saveyourassetsfirst3 |
- Common Sense Video — The Fed Has Just Screwed You
- GEAB N°67 is available! Global systemic crisis/October 2012 -The global economy sucked into a black hole and world geopolitics heated to white-hot: The seven key factors of an unprecedented double shock
- How QE3 Will Make The Wealthy Even Wealthier While Causing Living Standards To Fall For The Rest Of Us
- A new gold standard?
- The QE2 Reference Price Identifies The Strongest Iron Ore And Metallurgical Coal Plays
- Links for 2012-09-15 [del.icio.us]
- Betting against Gold, by De Gaulle
- Gold mining stocks have outperformed the Dow since 1920
- Sprott Raises $392 Million For Gold for PHYS - Dalio Says Shift Assets Into Gold
- Silver Technicals
- Silver Bull Seasonals
- Coming Soon: Gold Over $5,000
- How High Will Silver Go
- Any Regrets?
- Egan-Jones downgrades U.S. rating on QE3 move
| Common Sense Video — The Fed Has Just Screwed You Posted: 16 Sep 2012 11:49 AM PDT Share/SavePeter Schiff expounds on last week's Fed action of unlimited money printing. He puts Ben Bernanke's desperation into perspective. His policy actions are not original and they are absurd based on what we have just gone through. The economy will not improve, inflation will accelerate and the dollar will collapse. The best that Bernanke can |
| Posted: 16 Sep 2012 10:48 AM PDT - Public announcement GEAB N°67 (September 16, 2012) -  As LEAP/E2020 anticipated since the end of 2011, the end of summer 2012 marks the beginning of the revival for Euroland with the emergence of a positive dynamic fed by two lasting phenomena: first, the progressive operational installation of the instruments bitterly discussed and decided upon during the last 18 months and, secondly, the visionary spark brought by the political changes of the last six months which have put Euroland's medium to long term future back in the middle of the decision-making process. The Euro's progress these past weeks offers a perfect illustration of the phenomenon (1). That being said, Europe will be in recession for the next six to twelve months. It just goes to show that the only good news that we announced in the June 2012 GEAB issue is far from being miraculous. In a certain sense, it's even the contrary, since henceforth it's no longer possible to hide the global economy's tragic state behind the pretext of the "Euro or Greek crisis". The more Euroland advances constructively, the more the "Potemkinien" (2) character of the US, Chinese, Japanese and Brazilian... economies' « health » will show itself. The tree will no longer hide the forest, namely that all the major global economies are entering recession or slowing growth simultaneously, leading the socio-economic and financial world into a black hole. At the same time summer 2012 will have marked a major acceleration in world geopolitical dislocation with a Syrian conflict which becomes more dangerous for the Middle East and the world day by day (3), Israeli-Iranian tension which is ready to explode at any time, and widespread testing of declining US power – from the China Sea to Latin America via the whole Muslim world. The strategic-military world is heated white-hot as the massive resumption of arms sales worldwide illustrates for that matter, with the United States supplying 85% of the total (4).  For these reasons, LEAP/E2020 maintains its June 2012 Red Alert and estimates that, by the end of October 2012, the global economy will be sucked into a black hole against a backdrop of world geopolitics heated white-hot. Suffice it to say that the coming weeks will, according to our team, carry the planet away in a hurricane of unprecedented crises and conflicts. So, in this GEAB issue, LEAP/E2020 sets out the list of the seven key factors of this double shock without modern historical equivalent: In addition, this GEAB issue contains an anticipation of the cumulative impact of the crisis and the Internet on European retail trade, predicting a loss of 2.5 million jobs by 2015. This issue also contains the first of a series of three anticipations on the risks of a social explosion in Europe, the United States (GEAB N°68) and China (GEAB N°69). We decided begin with Europe which, according to our researchers, should experience "times of riots in the first half of 2013", with of course big differences between European countries. Also, you will find two GEAB Indices in this issue, the GEAB $ Index and the brand new GEAB € Index, which will henceforth appear three times a year. And, of course, there is the GlobalEurometre which takes the pulse of Europeans' views on key subjects. This month our recommendations concern currencies ($, €, £, Yen, Yuan), gold, energy and basic foodstuffs, stock exchanges and life assurance. Finally, you will find information on the programme for the third Euro-BRICS seminar organized in Cannes by LEAP, in partnership with the MGIMO on September 27th/29th, 2012 and a GEAB subscriber special offer for the online training in political anticipation organized by our partner FEFAP. The very painful end of the US anaesthetic is at the crossroads of the seven key factors of a double shock of the coming weeks Because it is indeed that. As we have underlined on many occasions in the GEAB, the United States has, since the beginning of this crisis, refused to face reality (5) by having increasing recourse to financial, monetary,… (and military) subterfuge to try and mitigate the consequences of the