Články s tagem ‘Hat Trick Letter’

Hat Trick Letter – listopad, 2.část

Sobota, Prosinec 3rd, 2011

První část výňatků z listopadového vydání Hat Trick Letter je k dispozici tady. Byla tam řeč o bankách, nemovitostech a japonském jenu.  V druhé části se dočtete o ropě a drahých kovech.

 

Ropa

THE CRUDE OIL COULD REACH $150 PER BARREL IF PERSIAN GULF TENSIONS ERUPT INTO ARMED CONFLICT. MY FORECAST IS FOR NO WAR, SINCE IT WOULD BE MUTUALLY DESTRUCTIVE. CHINA OFFERS A PROTECTIVE BLANKET ON THE GULF REGION. THE RISE OF CRUDE OIL PAST $100 PER BARREL INDICATES THAT DEFLATION THREATS ARE FADING, REPLACED BY A THREAT OF WAR.

As preface, notice that the crude oil price has risen from $77 to above $100 despite the settlement of violent war in Libya. Their oil output is slowly ramping up. The motive for that war was to steal Qaddafi’s $90 billion held vulnerably in US, London, and European banks. The money was badly needed by the captains on sinking structures. If regional tensions escalate in the Gulf, the crude oil price might surpass the $150 level again. War involving Iran could lead to supply disruption and a mad race to hedge against a systemic event. Among global supplies, about 30% of crude oil passes through the Straits of Hormuz. A wider war would interrupt such shipments, and lead to higher costs of insurance and shipping. My view has been steady and stubborn over the last seven years. Any attack on Iran for whatever reason, to squash their nuclear program or to punish them for Iraqi insurgence, would result in a flash retaliation that would flatten the nation conducting the attack, even if a US ally. No nation, however irrational or suffering from internal disorder, is bent on suicide. So far since 2004, the annual hubbub that comes every August has not resulted in any Iranian attacks. Smart people have been wrong for years on end.

Maybe as an extension of the Arab Spring, some sort of attack on Iran will come. But the Jackass doubts it, since too commonly discussed. The indicator that is most troubling is the surge in crude oil price above the $100 level. It could mean that substantial hedging has been put on against the USDollar and Euro, two major currencies in dire straits fundamentally with budget deficits and insolvent banking system woes. But the rising oil price could instead be a preliminary signal of massive bets in favor of a wider war in the Gulf region.

Sinopec agreed to pay $3.54 billion for a 30% stake in the Galp Energia unit in Brazil. The price tag was a little lower than expected, but the deal is huge. Asia’s largest refiner China Petrochemical took the major stake in Galp Energia Brazilian unit in the nation’s largest overseas acquisition this year. Chinese energy companies have bid at least $16 billion for overseas oil & gas companies and deposits in 2011, to expand its reserves and supply line. The Galp subsidiary has an important claim to the Santos Basin discovery offshore Brazil, one of the two biggest discoveries in the western hemisphere since 1976. Galp is a Portuguese firm listed in theLisbon exchange, the nation’s largest oil firm. Some controversy arose from the valuation of the deal. The entire Brazilian business owned by Galp had been valued at $15.7 billion. Contrast that figure to the $12.5 billion enterprise value for Galp inferred to its unit after the deal. Galp has stakes in four offshore blocks in Santos Basin of Brazil, including a 10% share in Lula, formerly known as Tumi. It stands as the largest crude discovery in the Americas since the Cantarell field of Mexico in 1976. Lula contains an estimated 6.5 billion barrels of recoverable oil and equivalents. Galp boasted its legitimacy as a major player in offshore Brazil oil, ensuring development of the company assets.

China inked a deal just one month ago. China Investment Corp invested EUR 2.3 billion (=US$3.1 bn) in a subsidiary of GDF Suez, related to oil & gas production and exploration. Sinopec Group also paid $7.1 billion for a stake in the Brazilian unit of Repsol YPF last year. Repsol is a Spanish oil giant. China has a string of deals in recent years. Sinopec bought Addax Petroleum Corp for CAN$8.3 billion in 2009 to gain reserves in Kurdistan (disputed province of Iraq) and West Africa. Sinopec might submit a bid for a stake in the Angolan operations of Marathon Oil. Deepwater exploration by a few multi-national giants off the Angolan coast have made the country the second biggest African oil producer after Nigeria.

 

Drahé kovy

CENTRAL BANKS LOADED UP WHEN THE SEPTEMBER CHEAP GOLD PRICE WAS HANDED TO THEM, OR CREATED BY THEIR AGENTS. THE KEY WAS NOT ONLY VOLUME BUT ADDITIONAL PLAYERS. THEY SEE THE RUIN IN THEIR OWN MONETARY SYSTEM. THEY ARE DIVERSIFYING OUT OF THE STANDARD USTBONDS AND EURO BONDS.

Central Bank Gold purchases made a 40-year high in 3Q2011, in response to the sweet low price made available in September against a backdrop of magnificent sovereign bond destruction in secondary nations. The sharp price decline enabled them to shift to bullion in a diversification tactic. The net +148.4 ton addition in the month of September was much greater in revision, enough to surprise veteran traders. The data was published in a quarterly report by the World Gold Council, which declined to identify of the central banks behind the majority of the buying. They did mention that a “a slew of new entrants emerged wishing to bolster gold holdings.” The expanding breadth of buyers is great news for the gold market, as the lesser nations are noticing the ruin in the global monetary system. Gold purchases among central banks was at the highest level since the group surged as a net buyer of the precious metal in 2Q2009, according to the quarterly report. Central banks and other official institutions had bought 66.5 tons of gold in the second quarter and 22.6 tons in the third quarter of 2010. So the Q3 purchase was more than double the Q2 total in a grand acceleration. They notice that currency debasement through monetary expansion has not borne a solution. They notice that new mountains of debt do nothing to remedy the damage from excessive debt and the associated bubble & bust cycles. They are diversifying out of USTBonds and EuroBonds. Given the large volumes involved, central banks are important drivers of the gold market. They are tight lipped about their maneuvers naturally.

JPMORGAN TRIPLED ITS REGISTERED SILVER INVENTORY IN AN MYSTERIOUS OVERNIGHT SUCCESS. THE GAIN IS ROUGHLY EQUAL TO THE UNDELIVERED C.O.M.E.X. VOLUME RELATED TO THE MF-GLOBAL FIASCO THEFT. THE METAL WAS PROBABLY DIVERTED TO THE JPMORGAN VAULTS WITH REGULATOR BLESSING. BUT IT COULD BE MORE BASIC SEIZURES OF S.L.V. INVENTORY FROM THE EXCHANGE TRADE FRAUD. A BELIEF IS FORMING THAT JPMORGAN ACTED DESPERATELY TO ACQUIRE SILVER, EVEN IF BY SABOTAGING MF-GLOBAL, IN ORDER TO MEET DECEMBER HUGE SILVER DELIVERY DEMANDS. THE SUPPLY WILL BE TIGHT IN DECEMBER.

On the November 16th update to the COMEX silver inventory, JPMorgan has made a massive adjustment of physical silver into its registered vaults. They moved over one million ounces from Eligible into Registered overnight! No interruption with their operations, even perhaps some exploitation of the COMEX from the MF Global shock and vomits. The actual detail is JPMorgan adjusted 1,103,280 ounces out of Eligible vaults, and into Registered vaults on the official inventory tally. Their Registered inventory tripled from 557,265 ounces to 1,660,545 ounces last Tuesday! They choose not to explain their good fortune in defiance. One should conclude that MF Global events are good for JPM business. Maybe the giant criminal titan is preparing for substantial delivery demands coming due in December, doing what is required. The similarity between the 1.1 million ounce adjustment into Registered and the 1.4 million ounces of Registered silver that remain blocked for delivery due to the MF Global fiasco is striking. Do not expect the CFTC regulators to look into the diversion of metal due to be directed into client hands, hardly a priority. Regardless, the Morgue is moving to prevent a COMEX default due to the 1.4 moz being unavailable for physical delivery.

The flood of Delivery Notices will come. Clients realize they do not want to end up like Gerald Celente with empty pockets and alert minds. Witness the next stage marred by massive loss of confidence in the paper COMEX market, triggered by the theft of client assets at MF Global. Once confidence is lost in the paper market, it is essentially game over. The next stage, gradually to appear, will be a Cash & Carry market without margin, where orders are placed, money is deposited, and product is hauled away like a hardware & building supply store. Although it is easy to point the finger at MF Global, one should never lose sight of the fact that the easier and less conspicuous method of supplying inventory from the back door is to raid the SLV Silver Exchange Traded Fund. It too is a gigantic fraud. The JPMorgan custodian shorts the SLV shares, and takes silver bullion off the loading dock in the middle of the night. Investors in SLV and GLD are some of the dumbest and laziest sacks the Jackass has ever seen. The custodian of the SPDR Gold Trust is JPMorgan, and people should know that fact. Adam Hamilton is a trusing fool.

Put aside questions about the verifiability and validity of the reported COMEX inventory of Gold & Silver, from which the JPMorgan benefit is derived. The sheer size of the reported inventory move by JPMorgan is unusually large. It suggests that JPMorgan is anticipating the required delivery of mammoth silver volume for the December delivery month. Some analysts estimate that JPMorgan is likely short at least 17,000 of the current 34,000 in recorded Open Interest, equal to 85 million ounces. There are still eight trading days until the First Notice day for December silver, which is November 30th. The OI could decline between now and then to a considerable degree. The naked shorting ambushes that took the Silver price below 32 tend to reduce positions as the victims are forced to liquidate. JPM must reduce the futures contract positions much more, in big liquidations from vast illicit shorting. Even with the newly arrived silver in inventory, the situation calls for JPMorgan to be in a very difficult spot for delivery. The silver inventory supply could be very tight this month.

CHINA IMPORTED A HUGE AMOUNT OF GOLD. THE SEPTEMBER VOLUME WAS HALF OF THE ENTIRE 12-MONTH TOTAL FOR THE ENTIRE YEAR 2010.

China has taken advantage of the big September price Gold decline. Their Gold imports hit a record high. Once more the so-called American experts were dead wrong. They are shills, not analysts. They expected a liquidation cascade in China, where citizens would dump all holdings at the first hint of deflation. They were supposedly loaded to the gills in gold. The Financial Times reported that “Chinese gold imports from Hong Kong, a proxy for the country’s overall overseas buying, leaped to a record high in September, when monthly purchases matched almost half that for the whole of 2010. After hitting a nominal all-time high of $1920 a troy ounce in early September, the yellow metal fell to a three-month low of $1534 an ounce later in the month. Chinese investors snapped up the metal as prices fell.” The natural bid under gold will remain solid, even if the Shanghai stock market suffers some downdrafts and declines. The main sellers were the usual suspects, the paper merchants with their illegal naked shorting, selling metal they do not own and cannot locate on the other side of the trade. Also, some big players like the Paulson Fund were victimized, motivated by their Sino Forest blunder and liquidation pressures.

DUBAI CONTINUES TO ENCOURAGE ITS CITIZENS TO BUY GOLD. NEW  COMMEMORATIVE COINS ARE BEING PROMOTED FOR SAVINGS PROGRAMS.

Dubai has launched a popular Financial Incentives Program to encourage citizens to invest in physical gold. Such a program would never occur in the United States, the center of false money and active propaganda against valid money. JRG Intl Brokerage DMCC, a leading broker and clearing member of the Dubai Gold & Commodities Exchange, has put forth a innovative scheme to encourage a savings culture through systematic investment in new gold coins labeled Visions of Dubai. The event took place on 11 November 2011. The brokerage firm will offer information support. The new commemorative coins depict as souvenirs how Dubai contains visionary leadership for the Emirates. Some coin images Shaikh Mohammed bin Rashid Al Maktoum on one side, while Burj Al Arab is engraved on the other. Other coins in the series feature landmark images of Dubai that identify the emirate. The initiative can only add to demand.

 

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up information not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.proinvestory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

 

 

Hat Trick Letter – listopad, 1.část

Středa, Listopad 23rd, 2011

Předkládáme výňatky z první části. Výňatky z druhé budou následovat cca za týden.

