may not get there; I simply am not sure and with the bonds’ behavior lately, who knows?

Technically gold bounced off of horizontal support just below the $810 level which also closely corresponds to the 100 day moving average. That level has to hold firm to prevent even more spec selling which could potentially take the market down below the $800 level. Resistance remains in place near yesterday’s high ($830) followed by $860.

Pulling back and looking at the weekly continuous chart, the 100 period moving average comes in near $798 with gold bouncing off of the 20 week moving average at $807. This serves to reinforce the technical significance of the region where today’s lows in gold were made.

The short term daily trend in gold is down while the intermediate term shows a down-sloping trendline drawn off the peaks made last year is still in effect. That line has served to cap upward movement and it is no coincidence that the bullion banks came in near the $880 level, which is where that line hit last week. They read the same charts we do, which is just another reason for the funds, who trade against them, to wise up and think for a change. The long term trend remains higher. Gold bulls will have to push prices back above $840 to send a bit of concern into the bear camp.

We still continue to see index fund liquidation related to that infernal commodity index reweighing trick. Seeing that we are entering the rollover period, the most likely course of action that the funds will take to rebalance their holdings will be to simply lift their longs in the February contract and simply not rollover some of them into the April or June. I would expect pressure coming on gold from that angle to cease after the rollover period ends in a couple of weeks. Seeing that the low point in open interest readings in the Comex gold market was made back in the second week of December last year when gold was trading near the $740 level, those funds that began building positions near that time still have some profits left that they can actually catch even with this rebalancing act. Those that came in late and chased prices higher get to see red on their gold trades, which serves them right for being so dense. Hedge fund managers – are you tired of losing money trading gold against the bullion banks – then start your buy ins into weakness and begin scale down buy programs instead of your losing strategy of chasing price both higher and lower. And if you wish to further your chances, then use some of your assets to take delivery of physical gold bullion from the Comex warehouses and hold it off the market.

Crude oil is flirting with a breakdown of strong double bottom support near the $35 level on the continuous chart. The spread between the front month crude contract and the March makes buying crude difficult for futures players during a rollover period – that’s why so many are up and leaving. Natural gas made a new yearly low in today’ session – how do you like that given that intensely bitter cold gripping the heavy gas consuming region of the upper mid West.  There is just too much crude and too much natural gas out there given the current levels of demand. We really need some more of this very cold weather to put a serious dent in the supply side of things. Technically however, if and this is a big IF, crude can bounce from today’s low and close higher either today or tomorrow, short term traders will view it as a bottom signal. It is just too soon to say as of the hour I am writing this.

Speaking of spreads, I mentioned that I would be monitoring the spreads between the front month gold contract and some of the back months to keep you informed on that backwardation issue which surfaced about a month ago. So far the structure in the futures market has not shown any backwardation occurring although the forward spreads remain tight.

May I once again please remind some of our readers that I am a private trader only and not an investment advisor nor do I accept phone calls from people asking for my opinions on various stocks or commodity markets so that they may trade accordingly. I welcome emails with comments from readers but please do not pester me with timing buys and sells nor with recommendations on various equities.

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

January1409Gold1230pmCDT.jpg

Posted at 3:03 PM (CST) 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 at 2:47 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Israel makes a major miscalculation.
Pakistan goes nuclear
Turkey is a victim.
It is all percolating.

Cyr: Turkey at crossroads as a nation
Submitted by SHNS on Tue, 01/13/2009 – 13:14.

At the start of the New Year, Russia publicly squabbles with Ukraine over the terms of shipping gas to the European Union, while Turkish police have announced the discovery of a very large weapons cache buried in a pine forest near Ankara.

The former dispute appears to be resolved for the moment. Ukraine has just agreed to shipping terms that Moscow has demanded. At the same time, steadily growing Russian nationalism is reflected in such high-handed handling of plentiful oil and gas resources. The collapse of the Moscow stock market has fueled the emotional fire encouraging such actions.

The Turkey case is very ominous. Government authorities have stated publicly that the arms are tied to a sizable plot to overthrow the Islamic government of the nation.

These two problems together provide the incoming Obama administration with an opportunity. Washington immediately should give high priority to Turkey as an alternate energy transshipment route. Turkey is a vital ally of the United States, second in importance only to Israel in the Middle East, but the Bush administration leaves office with our relations badly damaged.

Over the past two years, the Islamist Justice and Development Party (AKP) of Prime Minister Recep Tayyip Erdogan has ruled Turkey. The selection of former foreign minister and practicing Moslem Abdullah Gul as president reinforced fears of Islamic extremism and political instability. The president’s wife Hayrunnisa publicly wears the religious headscarf, formally banned in public buildings, and has become an iconic figure for the rise of religion in modern Turkey.

More…

 

Jim Sinclair’s Commentary

The following opinion on the Pakistan situation seems quite well informed:

"On another front, the seeming quiet between India and Pakistan is deceptive. I expect an out-of-the-blue strike by India on 4GW training camps in Pakistan, a Pakistani defeat and possibly a collapse of the Pakistani government in consequence. How many collapses of governments Pakistan can endure before the state itself crumbles is a key strategic question. The answer, I suspect, is not many more. Pakistan could offer Islamic 4GW forces an earth-shaking victory in 2009."