crisis. All this however is proving to be ineffective at the end of summer 2012, in spite of the trillions of Dollars thrown down what is proving to be a bottomless hole. The best proof is the Fed's September 13th decision to maintain its Operation Twist programme of Treasury repurchases by adding to it an unlimited programme (in time and amount) of mortgage backed securities repurchases (40 Billion USD/per month) to try and revive the US property market and, through the latter, employment and consumption. The Fed is aware that this decision will cause a backlash and damaging consequences internationally. In fact it has been hesitating for months ahead of a new QE3 (6). But, in trying to avoid a socio-economic implosion and a stock exchange collapse on Wall Street ahead of the November 2012 elections (7) whilst trying to save its own credibility under heavy attack from the Republican camp, it chose "Psychological Easing" rather than "Quantitative Easing". The Fed is increasingly becoming the key player in the US property market, thus persisting in confusing the problems of liquidity and solvency. US households don't have any more money to buy or build houses (8). Mortgage interest rates won't change anything here. Only Wall Street, for a certain time, will be able to continue surfing on record levels until one "beautiful morning" everything collapses due to a sudden awareness that the real economy is sinking into depression. Indeed all the signals are already on red: employment isn't moving up, the jobs created are paid very much less than those lost (9), poverty is exploding throughout the country (10), … and the US multinationals (11) have increased announcements of falling profits for the second half of 2012 and 2013, returning to the levels of 2008/009, typical of a recession period (12).  The US political system's current and future impotence (13) in facing its deficit problems (14) combined with « sequestration » (15) of the Federal budget (16) the effects of which are already making themselves felt throughout the US economy (as we had anticipated from spring 2012) (17), will turn the coming weeks into an endless succession of bad economic news (18) … against a backdrop of increasingly less well-managed geopolitical challenges. Because the anaesthetic is finished on this front as well! It only took just a year for all the perverse effects of the 2011 Western attack on Libya to appear: from the assassination of the United States ambassador to Libya to the anti-US riots throughout the Moslem world, frankly one can't deduce a successful policy of "accompaniment" of the Arab revolutions. The fierce Russian and Chinese will to support the Syrian regime against Western and Gulf monarchies' attempts to overthrow it (19) has not only wrecked any positive dynamics at the UN Security Council but has turned itself into a test of US power in the Middle East. Finally, it's the whole of East and South-East Asia (Japan, Taiwan, Philippines, South Korea,…) which, through the conflicts over numerous small islands, is in the process of testing the American capacity to stay put, face to face with China (20), an Asiatic power. And they are evaluating in real time what remains of US power in the region. By the beginning of 2013, their conclusions will recombine the alliances and allegiances inherited from the Second World War. And even the "back-yard" of the United States (according to the Monroe doctrine), namely Latin America, has undertaken to collectively face multi-decade US geopolitical positions: the exclusion of Cuba from trans-American fori and questioning of the war on drugs, the pillar of US interventionism in Latin America for more than forty years (21). Let's quote Europe also as an anecdote, since Euroland's accelerated integration de facto constitutes an ousting of US influence at the heart of European construction. Beginning in 2013, the IMF (i.e. Washington) will certainly be never invited again to deal with intra-Euroland problems as it is the case today with Greece. Even as regards defence, the surprise announcement of a possible BAE Systems – EADS merger, with EADS as the major shareholder (22), illustrates the end of an era when defence had to be transatlantic with the United Kingdom in charge. Whereas, from now on, BAE Systems is fighting for its life (23).  --------- Notes: (1) See previous GEAB issues. (2) See Wikipedia. (3) Source: Yahoo/Reuters, 15/09/2012 (4) Especially in the Persian Gulf. Source: New York Times, 26/08/2012 (5) Sources: New York Times;, 14/08/2012; Financial Sense, 24/08/2012 (6) Sources: CNBC, 14/09/2012; Market Watch, 29/08/2012 (7) The Fed has therefore decided to support Barack Obama ultimately much closer to it than the new Republican wave. Not very surprising since Mitt Romney announced that he wouldn't give Ben Bernanke a further term in office if he were elected. Source: Market Watch, 23/08/2012 (8) Source: USAToday, 14/09/2012 (9) Sources: USAToday, 21/08/2012; al-Jazeera, 20/08/2012; New York Times, 31/08/2012 (10) Sources: USAToday, 23/08/2012; Bloomberg, 10/09/2012; Bloomberg, 05/09/2012 (11) And they aren't the only ones. Even the luxury goods industry, primarily European, is starting to panic. Source: Yahoo/Reuters, 14/09/2012 (12) Source: Money News, 10/09/2012 (13) Source: Der Spiegel, 17/08/2012; USAToday, 20/08/2012 (14) The budget deficit is soaring towards new records. Source: ZeroHedge, 10/09/2012 (15) Automatic cuts in the defence