 

Američané stěhují své vklady od velkých bank

AMERICANS ARE REMOVING FUNDS FROM THE BIG US-BANKS. THE ‘MOVE YOUR MONEY’ MOVEMENT HAS HAD AN IMPACT. MUTLIPLY THE CASH REMOVED BY 10X TO 20X TO COMPREHEND THE IMPACT ON BANKS, DUE TO FRACTIONAL BANKING PRACTICES. THE BANK DEFENSES SEEM TRIVIAL. THE DESTINATION FOR THE FUNDS IS SMALLER BANKS AND CREDIT UNIONS.

Despite pleading by the big US banks for customers not to move their money, impressively 650 thousand customers moved a total $4.5 billion dollars out of the big banks. The funds went into smaller banks and credit unions in October. The myth swirling is that the big banks do not really care if money exits, since the USGovt and USFed will cover them. They do care, as deposits serve as an important part of reserves in their fractional banking practices. The personal stories are powerful. A woman withdrew her $200 thousand from Wells Fargo after speaking to a young arrogant branch manager, and closed her account. When asked, she explained her belief thatWells Fargo was part of the problem with the economy, and her account would be moved to the North Carolina State Employees Credit Union. Her husband is a state worker. A woman directed a Bank of America branch teller to close her multiple accounts, and to cut her a check for the full amount. They gave her one third of her money, mentioning daily limits. She had to come back the next day for the rest after waiting in line to speak to a manager. A flock of people awaited more withdrawals. At SunTrust, the branch manager lost his composure, asking twenty times is if there anything that they could do to change her mind, looking nervous. The woman was not interested in explaining or even meeting the market executive as suggested, to meet with her and hear out any concerns. She told him she was not interested. He showed his nervous condition. These stories were repeated at over a thousand bank branches last month. The big US banks are targets for citizen action. Smaller banks and credit unions are more trusted.

THE ENTIRE CONCEPT OF TOO BIG TO FAIL IS A HANGMAN’S NOOSE AROUND THE US-BANKS AND THE BANKING SYSTEM. THE DEBATE OVER CAUSE OR EFFECT IS CURIOUS. THE RELATED PROPAGANDA IS OBSCENE, IF NOT COMICAL. THE SMEAR CAMPAIGN AGAINST GOLD WILL TURN ABSURD, BEFORE THE USDOLLAR BREAKS PERMANENTLY ON THE WORLD STAGE.

Conformity with the Too Big To Fail doctrine is synonymous with the path to systemic failure. Charles Hugh Smith sees the destructive force clearly. The absent liquidity of the biggest Western banks assures the systemic failure itself. Smith wrote, “The irony is that the propping up of a deeply intrinsically pathological and destructive financial system is not saving the economy, rather it is the reason the economy is imploding. The Big Lie technique of propaganda is to reverse the polarity of reality: we are told up is down until we believe it. We are told that liquidating the overhang of bad debt, leverage, and hedges would destroy the world as we know it. The truth is that keeping the zombie system from expiring and covering up the corruption with propaganda is actually destroying the world as we know it.Thus the collapse of the current financial system of central banks, pathological Wall Street, and insolvent banks would be the greatest possible good and the greatest possible positive for the global economy and its participants.” 

 

Japonský jen čeká růst

THE JAPANESE YEN CURRENCY IS READY TO JUMP STILL MORE. IT SHOULD FILL THE GAP AND REPEAT THE REBOUND LIKE IN AUGUST. JAPANESE FINANCIAL FIRMS ARE GRATEFUL FOR THE OPPORTUNITY TO DUMP USTBONDS AT A HIGHER EXCHANGE RATE. JAPANESE EXPORTERS ARE WORRIED SICK AS TRADE SUFFERS. THE BANK OF JAPAN IS WASTING MONEY, FLAILING IN FULL VIEW.

In the last 18 months, the Toyota market share in North America has fallen from 17.0% in 2009 to 12.8% in 2011. The  Honda market share has fallen from 10.9% in 2009 to 9.4% in 2011. A combination of natural disaster impact, higher Yen, and global recession is the cause. The massive late October intervention by the Bank of Japan was estimated at least $50 billion, roughly equal to the early August intervention. However, history reveals such displays, however ostentatious, to be fleeting in effectiveness. More wasted money, mere subsidies for firms wishing to exit, given a better price. The rebounds are quick and powerful, since the result of the action is to offer an even better price to those parties seeking to sell whatever they sell, or buy whatever they buy.

In this case, the Japanese financial firms are selling USTBonds and US Stocks, even as Asian firms are retreating to the secure trench of Yen-based havens. They respond to reconstruction concerns and safe haven pursuits. If the J-Yen rises to the 131 level, which seems a very good bet given the momentum behind the gap filling process, the major central banks will be put on alert again. The directive theme has been Global QE, as all central banks will attempt to coordinate currency debasement. The gap of 128 to 132 will fill entirely, even to provide some strong upward momentum to clear 132 before year 2012 is too far along. Japanese strength and industrial muscle is too much for the gutted USDollar to resist. My forecast has been for simultaneous monetary expansion in all major currencies so as to hold the FOREX exchange rates as stable as possible, to minimize the disruption to those exchange rates, and to keep the USDollar as elevated as possible to prevent the global commodity costs from rising. That is Global QE. Recall the Jackass forecast in April, that the J-Yen would rebound with gusto and recognized force. It did exactly that, and BOJ intervention will not stop it.

 

Run na italské banky je tu

AN INVISIBLE BANK RUN IS OCCURRING IN ITALY. THEIR BANKS ARE TRAPPED, ATTEMPTING TO DE-LEVERAGE ON A PERILOUS TIGHTROPE. THEY HAVE DEVELOPED A BIG DEPENDENCE ON EURO CENTRAL BANK FUNDS. THE CDSWAP MARKET INDICATES AN EXPECTED ITALIAN DEFAULT. NEXT THE BANK DEPOSITS WILL EXIT.

Italian banks have grown dependent on the European Central Bank. They borrowed EUR 111.3 billion (=US$152 bn) from the central bank at the end of October, up from EUR 104.7 billion in September and EUR 41.3 billion in June, as per Bank of Italy data. The five biggest lenders accounted for 61% of the country’s draw on ECB funds in September, double that of January. The banks include UniCredit, Intesa Sanpaolo, Banca Monte dei Paschi di Siena, Banco Popolare, and UBI Banca. A quip quote came from Alberto Gallo, a credit strategist at Royal Bank of Scotland in London. He said “The banks are de-leveraging on a tightrope.” They must reduce their debt load in a highly dangerous bond environment marred by distrust and volatility. The decline in Italian Govt Bonds has rendered great damage to the private banks, reducing their reserve ratios and eroding loan collateral to regular business credit. The Italian banks are trapped in the Italian sovereign debt securities.

The austerity plans being forced will ensure a recession, thus even more losses for the banks. The run on Italian banks is just beginning, to become more visible in a couple months. The bond market expects some calamities. The CDSwap tied to the senior debt of UniCredit (largest) jumped 150 basis points in November to 502 basis points, back toward the record reached in September. They serve as the bellwether. Debt insurance contracts on Intesa Sanpaolo (second largest)  jumped 129 basis points to 467 bpts. Data is from CMA in London. The market anticipates a default event in Italy. It is assuming that Italy will fail. The next slam for the Italian banks is removal of depository funds. Despite a supposed solution in Ireland, the annual rate of decline in Irish private sector deposits was 10.5% by end September. In Greece, deposits fell in September for a whopping net outflow of EUR 6.29 billion, the largest monthly exodus in two years. The decline in balance sheet assets and removal of deposit funds work to kill the banks.

 

Jak jsou na tom americké nemovitosti

THE US-HOUSING MARKET REMAINS A TOTAL NIGHTMARE HELD DOWN BY PROFOUND NEGATIVE EQUITY. A GIGANTIC HOLE PERSISTS WITHOUT IMPROVEMENT OR SOLUTION. THE HOUSING MARKET WILL SERVE AS THE HANGMAN’S NOOSE AROUND THE USECONOMY’S NECK, LEADING TO SYSTEMIC FAILURE.

The USEconomy cannot recover when its grotesque insolvency does not improve. While the ruinedUS banking system is exposed as the broken credit engine, the ruined US housing market is exposed as the body in the Intensive Care Ward. The Jackass forecast has been consistent for four years.The housing decline will be chronic, deadly, unfixable, and lead to systemic failure, ultimately to USGovt debt default. The dissenting views have been shallow, easily cast aside over time. The new supply of homes in foreclosure is ample. The job loss and insecurity is constant. The need to de-leverage the entire USEconomy is acute. The banks are overloaded with a surplus of homes held in inventory, not to dare test the market with liquidation sales. The home prices would fall suddenly by 20% to 25% and cause a national panic, a mortgage bond collapse, and a string of bank failures. So the market insolvency continues like a festering wound with open sores and pus in full view. No solution is coming or planned.

The total aggregate value of negative equity associatd with 11 million residential properties  in the United States is $710 billion. The proportion of homes with negative equity continues to rise, creating consumer zombies when the home has a loan balance greater than the home value. Negative equity can occur because of a decline in value, an increase in mortgage debt from interest accumulation, or a combination of both. Another quiet route has been excessive home equity withdrawal, like to cover college or medical costs. The soon to be negative supply is ample, the symptom of the chronic problem. In all, 2.4 million borrowers have less than 5% equity. Almost one third of American houses have the drag of negative or near negative equity. The homeowners are under burden, as over 75% of them are stuck in underwater properties with mortgage rates above the market. When in negative equity, the  borrowers cannot capture the benefit of the low-rate environment. There are nearly 28 million outstanding mortgages that have above market rates and are therefore not refinanceable. The disparity is even greater when negative equity is severe. More than 40% of borrowers with 125% or higher loan-to-value (LTV) ratios have mortgages with rates at 6% or above, compared to only 17% for borrowers with positive equity.

Negative equity homes act like a disease contagion at the local area. It restricts refinancing and also sales. Here is a remarkable data point. Since the 2005 sales peak, non-distressed sales in zip codes with low negative equity have fallen 61%, compared to an 83% sales decline in high negative equity zip codes. A sick nearby zipcode affects its neighbor. Areas are affected even if sellers have equity. Similarly, if a home foreclosure liquidates for a sharply lower price, the entire neighborhood is affected on sales price. The total amount of loss in real household wealth from 2006 to 2010 has been $12.4 trillion, 70% of which was due to home equity destruction. The process is nowhere complete. Highlights are grim. Nevada has the highest negative equity percentage with 60% of all of its mortgaged properties in negative equity, followed by Arizona at 49%, Florida at 45%, Michigan at 36%, and California at 30%. Nationally, the level of mortgage debt still remains high relative to home prices.

 

 

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up information not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.proinvestory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

 

 

Hat Trick Letter – říjen, 2.část

Čtvrtek, Listopad 3rd, 2011

Minulý týden jsem publikoval první část výňatku zaměřenou na operaci Twist, stav eurozóny a pohled na bankovnictví.

 

 Potenciální snížení ratingu Francie

MOODYS SET THE STAGE TO DOWNGRADE FRENCH GOVT DEBT, AS THEY DESCRIBED THEIR POSITION AS NO BETTER THAN P.I.G.S. NATIONS. FRANCEHAS THE BIGGEST EXPOSURE TO SOUTHERN EUROPE DEBT ON SOVEREIGN BONDS. THEIR FINANCIAL STRUCTURE IS WEAKENING BADLY, THE OBJECT OF SCRUTINY BY MOODYS. EVEN DEUTSCHE BANK EXPECTS FRANCE TO BE DOWNGRADED SOON, OR BE ON TRACK TO DOWNGRADE. THE EFFECT ON GERMAN AND SWISS BANKS WOULD BE DIRECT AND STRONG.