Click here to read the full article…

Jim Sinclair’s Commentary

I am in shock!

The Secretary of the US Treasury and President of the NY Federal Reserve Bank!

However after once again reviewing Mr. Geithner’s bio below, you know he will be confirmed regardless of tax problems.

Obama’s Treasury Pick Didn’t Pay Taxes
By JULIE HIRSCHFELD DAVIS

WASHINGTON (Jan. 14) – Revelations about Timothy Geithner’s tax problems derailed Senate Democrats’ plans Wednesday to speed him to confirmation as treasury secretary so he could be sworn in on Inauguration Day.

President-elect Barack Obama had hoped for Geithner to be approved quickly so he could join other officials in urgent efforts to revive the failing national economy beginning immediately after Obama’s own inauguration next Tuesday. Now, Geithner’s confirmation hearing isn’t scheduled until next Wednesday, with Senate debate and a vote some time after that.

A top Republican objected to a hearing this Friday for Geithner at the Senate Finance Committee after the panel disclosed he failed to pay $34,000 in taxes several years ago.

Still, Democrats and Republicans on the panel voiced strong support for Geithner, who was phoning senators individually to persuade them that his tax problems were the result of innocent mistakes, not deliberate attempts to avoid paying the Internal Revenue Service.

More…

Timothy F. Geithner

Timothy F. Geithner became the ninth president and chief executive officer of the Federal Reserve Bank of New York on November 17, 2003. In that capacity, he serves as the vice chairman and a permanent member of the Federal Open Market Committee, the group responsible for formulating the nation’s monetary policy.

Mr. Geithner joined the Department of Treasury in 1988 and worked in three administrations for five Secretaries of the Treasury in a variety of positions. He served as Under Secretary of the Treasury for International Affairs from 1999 to 2001 under Secretaries Robert Rubin and Lawrence Summers.

He was director of the Policy Development and Review Department at the International Monetary Fund from 2001 until 2003. Before joining the Treasury, Mr. Geithner worked for Kissinger Associates, Inc.

Mr. Geithner graduated from Dartmouth College with a bachelor’s degree in government and Asian studies in 1983 and from the Johns Hopkins School of Advanced International Studies with a master’s in International Economics and East Asian Studies in 1985. He has studied Japanese and Chinese and has lived in East Africa, India, Thailand, China, and Japan.

Mr. Geithner serves as chairman of the G-10’s Committee on Payment and Settlement Systems of the Bank for International Settlements. He is a member of the Council on Foreign Relations and the Group of Thirty.

Jim Sinclair’s Commentary

The COMEX is pulling your golden chair one more time.

Buying the near contract and taking delivery out of the Comex warehouse is your only weapon.

Gold Rush
Buying the Real Thing
Edited by ROBIN GOLDWYN BLUMENTHAL 
A look back at last week’s important events.

INVESTORS ARE TAKING A CUE FROM THE RAPPERS and adding more bling to their lives — not to hang around their necks, but to stash away in safes.

Physical gold is hot. Not gold stocks or ETFs, but the glittering stuff itself. You’ll read about it in our write-up of the latest Barron’s Roundtable, and the numbers are irrefutable. London-based World Gold Council said investment demand for gold, mainly bars and coins, surged 121% in the third quarter as investors rushed to safety.

But how, exactly, do you buy gold? Though you can visit a goldsmith and buy 24-karat jewelry, gold bugs favor bars, both big and small, and guaranteed coins issued by various world mints. Coins are easier to trade, but both coins and bars can be bought through hundreds of dealers’ sites, including onlygold.com, kitco.com and finest known.com. One site, goldmoney.com, even stores your gold.

Bars range in size from one gram to 400 troy ounces, while bullion coins come in weights of 1/20 ounce to 1000 grams. James DiGeorgia, the founder and publisher of goldandenergyadvisor.com, recommends the popular American Eagle or Buffalo coins. They generally fetch $25 to $70 above spot-gold prices, but you might score a better deal by buying directly from the U.S. Mint. DiGeorgia’s other advice: Never buy coins that are scratched.

More…

Jim Sinclair’s Commentary

Mumbai today:

India ‘notes Pakistan troop move’
By Sanjoy Majumder

BBC News, Delhi

The head of the Indian army says it has noted that Pakistan had moved some troops to its border with India in the wake of the Mumbai attacks.

Gen Deepak Kapoor acknowledged that there had been an increase in tension.

He said that Delhi was keeping all its options open but that military action would be the last resort.

Delhi believes the Mumbai attacks that killed more than 170 people were planned and executed from Pakistani soil. Islamabad denies involvement.

No state of alert

Addressing a news conference in the Indian capital Gen Kapoor said that Pakistan had moved some troops from the federally administered tribal areas along the Afghan frontier to its eastern border with India.