and welfare budgets. (16) An agreement doesn't seem possible either on automatic cuts, or on the end of tax reductions. Source: CNBC, 11/09/2012 (17) Source: Reuters, 07/09/2012 (18) Of which growing damage to its commercial competitiveness, a priority of president Obama's however. And, of course, the numerous US credit downgrades of degradations … but frankly, everyone knows that already, except the blind who amass US Treasury Bonds. Sources: Les Affaires, 11/09/2012; Market Watch, 14/09/2012; Market Watch, 14/09/2012 (19) The United States is increasingly dependent on Saudi oil. Source: New York Times, 16/08/2012 (20) Sources: Der Spiegel, 14/09/2012 (21) Source: CIP Americas Program, 14/08/2012 (22) Let's not be mistaken here: BAE Systems is fighting for its life in this operation, not EADS. As we pointed out in the GEAB N°66, BAE Systems is one of the companies which will be strongly impacted by the Pentagon's budgetary reductions; not only because 20% of its turnover is with the US government but also, because it's a non-American company, its US competitors would, without any doubt, put it completely on the sidelines in these lean years. The USA-UK "special relationship" is a mild delirium which David Cameron and George Osborne must still talk about at the pub in the evening; but it no longer has any more reality on the American side. However the other large customer of BAE Systems is the British government which has massively cut its military expenditure. From where a question of survival for one or two years maximum for BAE Systems… and the only possible option: Europe, or rather Euroland with EADS. (23) Source: The Telegraph, 14/09/2012 |
| Posted: 16 Sep 2012 10:03 AM PDT 
Of course not. This time the Federal Reserve is focused on buying mortgage-backed securities. Yes, the same financial garbage that helped cause the last crisis. The Fed plans to gobble up tens of billions of dollars of that trash every month from now on. But will the Fed pay true market value for those mortgage-backed securities? If you believe that, I have a bridge to sell you. So this is going to be a huge windfall for some people, and that does not include us. Not a single penny of this 40 billion dollars a month will go directly into our hands. The theory is that it will "filter down" to us eventually. But that hasn't happened with previous rounds of quantitative easing. So where does the money go? A recent CNBC article discussed a very interesting report from the Bank of England about the effects of quantitative easing....
Wow. Who benefits from quantitative easing? According to the Bank of England, it is "mainly the wealthy" who benefit. As I noted the other day, Donald Trump said essentially the same thing when he told CNBC the following....
As I already discussed above, a lot of quantitative easing money gets into the financial markets where it pumps up the prices of financial assets. But not all of it goes there. We were told that the whole idea behind quantitative easing was that it was supposed to get banks lending again, but this has not happened. Instead, banks are sitting on unprecedented amounts of money. Just look at how the first two rounds of quantitative easing have caused excess reserves being held by banks to explode from close to zero to over 1.5 trillion dollars....
Of course one of the biggest problems is that the Federal Reserve is still paying banks not to lend money. Yes, you read that correctly. The Federal Reserve is paying banks to park money with them. So instead of risking their money by lending it out to us, the banks can just park it at the Fed and make risk-free profits for as long as they want. Must be nice. If the Federal Reserve really wanted banks to start lending again, all the Fed has to do is to stop paying banks not to lend money. But of course if more than 1.5 trillion dollars suddenly started flooding into our economy (especially after you consider the multiplier effect) we would be dealing with nightmarish inflation unlike anything we have ever seen before. So if you want to know why inflation was not even worse after QE1 and QE2 it is because more than a trillion and a half dollars is being parked with the Fed. So did QE1 and QE2 do any good for average Americans? Let's go to the charts. This first chart shows that the percentage of working age Americans with a job has stayed extremely flat since the end of the last recession. Does it look like QE1 and QE2 made a difference to you? I don't see any difference....
Okay, but what about new home sales? Did QE1 and QE2 help them? Nope....
But the mainstream media is still buying the baloney the Fed is pushing. The mainstream media is promising us that home sales will soon rise and that lots of new jobs are on the way. Sadly, the truth is that things have steadily gotten worse for average Americans over the past 4 years despite all of the money printing the Fed has been doing. If you doubt this, just read this article. But this is all that Ben Bernanke seems to have left. When printing money doesn't work, his answer is to print even more money. QE3 is likely to cause agricultural commodities and the price of oil to rise even further. So unless you can convince your employer to give you a corresponding raise, this is going to mean that your paychecks are not going to go as far as they did before. And so that means a lower standard of living. In a recent article, Bruce Krasting issued an ominous warning....