Moodys has declared the French Govt debt to be the weakest of all the Aaa-rated nations. It came as unwelcome news going into the G-20 summit, whose finance ministers gave an ultimatum to make progress on its sovereign debt crisis. Deutsche Bank expects the rating agencies to eventually put France on downgrade review. Moodys announced that the financial position of the official French debt has suffered a deterioration. They plan to monitor and assess any potential adverse economic or financial market developments, which means watch the economy, bond market, and bank stocks. It was an update, rather than a ratings action. While Moodys believes the large diversified economy with a history of innovation and sizeable savings can absorb shocks, they note the government financial strength has weakened, like with other EuroZone sovereigns, as the global financial and economic crisis tumbles along. France has been labeled the weakest of their Aaa peers. They remain comfortable with the cost of debt, namely the bond yield. France could face further challenges from banks exposed to other European sovereigns or to its own banking system. The French banks are the biggest creditor to the PIGS nations, the largest exposure. The deterioration in debt metrics and the potential for further liabilities to emerge are exerting pressure on the stable outlook of their Aaa debt rating. Their balance sheet has no room to maneuver on any expansion.

Deutsche Bank warned that France could be placed on downgrade review before January. Earlier, Credit Suisse estimated 66 European banks will fail the next stress test, which might not be so shoddy a test. They will require hundreds of $billions in fresh capital. DBank wrote, “We highlight in this note that the French corporate sector is already financially stretched, with poor profitability and large borrowing requirements. We consider that the deterioration in economic conditions is now creating a distinct risk that France could be put under Negative Watch by the rating agencies before the end of this year. We think that Francehas the wherewithal to react to such an outcome and could avoid an outright downgrade by taking corrective measures quickly, but this naturally would be a very sensitive political decision a few months before a major election.” Some analysts wonder aloud why Credit Suisse and Deutsche Bank would jeopardize declines in their own balance sheets with such comments, since exposed to risks they point out. Neither bank can survive a vigilante attack on French spreads, as the shift in contagion would move directly to Germany.

 

 Snížení ratingu Španělska

SPANISH GOVT DEBT WAS GIVEN A RATINGS CUT BY MOODYS AND FITCH. THEY CITED ECONOMIC RISK, BANKING SYSTEM DETERIORATION, LIMITED CREDIT FACILITY ACCESS, LOWER TAX REVENUE, AND DRAINED CASH RESERVES. THE POOR PROSPECT OF SOVEREIGN DEBT SOLUTIONS AGGRAVATES THE ENTIRE PICTURE.

Moodys delivered a nasty blow to Spain, as they gave a double downgrade, two notches down to A1 with a negative outlook as well. No credible resolution of the sovereign debt crisis has been offered or has come with economic developments. Moodys pointed to a potential further escalation of the EuroZone debt crisis. The rating agency expects that the makeup of the next parliament after the November 20th elections will be strongly committed to continued fiscal consolidation. Another debt downgrade would come if the new makeup was not so committed. Any decisive credible fiscal and structural reform plan would provide aid to a stable outlook. Long-term economic strength in Spain is no longer considered to be viable, as the lengthy economic rebalancing process unfolds. Moodys noted that most sovereign issuers with a Aa3 rating have much stronger fiscal and external positions than Spain, such as very low public debt, sound public finances, and a net creditor status. Hence, Spain is considered more vulnerable to a funding crisis from vanishing confidence. Standard & Poors slapped Spain with its third rating cut in three years, down one level to AA-, the fourth highest investment grade. It cited slowing growth and rising defaults that threaten banks and undermine efforts to contain the EuroZone sovereign debt crisis. They kept the negative outlook, expecting their banking system to weaken further and balance sheet of impaired assets to grow.

Moodys reiterated the undeserved French Aaa rating, even gave them an undeserved stable outlook.  The debt ratings agency downgraded nine Spanish regions, two Basque provinces, and five government related entities, only one day after it downgraded Spanish sovereign debt, in a massacre. It downgraded the Castilla La Mancha by five notches, from A3 to Ba2. The Man of LaMancha (Zero Mostel) must be angry. The gravity of the debt crisis has deepend in Spain, which along with Italy remain highly vulnerable to banking contagion. One must wonder if the US financial forces are piling on, working in unison with a mission, so the USDollar is lifted. Perhaps ten big US banks also deserve steady ratchets of downgrades.

The rating actions concluded the review for possible downgrade initiated for eight ratings on 29 July 2011. Some details. The Spanish Govt debt went to A1 from Aa2 with a negative outlook. Moodys cited growing liquidity pressures and large financing needs with constrained access to long-term funding sources, depleted cash reserves, extensive usage of short-term credit lines, and expanded commercial debt obligations. They stressed persistent fiscal imbalances and lower expected tax revenue, as the Deficit/GDP ratio rose to 1.2% in the first six months of 2011.

 

 Snížení ratingu Itálie a italských bank

MOODYS SLAMMED ITALIAN GOVT DEBT WITH A GIANT TRIPLE DOWNGRADE. THEIR ACTION CAME WITH A COMPREHENSIVE CRITIQUE THAT LEFT NO DOUBT ON THE DETERIORATING CONDITION. THEY CITED RISK OF BEING LOCKED OUT OF THE BOND YIELD FOR FUNDING, A DIFFICULT POLITICAL CLIMATE TO MAKE AGREEMENTS, AND ENGRAINED INEFFICIENCIES.

Moodys gave a huge nasty triple downgrades to Italian Govt debt, from Aa2 to A2, and lowered the outlook to negative. The main drivers that prompted the rating downgrade were higher funding risks with higher levels of public debt and higher bond yields paid out, increased downside risks to the economy due to macroeconomic structural weaknesses, and risks to the implementation of budget cuts. Another loud comprehensive slam. They were kind in soft words, since the Italian Govt and prime minister have been defiant in spending cuts. The leader Berlusconi once said this summer that big budget cuts were not to come, since if he wanted to preside over a field of shit, he would run a farm. Moodys pointed to continued significant imbalances in the economy and severe pressure on private financial and non-financial sector balance sheets. The Italian financial system remains vulnerable to financial shocks, as a result of a structural shift in market sentiment regarding EuroZone countries with high debt burdens. In other words, Italian Govt bond yields have risen. Concern was expressed for the country’s access to the public debt markets. If locked out of external sources of liquidity, the debt rating could be put substantially lower.

Moodys gave details on the related drivers to their downgrade decision. High debt levels put at risk the finance costs and funding risks. Italy has refinancing needs of more than EUR 200 billion in 2012. As indicated by the A2 rating, the risk of default by Italy remains remote. However, the structural shift in sentiment in the EuroZone funding market implies increased vulnerability, as in high bond yield or being locked out. The Italian Economy continues to suffer from structural weaknesses such as low productivity alongside rigidities in the labor and product market. The problems have dogged the nation for a full decade. The structural impediments are only recently being discussed and addressed. The Italian Govt seems intractible in achieving fiscal targets, meaning budget cuts. Even a mild economic downturn would adversely hit the budget and bring much larger deficits. Political consensus on additional expenditure cuts can be difficult in this highly charged emotional nation. Moodys expects the Italian public Debt/GDP ratio to reach 120% by yearend.

STANDARD & POORS DOWNGRADED 20 ITALIAN BANKS, AS THEIR BANKING SYSTEM WAS DECLARED UNFIXABLE. IT WAS A LOUD SLAM, A NASTY TABLE POUNDING EVENT HEARD CLEARLY. S&P GAVE STRONG INDICATION THAT THEY EXPECT ITALIAN BANKS TO RECEIVE A HUGE CAPITAL BOOST, MEANING SOME NEAR DEATH EVENTS FROM FAILURES

Standard & Poors downgraded a slew of more than 20 Italian banks, calling the climate difficult and describing the future prospect as neither transitory nor easily reversed. Italyhas been spared much attention until the last few weeks. They left no doubt on a dim negative outlook. To sure to know that Italy is the next PIGS shoe to drop. It seems that on each day, yet another debt downgrade comes to the Southern Europe group of wrecks that increasingly includesFrance. The official S&P statement read, “In our opinion, renewed market tensions in the EuroZone periphery, particularly in Italy, and dimming growth prospects have led to further deterioration in the operating environment for Italian banks. The cost of funding for Italian banks will increase noticeably because of higher yields on Italian sovereign debt. Furthermore, we expect the higher funding costs for both banks and corporate bonds to result in tighter credit conditions and weaker economic activity in the short-to-medium term.We do not believe that this difficult operating climate is transitory or that it will be easily reversed. In our view, funding costs for Italian banks and corporates will remain noticeably higher than those in other EuroZone countries, unless the Italian government implements workable growth enhancing measures and achieves a faster reduction in the public sector debt burden. Consequently, we envisage a situation where the Italian banks may well be operating with a competitive disadvantage versus their peers in other EuroZone countries. At the same time, we think all banking systems across the EuroZone, including Italy, may raise their commitment to reinforcing bank capitalization.” They expect a big aid package to come to Italian banks, which is a nice way of seeing some near death failure events forcing the capitalization process.

 

Co na to evropské banky

SOME LARGE EUROPEAN BANKS WILL PROCEED WITH LIQUIDATIONS, AND NOT RAISE CAPITAL IN THE CURRENT LOW VALUE ENVIRONMENT. FRUSTRATION HAS GROWN OVER THE BAILOUT FUND, THE REQUIRED INFUSIONS, BANK CAPITAL REQUIREMENTS, AND NECESSARY STEPS TO RECAPITALIZE. SOME BANKS ARE QUITTING AND HAVE DECIDED TO SELL ASSETS. THEY TOO WILL BRING LOW VALUES. TWO GIANT FRENCH BANKS LEAD THE PROCESS. LOOK FOR IMPAIRED US-MORTGAGE BONDS TO BE IN THEIR PORTFOLIOS, LED BY THE PRIME-X BONDS THAT FELL HARD.

Some big European banks ddmit they have refused to raise capital in the current environment. They will proceed with asset liquidations instead. The Financial Times confirms the development. But the price of sales will be depressed, just like the bank stock shares for secondary sales. The European banks have balked at the prospect of recapitalizing at current levels, not wanting to raise capital at these depressed share price levels. The average European bank equity is trading at only 60% of its book value. The banks have made commitments behind closed door and instead will opt for asset liquidations. The big banks cringe at the thought of massive dilution from additional stock shares issued and sold. Meanwhile, the short-term funding markets appear to shut out banks for the fourth month in a row. They are stuck between a market rock and a balance sheet hard place. The key prerequisite to any recapitalization plans is absent. The higher capital needs are to fund ratio requirements per Basel III, a big thorn in their side. The ugly truth is that banks desperately need capital just to operate, apart from newly enforced Baselstrictures to hit in 2016. Expect a potential wave of liquidations, especially of US$-denominated assets. Watch to see who sells first, since they will sell at the best price. They own many assets in common, so a race out the door is coming.

The Financial Times reported on the radical approach, led by French banks BNP Paribas and Societe Generale. The two French giant banks have signalled plans to offload a combined EUR 150 billion of risk weighted assets. Other businesses could be sold. The troubled Unicredit from Italy and Commerzbank from Germany are seen as under the most pressure to deleverage and undergo divestiture of assets. Expect the approach to be copied by lenders acrossItaly, Spain, and Germany, the internal banker sources described. The shrinkage strategy will surely prove controversial with politicians and regulators when bankers lend less still to customers, tossinga major damper on the EuroZone economic recovery. Better stated, a damper on the EU Economy already in recession. EU Commission Barroso emerged from a disappointing session, in which no specifics on the EU bank recapitalization plan were offered, since none existed. Much talk had come on debate between the US and EU finance ministers over leverage used to replenish both the stability bailout fund and implicitly the bank rescues. The regulator body, the European Banking Authority, is prepared to set a higher bar than expected at a 9% ratio of core Tier-1 capital to assets for banks across the continent. A deadline of six to nine months would be set for forceable recapitalization by governments, unless the banks completed the process on their own volition. Investors are extremely unwilling to commit to fresh equity injections, knowing the new money would be soaked up by sovereign debt writedowns. This is a very important point. Rescues go down a black hole!! Such is the nature of collapsed Ponzi schemes, as is the entire Western economy, built upon debt and derivatives. The public might be treated to more stress tests. Some analysts expect them to contain some actual stress, but it is unlikely. Watch for European banks to mention commercial mortgage bonds and Prime-X assets, the prime mortgage bonds whose values are diving down.