More…

 

Jim Sinclair’s Commentary

A 1.2 trillion dollar Federal Budget deficit which is just for starters, plus Pakistan should keep the new Administration busy.

Military Report: Mexico, Pakistan at Risk of ‘Rapid and Sudden Collapse’
Wednesday, January 14, 2009

Mexico and Pakistan are at risk of a "rapid and sudden collapse," according to a recent report from the U.S. Joint Forces Command.

The assessment comes as President-elect Barack Obama prepares to tackle international challenges including the conflict in Gaza, the wars in Iraq and Afghanistan and tensions between India and Pakistan.

"In terms of worst-case scenarios for the Joint Force and indeed the world, two large and important states bear consideration for a rapid and sudden collapse: Pakistan and Mexico," the report says.

A spokeswoman for the U.S. Joint Forces Command said the latest assessment was likely written before the Mumbai attacks which further inflamed tensions in South Asia.

The Joint Operating Environment report, meant to examine worldwide security trends, says Pakistan, in the event of such a rapid collapse, would be susceptible to a "violent and bloody civil and sectarian war" made more dangerous by concerns over the country’s nuclear arsenal.

The report says that "perfect storm of uncertainty" by itself might require U.S. engagement.

More…

Jim Sinclair’s Commentary

This is no joke. I am in Johannesburg with my African family doing just this.

2008_Before_And _After1

Jim Sinclair’s Commentary

God help us all!

The cost of bailouts will be no less than $17.2 trillion, and that will not make things alright.

1. This would never have happened if OTC derivatives did not exist.
2. Confidence is going to crack wide open, all at once, as if the world financial stepped into a hidden crevasse.
3. Hyperinflation is totally unavoidable – totally, absolutely, and without a shadow of a doubt.
4. Gold is the only answer. There is no other answer. Use it or lose everything you have and are.
5. The perps should be sent to one large island and then that island sent to hell.
6. This pervasive financial crime, OTC derivatives, is a CAPITAL crime that will in time be dealt with accordingly, if not by law then by the injured.
7. Long term unemployed get very angry.
8. The dollar is headed to .52 USDX
9. Gold, the value of insurance, is headed to $1200 then $1650 then to Alf’s more precise levels of:

Major THREE up from $700 to $3,500 (a Fibonacci 5 times the $500 low);
Major FOUR down from $3,500 to $2,500 (a 29% decline);
Major FIVE up from $2,500 to $10,000 (also a 4 fold increase, same as ONE)

Those of you not insured in gold are simply, blind, silly fools

Banks in Need of Even More Bailout Money
By EDMUND L. ANDREWS and ERIC DASH
Published: January 13, 2009

WASHINGTON — Even before word came on Tuesday that Citigroupmight split into pieces to shore up its finances, an unpleasant message was moving through Congress and President-elect Barack Obama’s transition team: the banks need more taxpayer money.

In all likelihood, a lot more money.

Mr. Obama seems to know it; a week before his swearing-in, he is lobbying Congress to release the other half of the financial industry bailout fund. Democratic leaders in Congress seem to know it, too; they are urging their rank and file to act quickly to release the rescue money. And Ben S. Bernanke, the chairman of the Federal Reserve, certainly knows it.

On Tuesday, Mr. Bernanke publicly made the case that one of the most unpopular and most scorned programs in Washington — the $700 billion bailout program — needs to pour hundreds of billions more into the very banks and financial institutions that already received federal money and caused much of the credit crisis in the first place.

The most glaring example that the banking system needs even more help is Citigroup. Though it already has received $45 billion from the Treasury, it is in such dire straits that it is breaking itself into parts.

Like many banks, Citi is finding that its finances keep deteriorating as the economy continues to weaken.

More…

 

Jim Sinclair’s Commentary

Pakistan today.

Pakistan dismisses Indian data as ‘not evidence’
The Associated Press
Wednesday, January 14, 2009

ISLAMABAD, Pakistan: Pakistan’s prime minister has played down the significance of a dossier handed over by India about the Mumbai attacks, saying it was just information and "not evidence," state media reported.

"All that has been received from India is some information. I say information because these are not evidence," Yousuf Raza Gilani told parliament late Tuesday, according to the Associated Press of Pakistan.

Gilani’s remarks were likely to anger New Delhi, which says the dossier provides evidence that Pakistani militants staged the November slaughter of 164 people. India specifically blames Lashkar-e-Taiba, a militant group believed to have links to Pakistani intelligence.

Pakistan only recently acknowledged that the only surviving Mumbai gunman was Pakistani, but it insists none of its state agencies played a role in the attacks. Under international pressure, Pakistan has detained some suspects allegedly linked to the attacks, while repeatedly calling on India to provide evidence to allow legal prosecutions.

The dossier, handed over on Jan. 5, includes transcripts of phone calls allegedly made during the siege by the attackers and their handlers in Pakistan. Previously, India had given Pakistan a letter from the lone surviving gunman, Mohammed Ajmal Kasab, that reportedly says he and the nine other gunmen were Pakistani.

More…

Posted at 4:59 AM (CST) 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…