In addition, the policy of the Federal Reserve of keeping interest rates as low as possible is absolutely crippling the finances of many retirees. Even the former president of the Federal Reserve Bank of Atlanta, William F. Ford, recognizes this....
Just about everything that the Federal Reserve does these days is bad for ordinary Americans. But the Fed is not going to stop. The Fed is addicted to money printing now, and as a recent article by Peter Schiff explained, the Fed is just going to "up the dosage" until it gets what it wants....
This is complete and total incompetence by Ben Bernanke and his cohorts over at the Fed. Economist Marc Faber believes that Ben Bernanke should resign, and I agree with him....
And yes, a crash is coming. Bernanke can try to put it off for a while, but every action he takes is just making the eventual crash even worse. And some in the financial community clearly recognize this. For example, credit rating agency Egan-Jones downgraded the credit rating of the United States to AA- on Friday. The primary reason they gave for the downgrade was QE3. Ben Bernanke and the Federal Reserve are destroying the U.S. dollar and destroying our financial system for a short-term economic sugar high. It is utter insanity. That is why we desperately need to get the American people educated about the Federal Reserve system. It is at the very heart of our economic problems and yet neither major political party is willing to blame the Fed for the problems that it is causing. A bunch of unelected bankers that are not accountable to the American people are running our economy into the ground and the American people do not even realize what is happening. Please share this article with as many people as you can. Hopefully we can get the American people to understand that more money printing is definitely not the solution to our problems.
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| Posted: 16 Sep 2012 07:00 AM PDT The US Republican Party recently announced its intention to set up a 'gold commission', to examine the feasability or not of returning to a gold standard. This raises important questions, ... |
| The QE2 Reference Price Identifies The Strongest Iron Ore And Metallurgical Coal Plays Posted: 16 Sep 2012 02:32 AM PDT By Dr. Duru: Last week, I demonstrated how the timing of QE2 provided a useful reference point for buying Freeport-McMoran (FCX) as part of a coming revision of the commodity crash playbook. In this piece, I show how the QE2 reference price can be used to separate the stronger from the weaker plays on iron ore and metallurgical coal (also called coking coal). The QE2 reference price has not served as a floor for most of the stocks in this space. This behavior served as an important reminder that the QE2 reference price served as the starting point for buying into a crash/sell-off. The good news is that using this reference price significantly increased the risk/reward of trading these stocks given all but the hottest agricultural stocks eventually gave up all their QE2-inspired gains by 2012. In a future piece, I will use this important lesson in revising the commodity crash playbook for Complete Story » |
| Links for 2012-09-15 [del.icio.us] Posted: 16 Sep 2012 12:00 AM PDT
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| Betting against Gold, by De Gaulle Posted: 15 Sep 2012 11:30 PM PDT |
| Gold mining stocks have outperformed the Dow since 1920 Posted: 15 Sep 2012 11:30 PM PDT |
| Sprott Raises $392 Million For Gold for PHYS - Dalio Says Shift Assets Into Gold Posted: 15 Sep 2012 11:00 PM PDT Jesse's Cafe |
| Posted: 15 Sep 2012 11:00 PM PDT |
| Posted: 15 Sep 2012 11:00 PM PDT |
| Posted: 15 Sep 2012 07:02 PM PDT EM rocks the technicals that put Gold over $5,000 per ounce in the not so distant future. from endlessmountain: ~TVR |
| Posted: 15 Sep 2012 07:01 PM PDT BJF's next installment of the Office series, suggests silver could "kite away" soon. from brotherjohnf: ~TVR |
| Posted: 15 Sep 2012 11:51 AM PDT For not buying platinum when it was relatively "cheap"? How much of the recent gains are due to the trouble with the SA miners and how much is an overall market function; "a rising tide effects all PM boats"? I just have a very small amount of Pt, enough just to say I have some and the palladium that I have is just enough for my tastes, as a small position in PGMs. That experience was sufficient to keep me from buying more Pt, when the price was lower. If I were smart, I should dump the Pd now, but like a dumazz, I'll probably keep holding on to it. :D |
| Egan-Jones downgrades U.S. rating on QE3 move Posted: 15 Sep 2012 10:38 AM PDT Egan-Jones Ratings Co. said Friday it downgraded its U.S. sovereign rating to AA- from AA on concerns that the Fed's new round of quantitative easing, or QE3, will hurt the U.S. economy. The ratings agency said the Fed's plan of buying $40 billion in mortgage-backed securities a month and keeping interest rates near zero does little to raise GDP, reduces the value of the dollar, and raises the price of commodities... Read |
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