 

 

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up information not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.proinvestory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

 

 

Hat Trick Letter – říjen, 1.část

Úterý, Říjen 25th, 2011

Hat Trick Letter vyšel zhruba před týdnem, tady najdete výňatky z první části. Výňatky z druhé budou následovat cca za týden.

 

Operace Twist

OPERATION TWIST HAS CAUSED SOME UNINTENDED CONSEQUENCES. DAMAGE HAS BEEN DONE TO PRIMARY BOND DEALERS. THEY ARE DUMPING BOTH USTBONDS AND CORPORATE BONDS. THEY ARE KNOWLEDGABLE VETERAN PLAYERS. THE BOND MARKET IS BADLY WOUNDED. BANK FAILURES COULD OCCUR VERY SOON

The Primary Dealers are supposed to be devoted USGovt finance soldiers, building inventory, aiding the system, acting as buffer. They have become massive sellers of USTreasurys and Corporate Bonds recently, the data through September 28th. A trend is stark clear. The dealers appear to be in trouble. Observe wholesale dumping of both USTreasurys and Corporate Bonds. They are either in deep distress themselves, or abandoning ship during Operation Twist, the opportunity presented. They are experienced with intimate knowledge of corporate finances. Bond yields are turning upward from their record rally in troubling developments. Implications for the bond market are dire, and reflect badly on US financial system health. Lee Adler of the Wall Street Examiner said, “About the Fed’s Primary Dealer network. If the Fed is the head, these guys are the spinal cord. Isolating on just their corporate bond holdings, the picture becomes even more troubling. If major corporations are supposedly doing so well and their balance sheets are in such great shape, why did the Primary Dealers not accumulate their fixed income securities throughout the equities bull market of 2009 and 2010? And especially why have they been frantically dumping their corporate holdings since June? Something is rotten here. These are signs of major systemic stress.”

 

Pohled ze Stratforu

Stratfor is a geopolitical think tank with a spotty record. The do well on economic matters, and poorly on military matters. However, they recognize the depth of the global financial crisis and its unfixable nature. The research outfit estimates that the bailout necessary to manage the fallout from a Greek removal from the Euro Monetary Union, and a debt default, would require EUR 2 trillion. My estimate is more like EUR 4 trillion minimum, when all PIIGS plus France are engulfed. The formal bailout mechanism, the European Financial Stability Facility, is in place, but it is woefully inadequate. Nobody seems willing to admit that it is grossly under-funded, like by a factor of five. Soon attention will come to the Italian Govt debt needs. Rome was under the spotlight, butGreece and the delayed funds for its bailout took over that focus. Italy would require close to EUR 1 trillion alone, but over three years perhaps. Stratfor estimates that upon a Greek rejection, EUR 400 billion would be quickly needed to cover the contagion and another EUR 300 billion needed for the banks. The IMF is not prepared to offer a huge slice of that bailout aid. It could provide at most EUR 150 billion. Even with enormous bond redemption and bank aid, Europe will stumble along while their great structural, financial, and organizational challenges remain. The plans discussed serve as mere patches and tourniquets for a couple of years, and no solution whatsoever. Neither the United States nor Europe are on the path to any solution, and not London either. No plans involve big bank liquidations.

 

Euro

THE EURO CENTRAL BANK DID NOT CUT INTEREST RATES. ALMOST THE ENTIRE EURO CURRENCY DECLINE, AN OVERSIZED 1000 BASIS POINTS, WAS PREDICATED UPON THE EXPECTED RATE CUT TO ACCOMMODATE A SLOWER ECONOMY. THEY ANNOUNCED EXTENSIONS TO BOND PURCHASES INSTEAD. THE EURO CURRENCY IS RISING, OVER HALF DONE ON ITS RECOVERY

An important reversal of focus, expectation, and direction has taken place in Europe. Put aside the sovereign debt mess that will not go away. It will not be fixed, despite all the effort and talk and deal making. They must prepare for a string of bank failures and a Greek default. Every solution executed or proposed or pending involves the same lunatic device of creating more debt or more money to solve a problem caused by too much credit creation and unchecked monetary creation. All concomitant austerity plans on budgets will worsen the deficits and debt picture. For 18 months the Euro had traded on the back of the European Central Bank monetary policy, on interest rate judgments and expectations. To be sure, the PIIGS sovereign debt situation has dominated the news. However, that disaster has played out in the member nation bond yields, like Greek yields shooting toward 100%, like the bigger southern periphery nations jumping over the critical 5% level. During all the maelstrom of the wrecked bonds, arguments over bank bailouts, haggling over funding the stability fund facility, and political foot dragging, the Euro had maintained above the 140 exchange rate for a long time. The impetus for the rise from 130 to 147 in the Euro currency from the beginning of year 2011 had been the clear move by Trichet of the Euro Central Bank to break ranks with the US Federal Reserve. Trichet hiked the official rate by 25 basis points several months ago, attempting to make distance from the USFed. He made defiant comments implying a reckless pattern at the USFed. He cited rising price inflation threats and the lack of desire to continue to stimulate on the monetary side. The rate hike was criticized widely for its direct impact on PIGS nations. Their mortgage rates and other related internal bank mechanisms caused damage to the southern banks. They were already teetering.

All changed at the end of August. The outgoing chief Trichet responded to the Western plunge in stock markets accompanied by vivid economic slowdowns. In recent weeks, the Euro Central Bank has indicated a greater emphasis on paying attention to growth issues, a policy direction change. The profound bank distress has grown into a contagion, as the big French banks came under the spotlight, also capturing his attention if not causing shock. Then suddenly Dexia had a near death experience, aided en route to the morgue. The EuroCB seems now trapped by two equally unsavory and undesirable policy directions. It had been giving all the signals of an official rate cut. But the European Central Bank did not cut rates last week, an event of extreme importance. Trichet cited intensified downside economic risks, words which matched the Bernanke language of extreme economic weakness. The clumsy Euro Central Bank instead decided to announce another round of bank loans and massive bond purchases. While the bond plan is more of the same expansion of money, much bank backstop activity has curiously been US$-based, as the big European banks have a boatload of US$ obligations to meet, actually raising USDollardemand. The ugly little fact in the last month has Wall Street banks filling the void with extended bailout-like loans in the inter-bank market to big Euro banks. The harsh reality is that whenGreece inevitably defaults, a string of bank failures will occur that hit Europe, London, and the US simultaneously. It will be very rapid. The great posturing is underway prior to the big event. Clear the smoke and dust, and the fact remains that the official EuroCB interest rate was not cut by 25 basis points. They did not even remove their hike from several months ago.

The Euro is in recovery from its tumble down the staircase in late summer. The currency began quickly to gain strength on the usual speculation that another round of fresh loans to deeply distressed banks by the European Central Bank would buoy the financial markets stuck in crisis mode. The Competing Currency War will not quit until its logical conclusion of comprehensive ruin of paper currencies. The Euro rises from fading faith in interest rate cuts, the key to leveraged bond speculation that has dominated the FOREX markets for two decades. The British Pound is falling from the expanded official bond purchase plan by the Bank of England, in unexpected uncharacteristic style. The Brazilian Real surged after price inflation rose more than forecast, raising belief that the central bank will bring an end to official interest rate cuts.

EuroCB officials left their benchmark rate at 1.5%, as expected after strong hints by Trichet made since September in reaction to widespread evidence of economic slowdown. The EuroCBannounced no change on rates, but big change to credit. The EuroZone price inflation is still at 3%, for which they have a clear single mandate. The outgoing ECB head announced a resumed covered bond purchase plan that reintroduces year-long loans for banks. They are badly threatened as the sovereign debt crisis has frozen money markets. Trichet will step down at the end of October, to be succeeded by Mario Draghi from Italy and of Goldman Sachs pedigree. The financial markets found relief, as they believe amplified support from stronger liquidity measures mean much more than the toothless stimulus from lower interest rates. Talk continues of the interruption to recovery, a 1984-like mantra. The reality is that the US and UK and Western Europe have been stuck in a powerful recession for three years, as near 0% interest rates since early 2009 have done nothing to accomplish the anticipated heretical Keynesian lift from phony stimulus. Insolvency has gripped the entire Western world, and no amount of liquidity flood can fix it. All austerity measures imposed on budgets will worsen the problem. It is like a deeply indebted person going on a hunger strike to improve his loan payback.

 

Situace v bankovncitví

THE MORGAN STANLEY CANARY IS SCREECHING. ITS CDSWAP FOR DEBT INSURANCE IS SOUNDING LOUDER THAN THE LARGEST WOUNDED ITALIAN BANKS. IT COMPARES BADLY TO FRENCH BANKS TOO. WHILE EUROPE RECEIVES NEWS COVERAGE, WALL STREET IS GIVEN A PASS. THE BANK HAS BECOME DEPENDENT UPON THE CREDIT MARKET AND NOT TO DEPOSITORS, A WARNING SIGNAL. THE BUCKET SHOP BAGHOLDER OF INTEREST RATE SWAPS IS DOOMED.JUST A MATTER OF TIME BEFORE IT IS PLOWED UNDER DEAD.

Morgan Stanley (MS) owns the world’s largest retail brokerage. Its corporate debt is being priced in the debt insurance market as less creditworthy than most American, British, and French banks, but as risky as Italy’s biggest banks, all of which are badly wounded. The Credit Default Swap cost for debt insurance against a default on Morgan Stanley debt for five years surged to 456 basis points, or $456k for every $10 million of debt insured, in the first week of October.That is very expensive, and quite a rise from 305 basis points on September 15th, according to London-based CMA. From the stable of wrecked Italian banks came Intesa Sanpaolo with a CDSwap at 405 basis points, and UniCredit at 424 bpts, higher than the French troubled banks. While the price of their CDS is the highest since March 2009, it is well below the peak reached in 2008. On October 10th of that fateful year, the annual price for 5-year protection rose to 1300 basis points, or 13%, triple the current cost. Rising CDSwap spreads are making investors and creditors nervous about Morgan Stanley, a small Wall Street firm deeply abused. It plays a key role, like with the added $9 trillion in derivatives tacked on in 1Q2011, most being Interest Rate Swaps. That started the USTBond rally to contradict the Standard & Poors debt downgrade of USGovt debt. The stock (symbol MS) has taken a beating this year, down from a peak 32 per share in February to a lowly 15 or 16, after a bounce off the 12 floor. It is a component in the S&P 500 Financials Index.

Moodys Analytics, an independent arm of Moodys Investors Service, issued a report that stated the Morgan Stanley CDSwap price implied a bank credit rating as having declined to Ba2 from Ba1 in the last month. The company is absurdly rated six grades higher at A2 by Moodys, a gift and fraud. This opens the door to shorting the stock on a death watch. By comparison, Bank of America and French Societe Generale have CDS trading at 403 basis points and 320 basis points respectively, which imply a higher rating of Ba1. Morgan Stanley was the biggest recipient of emergency loans from the Federal Reserve during the financial crisis and also benefited from capital provided by the USDept Treasury and Mitsubishi UFJ Financial Group, its largest shareholder. Another warning signal is the fast rise in trading volume for the MS debt insurance. Their CDSwap volume has risen to 257 contracts in early October, compared with 187 for Goldman Sachs Group, according to the Depository Trust & Clearing Corp data. That compares with a weekly average of 73 contracts in Morgan Stanley and 91 in Goldman Sachs in the six months that ended on August 26th, over triple for MS and double for GS. The credit market is in turmoil. Supply is scant. Many banks are on death watch, subject to shorting sharks. Few market participants are prepared to sell debt insurance protection to meet the demand for hedges, given the European Union is in shambles. So the CDS insurance cost rises.

The rise in Morgan Stanley CDSwap prices is linked to an expected decline in 3Q2011 trading revenue and to big exposure to French banks. The MStanley fixed income trading in Q3 was worse than 4Q2010, when they posted the lowest debt trading revenue since the 2008 crisis. The investment bank had $39 billion of exposure to French banks at the end of December, offset by sizeable hedges and collateral. The result is a claimed net $2 billion exposure to French bank firms. As of June 30th, Morgan Stanley also had $5 billion of funded exposure to Greece, Ireland, Italy,Portugal, and Spain. That was reduced to about $2 billion when offsetting hedges were accounted for. Do not believe the strength of the hedges, since the counter-party will probably fail with them in the domino effect. Curiously, the Morgan Stanley CDS spreads are wider than French bank CDS spreads. Implied is that MStanley has other significant problems that the insiders are aware of. Point the finger to Interest Rate Swaps. Some analysts suspect that MS has grown too dependent upon the debt markets, instead of depositors, in order to provide funding for its assets. This might be one cause of concern. MS is in a race to ward off death.

 

 

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up information not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.proinvestory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

 

Hat Trick Letter – září, pokračování

Středa, Září 28th, 2011

V polovině měsíce jsem publikoval část výňatku zaměřenou na stav Bank of America a projev Bernankeho v Jackson Hole Nyní najdete další vybrané úryvky.

 

Americké banky bojují mezi sebou.  O co? O to, kdo koho sežere.

ENTER THE CANNIBALS AMONG THE BIG US-BANKS. THE EXECUTION OF BEAR STEARNS WAS THE FIRST KILL. PERMITTING LEHMAN BROTHERS TO BE KILLED WAS AN EXPLOITED MERCY KILL, DECIDED AMONG THE BRETHREN IN CONSENSUS. NEXT WILL BE A KILLJOB OF A WEAK BROTHER, SINCE IT OFFERS PROFIT POTENTIAL. A GANG ALWAYS TURNS ON ITS WEAK LINKS. THE GROUP’S LOSSES ARE MONSTROUS. THEIR SURVIVAL IS AT RISK. TURNING ON WEAKLINGS ASSURES MORE TIME AND GREATER CHANCE TO RESIST THE COLLAPSE. WATCH THE LAWSUITS. THE ENTIRE BANKING PLATFORM WILL COLLAPSE IN MY VIEW, LEADING TO A BANK HOLIDAY CLIMAX, WHERE MASSIVE THEFTS CAN BE FACILITATED. THE COMMON TARGET APPEARS TO BE JPMORGAN, THE OBJECT OF A CLASS ACTION SILVER INVESTMENT LAWSUIT.

The AIG $10 billion lawsuit against Bank of America is just an opening salvo, many more to follow. The Federal Housing Finance Agency lawsuit against 17 global banks is a major escalation. The digestion of Countrywide Mortgage by BOA and of Washington Mutual by JPMorgan seemed like opportunities to exploit some profit at the time, deals made with expedience and greed in mind. The colossal losses have been estimated by numerous entities. Bloomberg tallied $66 billion in losses from the five biggest US home lenders. Analyst Paul Miller of FBR Capital Markets has credibility. Miller expects costs for all banks to surpass $121 billion as the dust begins to clear on lax lending practices. Under his new estimate, which covers only repurchase costs, Bank of America, Wells Fargo, JPMorgan, and Ally Financial will bear 60% of the burden, with Bank of America alone paying 33% of it. Neil Barofsky served as special inspector general for the Troubled Asset Relief Program (TARP). He succinctly said, “You are not talking about improperly stapling together two documents. You are talking about systematic fraud in the system. What this shows is that before the financial crisis, the banks were essentially lying to the purchasers of the mortgages about the quality.” Nice summary, no nonsense or murky language. Diverse profound systemic fraud.

The Bloomberg tally was compiled from regulatory filings, company statements, and financial presentations. The data covers provisions and expenses attributable to repurchases, foreclosure errors & abuses, payments to reimburse investors for lost value on faulty mortgages, legal settlements, and litigation expenses. The compilation also includes writedowns of assets, such as mortgage servicing rights, when a firm attributed the loss in value to problems in mortgage underwriting or foreclosures, and the costs of remedies. The figures are fluid, sure to increase as more details become available. While a comprehensive list of categories, in no way does it cover all the hidden toxic credit assets at the biggest banks. The trailing losses are staggering, only a portion made public. Previously known as GMAC, Ally has suffered $3.28 billion in costs. After the former car finance firm for sales & leases lost $10.3 billion in 2009, it required a USGovt bailout totaling more than $17 billion, largely due to losses from its Residential Capital mortgage unit. Ally is 74% owned by the USDept Treasury, the proud owner of toxic swill paper. Citigroup has racked up staggering losses, a record 2008 net loss of $27.7 billion that paved the road for a $45 billion bailout to cover subprime loans gone bad. At least the subprime loan crisis was contained, hardly!!

Wells Fargo has filed lawsuit against JPMorgan over 800 ruined home mortgage loans.They wish to force JPM to buy back the entire basket of toxic paper that it oversees as trustee. They accused the EMC Mortgage unit within the JPMorgan fortress of refusing its demands that EMC buy back the loans they originally acquired from the Bear Stearns Mortgage Funding Trust. The claim cites reckless home loan approval despite clear defects, including faulty appraisals and inflated borrower incomes. In a forensic sampled review, it was demonstrated that EMC breached warranties on 89% of 948 loans. Wells Fargo called the basket plagued by an alarming rate of defaults and foreclosures. The structure is complex. Trustees such as Wells Fargo act on behalf of investors in securities (mortgage bonds) backed by underlying loans. Aggrieved banks such as Wells Fargo and US Bancorp have taken their cases to the courts, where Wall Street influence is minimal. US Bankcorp sued Bank of America Corp last month, as part of the parade. Wells Fargo has size. By assets, it ranks fourth among US banks, but among mortgage lenders, it ranks first.

JPMorgan is the target of another lawsuit, a class action silver investor lawsuit that might actually gain traction. The case involves significant revelations and details of players involved and techniques used, even motive. The case was filed in the US District Court of New York against JPMorgan for Silver price manipulation. Insider perspectives are shown. The stage was perhaps set, or greatly enhanced, by the giant bank’s acquisition of massive short silver position owned by Bear Sterns. Point #93 indentifies Robert Gottlieb as the person who developed that massive short silver position, along with assistance from HSBC silver trader Mike Connolly.

 

Banky shánějí financování i výměnou za zlato

BANKS RUSH TO LEASE GOLD ASSET TO OBTAIN USDOLLAR FUNDING. THE LEASE RATE IS ACTUALLY NEGATIVE, A SIGNAL MUCH LIKE AN UPSIDE DOWN NATIONAL FLAG FLOWN ON THE MAST AT A FORT UNDER SIEGE. THE FACTOR IS SHORT-TERM NEGATIVE FOR GOLD, BUT LONG-TERM EXTREMELY POSITIVE FOR GOLD. RECALL THAT AFTER THE 2008 GOLD DECLINE, THE GOLD PRICE MORE THAN DOUBLED IN TWO YEARS TIME.

The liquidity problems among European banks is heightened acute radical nasty. The distressed banks are rushing to use their gold assets in order to access desperately neededUSDollar funding. Gold dealers and analysts report a strong increased move to lend gold in the past week, accelerating in recent days. The rush has pushed gold leasing rates to record lows, according to Thomson Reuters data. The murky market puts lease rates as the implied interest rate for lending gold for USDollar funds. The Jackass admits not to comprehend this fuzzy niche well. The one-month gold leasing rate has plunged to a historic low of minus 0.48%, which means a bank lending gold for one month would have to pay to do so. Therefore they hold their gold tightly. The latest move is dramatic and highlights the stresses in the USDollar funding market, according to bankers. Huge demand has come at the end of quarter in September for exchanging gold forUSDollars. The cost for European banks to swap Euros into USDollars has jumped five-fold since June, hitting the highest levels since December 2008, essentially locking out the weaker players. Veteran traders explain that the large volume of gold leasing was one reason gold prices had struggled to achieve upward momentum, despite growing concerns over theEuroZone crisis, the teetering bank edifices, and the visible impact craters. The lower (even negative) lease rates are bearish for gold, since the asset is used to raise cash. However, it is also a long-term signal of profound distress which is tremendously supportive of gold from the next chapter assured to include bond bailouts, bank recapitalization, and monetized debt, even enormous economic stimulus in extremely motivated reaction.

 

Přípravu na konvertibilitu yuanu jsou v plném proudu 

LONDON IS BEING PREPARED AS THE CHINESE YUAN TRADE HUB, THE YUAN MADE FULLY CONVERTIBLE BY 2015. THE KEY IS DEVELOPING OFF-SHORE YUAN TRADING HUBS, WHICH LONDON BANKS ARE ASSISTING IN CREATION. ALL PROCESSES ARE BLESSED BY BRITISH AND CHINESE BANKING OFFICIALS, ALONG WITH THE CHINESE VICE PREMIER. THE TRANSITION TO A COMPETITIVE CONVERTIBLE CHINESE CURRENCY IS MAKING SLOW BUT GOOD PROGRESS.

Plans are being furthered to make the Chinese Yuan fully convertible by the year 2015, so claims Chinese officials before the EU Chamber of Commerce and its business executives. No timetable is formally adhered to, but the Chinese officials report the overseas Yuan market and flows are developing faster than imagined, a main requirement. The other is a brisk Yuan-based bond market trade. The usage of Yuan has been promoted in bilateral trade with several nations as a means to limit reliance and risk from the USDollar. The concept has been reported regularly within the Hat Trick Letter for four years, aware of its importance. Full convertible currency is a criterion the United States and Europe demand from China as a condition entry in the Intl Monetary Fund currency basket. Inclusion is the positive, but opening vulnerability to the standard Anglo criminal mechanisms in FOREX markets is the negative side. The Peoples Bank of ChinaGovernor Zhou Xiaochuan reminded that his nation aims at “gradually realizing the renminbiconvertibility under the capital account. [But the nation] has no defined timetable for the Yuan to be fully convertible. It will be a gradual process.”

Zhou was in London for an official visit with bankers. An upward rise in Yuan currency valuation is assured. The central bank disclosed on August 1st an intention to manage the Yuan more actively against a basket of currencies, instead of just the USDollar, which would permit market forces to play a greater role. The current management entails limiting daily movements, and limiting conversion for investment purposes. Their FX reserves grow by $40 to $50 billion per month. Chinese Vice Premier Wang Qishan met with UK Chancellor of the Exchequer George Osborne in Britain. The UK banks are busy establishing a Yuan-based offshore trading center inLondon. The Vice Premier will support such efforts. Zhou confirmed the development, saying “The City of London has expressed its interest to help develop Yuan offshore business. We are very encouraged.” The downside is that a higher Yuan valuation will harm Chinese exports, which leads their officials to move with caution.

Sacha Tihanyi of Scotia Capital in Hong Kong said, “Making the Yuan fully convertible will lead to foreign inflows into China and a stronger Yuan. Making the Yuan fully convertible is also the key step in pushing it as a reserve currency and enhancing its use in global trade.”The timetable might not be practical. Neither Taiwan (Dollar) nor South Korea (Won) have full convertibility yet either for their currencies. Global market instability might render the target date as difficult or impractical. The clownish US politicians wish to see a higher Yuan exchange rate and removal of import barriers in order to spur trade. But a higher Yuan would mean higher import prices across the board, at Wal-Mart, Target, Best Buy, and Home Depot. Removal of barriers would not mean much more US trade to China, since the same USGovt officials block computer and telecommunication export. Apart from these items, the Chinese desire little if anything. Export from the United States of its main technical expertise, namely bond fraud, is no longer wanted. The Chinese Govt is clever. They are formulating plans to introduce Foreign Direct Investment in the country using funds denominated in Yuan, but raised offshore. Doing so would not push the Yuan higher from fresh demand. They plan to permit qualified fund managers to invest such funds in Chinese stocks and bonds. A similar program already allows licensed companies to convert a quota of foreign exchange funds.

 

 

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up information not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.proinvestory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – září 2011

Čtvrtek, Září 15th, 2011

Hat Trick Letter vyšel včera večer, tady najdete výňatky z první části. Výňatky z druhé budou následovat cca za 10 dní.

 

Komentář k projevu B. Bernankeho v Jackson Hole

BERNANKE LAID AN EGG AT JACKSON HOLE. ON A GLOBAL STAGE, HE ESSENTIALLY ADMITTED THE USFED HAS NO EFFECTIVE WORKING TOOLS REMAINING. THEY HAVE EXHAUSTED THEIR TOOLBAG, MADE THE SITUATION WORSE, AND NOW HOPE FOR THE BEST LIKE ALCOHOLIC PYROMANIACS. HE DID SIGNIFICANT PUBLIC HAND WAVING AND HAND WRINGING. IF HE IS AWARE OF THE DIRE RISK OF SYTEMIC BREAKDOWN, HE DID NOT SHOW IT. HIS ARROGANCE SURELY LEADS HIM TO BELIEVE OMNIPOTENCE. MUCH REVERENCE IS STILL SHOWN TO THE USFED & CHAIRMAN DESPITE THEIR FAR-REACHING FAILURE.

Never in modern history has a central bank from a major industrialized nation admitted helplessness and futility in monetary policy capability until late August when USFed Chairman Bernanke did so in full view on stage. He might as well have admitted that the fiat currency system and its attendant central bank franchise have been a gross failure. Systemic failure is next, a process well along. In a pathetic display that lacked any details whatsoever, Bernanke delivered a grand bluff, claiming at the Jackson Hole Meeting of bankers and economists that the USFed still has tools to stimulate the USEconomy. He has leggo and tinkertoy tools, some Beanie Babies, bailing wire and duct tape, nothing more, maybe some strong language. To think that the USFed can halt interest paid on Excess Reserves is laughable, since the central bank needs the assets to conceal its grotesque insolvency. The ZIRP (0% rate) and QE (debt monetization) have been tried, with no economic recovery at all and a cost increase to aggravate the situation.

Before an admiring crowd, shamelessly Bernanke said “In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be used to provide additional monetary stimulus. Although important problems certainly exist, the growth fundamentals of the United States do not appear to have been permanently altered by the shocks of the past four years. It may take some time, but we can reasonably expect to see a return to growth rates and employment levels consistent with those underlying fundamentals. The Federal Reserve will certainly do all that it can to help restore high rates of growth and employment in a context of price stability. [He called for the USCongress to adopt a] credible plan for reducing future deficits over the longer term. The extraordinarily high level of long-term unemployment adds urgency to the need to boost job growth. Most of the economic policies that support robust economic growth in the long run are outside the province of the central bank. Financial stress has been and continues to be a significant drag on growth. Given the most likely scenarios for resource utilization and inflation in the medium term, the target for the federal funds rate would be held at its current low levels for at least two more years.”

The denial by Bernanke was dressed up within a fantasy perspective that fails to detect a recession, again. He cannot address the bank insolvency either. Never has the USFed neglected from offering details on tools to use. What a bluff!! He essentially raised a white flag of defeat and punted to theUSCongress, a den of polarized compromised nitwits and snakes. A second day has been added to the next FOMC meeting in late September to allow a fuller discussion of the economy and potential response. He fell short of promising a QE3, acting coy. My belief is that debt monetization that is QE has never stopped, and has actually accelerated, with more global participation by other almost equally desperate central bankers.

In a grand concession, and veiled billboard of defeat, Bernanke pledged for the first time to keep its benchmark interest rate at a record low at least through mid-2013. No central banker in history has ever made such a promise. He put blame on the housing market as interrupting the natural recovery process, without realizing that the fostered dependence upon home equity withdrawals and mortgage bond trading was the twin stake through the USEconomy’s heart that the USFed endorsed. He called it a former significant driver of growth, without acknowledging a deadly dependence that has resulted in systemic failure. A housing and mortgage bubble cannot substitute for industry, even if risk is offloaded in a shadowy system with full praise and blessing. He made general brush stroke comments about the European sovereign debt crisis, the volatility of financial markets, and the frustrating developments related to the USGovt fiscal situation. This chairman is as much an embarrassment to economists as he is a willing harlot servant to the bankers. The nation awaits his helicopter drops, but so far only gigantic shipments have come to the loyal big banks, via dump trucks in the US and shipping containers overseas.

 

Jak je na tom skutečně Bank of America?

BANK OF AMERICA IS DEAD. ITS INSOLVENCY IS REVEALED EVEN IN THE VISIBLE REALM. IT HAS BEEN WALKING LIKE A ZOMBIE FOR THREE YEARS. FINALLY IT IS READY TO KEEL OVER. THE TIPPING POINT IS SALE OF ITS VIABLE ASSETS, LEAVING THE ROTTEN RANCID FETID CORE TO REMAIN, A WEAK TREE STANDING BEFORE A STORM. THE PRESSURED NEED FOR YET ANOTHER T.A.R.P. FUND RESCUE FUND FOR THE BIG BANKS IS COMING INTO VIEW. IF THE USGOVT CANNOT PERFORM THE TASK, THE USFED MUST DO IT.

Even compromised bank analysts can see the obvious, that the US banking system has come full circle since 2008. It is in big trouble again. The banking system is at high risk of seizure. Nothing has been fixed. Housing prices continue down, including commercial properties. Bank balance sheets suffer from a new rotten element in accumulating REO homes seized in foreclosures. So the external seizures (foreclosures) ironically have transformed into internal seizures that include absent inter-bank lending due to intense distrust within the industry. Bank of America is on the verge of failure, dealing with a dire cash shortage, its insolvency becoming visible. A bank run by depositors could seal its fate with the liquidator. The big US bank serves as a great symbol of the banking industry, since BOA is involved in every type of bank operation across the nation. The rumor mill has that JPMorgan may be circling around BOA like a vulture looking for an angle to the meat. Leaked news from consulting service firms working on the BOA carcass report that internally the big bank has slashed expenses and procurement budgets to the bone. The non-core businesses are being auctioned off to raise urgently needed cash. They are selling the businesses that have a value bid in the market. Conversely, the majority of BOA core assets are commercial and residential mortgages, goodwill (extravagant sums paid on acquisitions), and other exotic toxic accounting kept off the balance sheet such as variable interest entities. The core contains only rot, a pruned tree missing its viable branches and fruit. Harken back to Enron days with such specialty rot. Hence, what remains in the BOA business is pure toxic waste. The big US bank is finally ready to drop dead. Not even narcotics money can keep it afloat. BOA has become a hollow tree facing a storm, without reinforced structure, only rot and putrid paper bark coverings.

Make a quick look at BOA financials. They have $2.2 trillion in assets. It reports an absurd $222 billion in book value, of which $80 billion comes under goodwill and intangibles. In other words nothing of any value. Henry Blodget asserted that the $80 billion is worthless. With the stroke of a pen, adjust the book value down to $140 billion. When confronted by the Blodget analysis, a BOA spokesman distracted attention from the topic at hand, and instead attacked the analyst’s legal problems from the internet bubble era. Take their response as a off-handed confirmation of a correct analysis. BOA owns $139 billion is home equity loans, a troubled niche. Given the non-senior position of such loans, one can safely assume they are worthless. Bank analysts commonly regard home equity and second mortgages both to be total 100% losses. Nearly half of their remaining asset base is commercial & residential mortgage paper. BOA self-administered estimates on value probably involve an over-estimation of such assets by at least 15% to 20%. That is another $200 billion of impairment. By the time the dust clears on a rational realistic accounting analysis, Bank of America is technically insolvent even in the visible realm. The real rub comes from accounting off the balance sheet. The actual balance sheet value is at least negative $300 billion and probably 2x to 4x that amount, as in minus $1 trillion. BOA is the poster boy for the basement toxic swill beset by profound embedded fraud, corruption, and USGovt sponsored theft, at an order of magnitude worse than in 2008. The USEconomy has returned to recession mode in a gallop, which will compound the bank insolvency and topple the dead rotten trunk and limbs in full view.

 

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up information not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.proinvestory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – srpen 2011

Středa, Srpen 31st, 2011

Před týdnem jsem publikoval první část výňatku zaměřenou na vzájemný poměr ceny zlata a ropy. Dnes publikuji další zajímavé výňatky. Konkrétně se podívám na zoubek dvěma nejvýznamnějším zemím eurozóny.

Francie

MORE DOMINOS ARE GOING TO FALL, LIKE FRENCH GOVT DEBT, WHICH IS NOT WORTHY OF AAA RATING. LOOK FOR A SPATE OF SOVEREIGN DEBT DOWNGRADES TO FOLLOW THE UNITED STATES, AS THE DEEP DECAY MOVES FROM THE PERIPHERY TOWARD THE CORE NATIONS.

France with its undeserved AAA debt rating is obviously vulnerable after the USGovt downgrade. Not only does France look as damaged as the USGovt for its debt, but the nation looks very similar to PIGS members as to fundamentals. Worse, the French banks contribute to their national debt weakness as a direct extension of huge exposure to PIGS debt in neighboring nations. For some cockeyed insane reason, France served as a lender of last resort to Greece and Portugal. In so doing, the nation joined the PIGS to be submerged, in a grandiose haughty display of strength it does not possess. The decision by Standard & Poors to downgrade the United States has left France as twisting in the wind by comparison. It hardly merits a AAA rating either, and stands as the industrial nation most likely next to lose its top grade, according to awakened analysts. Consider its position relative to debt default insurance. France is more expensive to insure against default than governments such as Malaysia, Thailand, Japan, Mexico, Czech Republic, the State of Texas and the United States, which have lower debt ratings bestowed upon them. France must finance its own debt, nor is it treated with AAA respect in the financial markets. The core in Europe is surely shrinking. Expect France to sooner or later be subjected to an insulting shock, left to defend itself without a protector, shoved into the PIGS pen instead of held under the more staid German wing.

Consider the fundamentals, always revealing. The French Govt debt is 84.7% of national GDP, far less than Italian Govt at 120.3% of GDP. However that does not tell the full story. Focus on recent years. As a percentage of economic output, their debt has risen twice as fast as Italian debt since 2007. France has had a larger budget deficit than Italy every year since 2006. S&P rates Italy A+, four levels below France. The total debt is worth review in volume terms. The French Govt debt totaled EUR 1.59 trillion (=US$2.3 trillion) at the end of 2010. Compare to Italian Govt debt at EUR 1.8 trillion. On the basis of recent degradation slippage, France does not deserve AAA, certainly not four levels above Italy. Intense scrutiny has come by Standard & Poors, along with other nations. Their chief economist for Europe is Jean-Michel Six. He affirmed the greater scrutiny, saying “EuroZone countries like France, Italy, and Belgium, and even the United Kingdom, are vulnerable to downgrade.”

Never lose sight of the fact that German banks own 85% of French Govt debt. So they will likely continue to request French squires to carry the bags.

FRENCH BANKS ARE HIGHLY VULNERABLE TO THE PIGS SOVEREIGN DEBT FALLOUT. FRANCE LOOKS LIKE A PIGS NATION AND WALKS LIKE A PIGS NATION. CREDIT DEFAULT SWAP RATES HAVE RISEN ACROSS THE SOUTHERN EUROPEAN THEATER.

 

Německo

THE RESISTANCE MOVEMENT AMONG GERMAN BANKERS HAS GROWN OPENLY HOSTILE. A GRAND RIFT HAS FORMED. THE LACK OF INTERNAL GERMAN POPULAR SUPPORT WILL EVENTUALLY PROVE TO BE THE WEDGE THAT BREAKS THE EUROPEAN UNION APART, MADE FINAL BY GERMAN BANKERS. RECOGNITION IS COMING GRADUALLY THAT A FULLY FUNDED EUROPEAN BAILOUT FUND WILL REQUIRE $5 TRILLION. THAT PERCEPTION IS ENOUGH TO FRACTURE THE UNION ITSELF.

The next event in the saga was a sledge hammer tossed into the works by German bankers on August 6th. They knocked the central bankers almost into a frozen position. They objected and halted the insanity, claiming with forceful Teutonic style that Italy was way too big for the big Stability Fund to save. They refused to carry the main burden to the bailout, a common chorus coming from Berlin for a solid year or more. One should never be spared hearing that German savings has been drained by between $3000 and $4000 billion since the Euro experiment was hatched in a kooky unification of the un-unifiable continent. Alex Weber is an icon. He argued in favor of unlimited liquidity provision, but at the same time he fiercely opposed the purchase of government bonds. That seems contradictory and confusing. He warns of the EuroCB integrity at stake. The division is apparent. The Spiegel magazine ran a series of intrepid articles reporting the quickened situation in alert style, ahead of the pack. Doubts are splattered all over the walls that the EFSFund is sufficient to cover PIGS debt that links nations between Greece and Portugal. Obviously bailouts cannot succeed without a gigantic fund on the order of $5 trillion in commitments. Loading the fund would deeply damage the German finances.

A consensus opinion is forming quietly that the Stability Fund is grossly inadequate, even if funded by the incremental $1 billion or so. A fully funded EFSFund will need to issue EUR 3.5 trillion, equal to US$5 trillion in new debt or new money, which is beginning to be regarded as confetti. My prediction over a year ago was that at least $3 trillion would be needed to bail out the PIGS nations and their rotten sovereign debt. It is happening. When factoring in the stimulus urgently needed on the fiscal front in order to avert recessions that could gallop out of control, the funding requirements will be even greater. Whether new debt or new money, the effect is largely the same, hyper-inflation. An inflation zone is being created, whose alternative is a wrecking zone for the big European banks.

The stopgap announcement by the EuroCB to expand its purchases of secondary market Italian and Spanish bonds was merely as a prelude to full EFSF monetization. That largesse could be expected to come online in high volume in September. The EuroCB is daring the Bundesbank not join, to be branded the bad guys if not refuse since chaos would come. The dream is for a vastly expanded format between EUR 1.5 and EUR 3.5 trillion in the SuperFund. Methinks the Euro Central Banks have been sipping far too much cognac. Not gonna happen. A consensus opinion had been formed that the aid fund could only conceivably aid smaller nations. The warning made in the Hat Trick Letter all along was that the Big Enchalada in Spain and the Big Pasta in Italy would ruin the entire bond bailout game once they erupted in need. They have erupted in need, and the entire game will eventually see ruin. The process just needs time. The crescendo will be big European bank failures, lots of them.

The Merkel regime is in great danger of toppling. The defiance of the Bundesbank in their refusal to comply with any new Stability Fund demands could generate a complete split between the German banks and the Euro Central Bank. Some popular polls within Germany are worthy of note. Their mindset is not behind the Euro Monetary Union at all. Consider that

  • 59% wish to end all bailouts of PIGS nations
  • 75% disapprove of the performance by Merkel
  • 58% wish to expel Greece from the Euro Monetary Union
  • 86% of Germans think the Euro currency is at risk
  • 71% of Germans are doubtful about the common currency viability
  • 56% of Germans say the Euro has brought them economic disadvantages.

Phoenix Capital Research believes the oversized German financial backstop ends very soon. The public face is presented that  French President Nicolas Sarkozy and German Chancellor Angela Merkel share an absolute determination to defend the Euro. They are out of touch with their own people, and do not have any unified support by bankers either. They are like Anglo banker puppets on a string soon to have their strings cut or burned with fire. The European bailouts of Greece and Portugal were always ultimately constructed by Germany. Without their support, neither a bailout nor a union would exist. Recall that the Merkel political party was obliterated in the broad March 2011 elections, due to her steadfast support of bank bailouts and the Euro currency. The next round of German elections comes in September (4th, 11th, and 18th). Constitutional reform would be necessary to pull off what Merkel pursues. The deranged new concept of fresh Eurobonds serves as evidence of lunacy and desperation without political underpinnings. Austerity has not been an issue in Germany. But their economy is showing strain and sluggishness. Flat growth (accurately measured, unlike in the USA) has been led by export slide on the order of a 4% decline. A contraction will force hard decisions, a blind eye to Southern Europe, and more stubborn resistance.

The continent has turned into high drama. Phoenix calls the Euro currency properly the most heavily manipulated investment in existence. The Jackass points to the USTBond instead with its attendant Interest Rate Swap heavy lever. The dynamics among the US Federal Reserve, the European Central Bank, and the Swiss National Bank make for a maelstrom of instability and too many captains holding thick cords in helm control. Germany cannot and will not bail out all of Europe. The immediate decisions are short-term moves, mere drama. Some of the bailout loans so far might result in large collateral seizures, with more resentment and street violence. My call two months ago was that the bailouts of bankers would continue until riots occurred. They have occurred, due in part in response to collateral grabs. The EU in its current form has entered the End Game, forced by Italy on the table and Spain in the waiting room. Expect the breakup in some form to occur in the next 12 to 18 months.

 

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up information not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.proinvestory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

 

 

 

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Hat Trick Letter – srpen 2011

Středa, Srpen 24th, 2011

Stejně jako před měsícem jsem se rozhodl nečekat týden na další report a publikuji výňatky z první části. Výňatky z druhé budu publikovat pravděpodobně v průběhu příštího týdne.

Jaký je poměr cen zlata a ropy?

THE GOLD VS CRUDE OIL RATIO IS SOARING. IT MEANS THE FINANCIAL SAFE HAVEN IN GOLD HAS BEEN DISCOVERED, CONTRASTED AGAINST HEAVY DEMAND DAMAGE ON THE COMMERCIAL SIDE WITH ENERGY GENERALLY. THIS RATIO HAD BEEN RELATIVELY STABLE FOR OVER TWO YEARS. THE GOLD BREAKOUT IS IN ALL MAJOR WESTERN CURRENCIES. WITNESS LETHAL INFLATION ON THE FINANCIAL FRONT, AND DAMAGING DEFLATION ON THE COMMERCIAL FRONT, COMBINING TO FORM A POWERFUL STORM VORTEX.

image002

Three price directions have been vividly clear in the past few weeks.

  • The Gold price has hit record high levels in several major currencies
  • The Crude Oil price on West Texas has plunged to multi-month lows
  • The Silver price has stayed stable at a still elevated level.

Notice the Gold/Oil ratio over the past three years in the above chart. The ratio has returned to near the post-Lehman high level. The extremes are back. The financial sector damage, dislocation, and abuse are evident in the crumbling sovereign bond market, the wrecked big US bank stocks, and the enlistment of Gold as the true safe haven. Do not be fooled by the knee-jerk pied piper response to flee the frying pan and find the fire, as investors moved from stocks to USTBonds. They have been badly deceived. Last month, the gigantic $9.1 trillion additional Morgan Stanley application was given in details of Interest Rate Swaps. These tools exploit the artificially low short-term USTBill yields and create phony demand in long-term USTreasurys like the 10-year and 30-year maturities. It is a carry trade that exploits low-cost funds in arbitrage. The demand is artificial but felt with impact in a TNX approaching the magic 2.0%. When it reaches the milestone, shrill calls will come of an asset bubble.

The investor community incorrectly believes that actual money is flowing into USTBonds as safe haven. That is not accurate in a majority sense, at least at first. The trend is initially created by the powerful Interest Rate Swaps applied by the big US banks. The only massive asset bubble in existence is the USTreasury Bond. It loudly proclaims USEconomic recession in a marquee billboard, joined by Chairman Bernanke’s admission following the FOMC meeting this week in a voice accompaniment. More still, the Gold/Oil chart eclipses the myopic focused Deflation concentration that ignores the monetary inflation consistently and errantly. They earn their Knucklehead label every passing day, from being half blind. They seem never to see the financial factor nor its effects. My contention is that their camp is lacking intelligence. They see only half the storm.

The conclusion, evident in the Gold/Oil chart, is that Inflation and Deflation are both running hard & fast, each strong & durable, both evident & ugly. The best description of the current situation is a the weather analogy, in a growing powerful tornado. It features the collision of high pressure zones against low pressure zones, described frequently in past reports. The high pressure is the result of thrust by central banks of monetary expansion that has actually wrecked the USFed balance sheet, and the EuroCB balance sheet. Each is the shameful owner of worthless mortgage bonds and sovereign bonds respectively, that nobody wants, that will never recover in price. The next phase will expand those balance sheets further, and wreck them beyond hope of repair in a recognized manner. The low pressure is the result of a powerful push by falling housing prices and big bank balance sheet insolvency. The consumers are handcuffed with lost discretionary funds in costs led by food & energy. The banks are making a transition from insolvent Zombies to undercapitalized Dead Made Men. They are soon to be recognized as dead. They are agents of the Syndicate, and thus guaranteed for slush fund income from multiple sources.

Hat Trick Letter – červenec doplněný o komentáře ke zlatu

Pondělí, Červenec 25th, 2011

Zlato – Čína, Indie a JP Morgan

CHINESE FUNDS POSITION FOR HUGE GOLD PURCHASES. THEIR FAITH IN THE USDOLLAR AND ITS VEHICLE THE USTBOND IS FAST VANISHING, IF NOT GONE ALREADY. THE CHINESE FUND MANAGERS SEEK ADDITIONAL WAYS TO INVEST MUCH LARGER SUMS IN GOLD BULLION. THE MIDDLE KINGDOM IS EXPANDING LIKE A MUSHROOM, WEALTH ACCUMULATED, GOLD PRODUCED, POPULAR SAVINGS, AND A GROWING SET OF INVESTMENT ALTERNATIVES. THE APPROVED INVESTMENT FUNDS ARE LINED UP AND GROWING. VAST SUMS OF MONEY ARE BEING INJECTED INTO THE FUNDS, DIRECTED TO PRECIOUS METALS.

The Chinese Govt has for years limited external investment opportunities by strict rules on approved foreign vehicles. Citizens have been permitted to invest in gold coins and other gold related items freely. They have limited alternatives, but changes slowly come to expand them. The official SAFE sovereign wealth fund, and other smaller funds, are designed to sterilize incoming FOREX reserves. The Beijing bankers must constantly eliminate the risk of new external funds bidding up the Yuan currency exchange rate. So they keep a mammoth supply of foreign securities, now totaling $3.197 trillion. They maintain the sterilized reserves carefully apart, and devote a minor amount of funds to gold bullion set in reserves. The latest announcement expands their planned gold purchases from tangents to the official channel within the general population. The strategy to break the global Anglo financial grip expands.

China‘s asset managers have been approved to raise $70 billion for gold purchases.


INDIAN GOLD DEMAND HAS GROWN TREMENDOUSLY. BUYING PATTERNS ARE CHANGING. NO LONGER ARE INDIAN CITIZENS ONLY BUYING AT FESTIVALS AND WEDDINGS. THEY ARE HEDGING AGAINST INFLATION AND PROTECTING THEIR FAMILY WEALTH.

The growing Indian economy, its middle class, and its wealth have bolstered gold demand. One driver during an unseasonal rise in the gold price has gone largely unnoticed, namely an unexpected surge of buying from India. The nation battles high price inflation, and sees gold as a means of wealth preservation, just like in China and throughout Asia. According to the most recent data from the World Gold Council, India and China accounted for 58% of global physical gold demand in 1Q2011. The scale of the Indian buying has been surprising because its gold market is usually quiet in June. The country has traditionally bought gold in seasonal patterns, dictated by festivals such as Akshaya Tritiya in May and Diwali in September, as well as the wedding season, which runs from September to December. Individuals nowadays are buying gold whenever the opportunity arises, whenever good bargains are available. Large bullion dealing banks reported a surge in buying from the country, an unusual factor in recent years. Sales to India from Union Bank of Switzerland were more than double the level of a year earlier. Tom Kendall at Credit Suisse said, “Undoubtedly over time the market is becoming less seasonal. What used to be wedding season now lasts for nine months of the year. There were not enough auspicious days of the year, so they found some more.” Indians have begun to approach gold more like Western investors, placing a proportion of their wealth into gold and buying opportunistically on dips.

An echo in unison comes from inside India. Atul Shah is head of commodities at the brokering firm Emkay in Mumbai. He confirms the change in popular buying patterns. He said, “Indian consumers are buying gold all year round. Whenever they see the price dip, they immediately buy more as they are confident that valuations are going to go up again.” Vishal Kapoor is head of wealth management at Standard Chartered in Mumbai. He said, “In recent times we have seen a shift in buying trends. What is different of late is the availability and the acceptance of gold as a financial asset, and not just as something you keep in a locker at home.”

 

JPMORGAN SIDESTEPPED THE STANDARD APPROVAL PROCESS IN BECOMING A COMEX METAL STORAGE VAULT OPERATOR. THE COMEX HAS UNDER 1/3 OF THE METAL IN INVENTORY CLAIMED. THE S.L.V. FUND CAN COVER AT LEAST 1/3 OF THE METAL IT SHOULD HAVE IN INVENTORY. EXTEND & PRETEND HAS TURNED NUCLEAR IN THE METALS MARKET. JPMORGAN IS STREAMLINING ITS SILVER FRAUD AND GUTTING OF THE SILVER EXCHANGE TRADED FUND IT SERVES AS CUSTODIAN FOR.

Coming to light in the main body of the internet journals, and to some extent the mainstream financial press, is the absurd imbalance between the huge JPMorgan short position in the silver futures market and the direct raids in physical silver at the SLV exchange trade fund managed by JPM. Their short position is several multiples of the amount of reported physical silver listed as available at the COMEX. It is debatable whether such inventory actually exists. Here is the big news, newer news. The Chicago Mercantile Exchange (CME) has approved JPM to operate a COMEX metals storage vault. The giant corrupt bank bypassed the full review process, thus raising the suspicion of many knowledgeable players in the precious metals market. They are well aware that JPM has by far the largest short position in paper silver in the universe, in addition to also having the largest proprietary position in OTC gold and silver derivatives. In no way does JPM have the capability to deliver the underlying physical metal. So they spread their cancerous reach. The crux of the problem is no legally enforced scrutiny. The CME decision of hasty approval confirms that it is unwilling to enforce legal scrutiny. Bear in mind that the White House Chief of Staff is William Daley, of JPM pedigree. The Syndicate rules.

Operating a gold and silver vault will enable JPM to exploit the fact that most metals players who take delivery of their metal typically let it remain at COMEX vaults for safekeeping. Usually this is an efficient practice, one of convenience that saves delivery fees, as long as the owners of the metal hold the vault operators accountable. Other current vault operators, especially HSBC and Scotia, have engaged in fractional bullion banking, holding a portion of deposits, leasing the majority. The new kid JPM is the biggest of all in its short position. The decision by CME is clearly permitting the fox into the hen house of the metals vault storage game. The COMEX is running extremely low on deliverable metal. Next expect secretive JPM raids with regulatory protective cover provided.

The fraud-ridden Exchange Traded Fund SLV is also running low on silver metal. The JPM firm is the vault custodian for SLV. The giant bank has routinely, according to scattered persistent insider reports, been using SLV inventory metal to cover COMEX shorts. The short position of SLV shares testifies to this abuse. The SLV vaults are not empty, just down 30% to 40% from what they should be if investors were actually investing in silver bullion. Maybe they are depleted much more. Truth In Gold goes further. They put forth the hypothesis that ties together criminal activity in the silver market by JPM. Truth In Gold believes the SLV fund is at least 1/3 covered, and the COMEX is less than 1/3 covered. This is the proximal motive for JPM to rush into the vaulting business, where they can conduct silver metal raids. Thus the urgency for quick approval by the COMEX, skirting the standard rules. JPMorgan is preparing to streamline an effective efficient fraud that will eventually gut the SLV exchange traded fund completely. In a year or two, it will be shown to have zero silver metal, having betrayed the stupid lazy investors who preferred the easy route of a click in the stock account, rather than the process of opening for instance a GoldMoney account that would be a legitimate metal account offering solid protection.

 

Jaká bude cesta k defaultu USA

A CONSENSUS HAS CRYSTALLIZED WITHIN THE WESTERN WORLD THAT GREECE WOULD INEVITABLY DEFAULT ON ITS DEBT. THE NATION CANNOT HONOR DEBT IN ANY PAYMENT SCHEDULE. DEBTS GROW AND REVENUES SHRINK. THE SAME IS TRUE OF THE UNITED STATES. THE ONLY CERTAINTY IS THE USGOVT DEBT DEFAULT. HOW IT HAPPENS IS ANYBODY’S GUESS. IT COULD BE SOME ROGUE EVENT. IT COULD BE THE BURDEN OF THE BROKEN PIECES WEIGHING ON THE SYSTEM. IT COULD BE A SYMPHONY OF DISPUTING VOICES, AS THE GRAND PERCEPTION CALLS THE AMERICAN LEADERS OF ALL TYPES GRAND LIARS AND EVEN CRIMINALS REGARDING THE FINANCIAL ACCOUNTING AND HIDDEN SLUSH FUND ACTIVITY.

The list of borken pieces weighing the USEconomic and financial system is as long as it is diverse. The following list addresses a systemic failure in progress. The propaganda and secretive movement of illicit funds using countless devices to cover up the gaping wounds, this propaganda gradually is being comprehended by the multitudes. Some call it the ‘Gong Show’ effect of being pulled off stage, having lost the attention or patience or credibility of the crowd. A USGovt debt default is inevitable. The nation is not immune from arithmetic and powerful forces pulling it apart. A forced debt writedown and partial forgiveness will be in the works before too many more months, my forecast. The forced event will have some overtures, but might hit a climax with actual global negotiations at a conference table in a year or so. The US political, banking, and military leaders will explain that it is in creditors best interests to comply. The result will be abandonment and a formalized revolt by those creditors, resulting in the isolation of the United States in the aftermath. The road in isolation leads deeper into the Third World. The possible factors contributing toward systemic failure and debt default are:

  • USCongress daring the system to declare a debt default
  • a sequence of failed USTreasury auctions
  • foreign creditor boycott in USTreasury auctions with more conviction
  • ruin of several primary bond dealers involved in USTreasury auctions
  • sudden foreign creditor sales of USTreasurys in a recognized dump
  • recognition globally that US financial markets are all totally corrupted
  • USDollar refused for crude oil payments by the Saudis
  • an Interest Rate Swap blowup that exposes the credit derivatives morass
  • a USTreasury Bond market convulsion as yields rise on the 2-year, 5-year, and 10-year bond in reaction to the growing USGovt deficits and galloping USEconomic recession
  • revelation of USTreasury counterfeit practices led by JPMorgan & Wall Street
  • revelations of extreme additions to USGovt debt obligations and debt overruns
  • calculation of the gaggle of additional off-budget deficit costs, led by war costs
  • realization that the USGovt is on the hook for AIG payments on Credit Default Swaps for PIIGS debt default in an uncalculable manner
  • realization that the US housing market is permanently crippled, never to recover
  • comprehension that the USEconomy is gaining momentum in its deterioration
  • European nations booting USMilitary off NATO airbases for narcotics transport
  • recognition of the USFed bankruptcy as ironic victim of ruined mortgage bonds
  • the risk of USFed resignation from its role as central bank agent of the USCongress
  • exposure of deep Wall Street involvement in narcotics money laundering
  • exposure of the USMilitary involvement in HAARP usage and genocide
  • the shutdown of all gold & silver futures contracts at COMEX
  • the entire world deciding to cut off the unlimited credit card for USEconomy, USGovt, and USMilitary in the interest of self-preservation

Something will occur as a flash point event that will trigger the tipping point. Some guess Iran, others Japan, but my suspected trigger is Italy or Spain coupled at the same time with Greece and Portugal. The command factors could be well marshalled if a natural disaster strikes, since it would touch all domains in the economic, financial, social, and political sphere. The United States will continue to transform into a Financial Iron Curtain, with very difficult conversion of money and great obstacles to transferring funds outside the country. The European sovereign debt crisis has begun to hit the US, the contagion clear to many, but some are blind. Wealth and financial security are in line as targets for some degree of destruction. The chance of a misjudgment or wrong assessment of impact, namely some bad decisions by politicians and bankers, could result in a sudden collapse much like the Lehman Brothers incident in September 2008. External events are also a possible vulnerability. Some events with the Saudis or Libya or Syria could trigger events going out of control in a faceoff with Russia & China. A big bank failure in Italy or Spain could trigger a sequence of nasty financial dominoes that reach London and the United States. A grand Ponzi Scheme is unraveling, whose center is the sovereign debt in general, but whose epicenter is the USDollar and its portable vehicle in the USTreasury Bond.

 

Názor na výměnu v čele MMF

THE DEVELOPMENTS AT THE INTL MONETARY FUND FORETELL OF GREAT CHANGES FOR THE UNITED STATES AND ANGLO BANKERS. GERMANY BACKS THE NEWLY APPOINTED HEAD LAGARDE. BEHINDTHE SCENES, NOTICE ATTACKS, REAR GUARD MOVEMENT, AND A RING FENCE AROUND THE AMERICAN BANKSTERS. IT IS NOT VISIBLE FROM ANY LIGHT SHINED BY THE US-PRESS. RECALL THAT EUROPE HAS DEVELOPED CLOSER TIES TO CHINA, WHILE ALIENATION AGAINST ANGLO BANKERS HAS BUILT UP. $$$

One must almost laugh. On a Wednesday, French finance minister Christine Lagarde was named IMF head. The very next day, Dominique Strauss-Kahn (DSK) was let go from house arrest, then told the evidence seemed inadequate to prosecute against him. Details on the case are not within the scope of this report. The objective apparently was to remove and replace DSK from his post at the IMFund. He had been advocating replacement of the USDollar in trade settlement, using the SDR instead. He had called for usage of a new SDR-backed bond to replace the USTBond in global banking. He had urged bond holders to take losses in sovereign debt bailout deals. The task to replace him instead was executed flawlessly. Again, push aside the details of the case, probably a rape, given his past pattern of similar actions in hotels across the world. So DSK is done. Let’s see if Lagarde promotes broader currency basket usage that compromises the Special Drawing Rights concept. Let’s see if Lagarde obstructs US & UK initiatives. A couple sources pitched in from Europe to offer some hidden angles. They will not be quoted, too volatile, salty, and dangerous the information. For a certain strain of card carrying prominent bankers, they are given notice. They are not safe any longer and are marked for takedown. Lagarde is a European first and French second, a lethal combination and a challenge for the US to deal with. She has no tolerance for criminal bankers, and acts decisively. She commands the respect of many as a professional, even those from the gold camp of sound money. She defines well the rules of engagement. She is described as an antidote to many leading American figures. Her appointment was a brilliant choice, thus filling a void created by US banker ploy and subterfuge. Word has it she has the 100% backing from Berlin, not only because she speaks fluent German. One contact believes the IMF sequence of events has resulted in the United States being ring fenced. Few know that Treasury Secy Geithner speaks fluent Chinese. He is considering a resignation, most likely due to Chinese creditors telling to pack up and leave. It is early, but it seems the events to depose DSK might have resulted in even more solid opposition to the Anglo banker syndicate.

 

 

________________________________________

Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.proinvestory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – červenec 2011

Čtvrtek, Červenec 21st, 2011

Obvykle publikuji výňatky z Hat Trick Letter až po publikování obou jeho reportů. Tentokrát jsem se rozhodl nečekat týden na další report a publikuji výňatky z první části. Výňatky z druhé budu publikovat pravděpodobně v průběhu příštího týdne.

 

Jaká bude cesta k defaultu USA

A CONSENSUS HAS CRYSTALLIZED WITHIN THE WESTERN WORLD THAT GREECE WOULD INEVITABLY DEFAULT ON ITS DEBT. THE NATION CANNOT HONOR DEBT IN ANY PAYMENT SCHEDULE. DEBTS GROW AND REVENUES SHRINK. THE SAME IS TRUE OF THE UNITED STATES. THE ONLY CERTAINTY IS THE USGOVT DEBT DEFAULT. HOW IT HAPPENS IS ANYBODY’S GUESS. IT COULD BE SOME ROGUE EVENT. IT COULD BE THE BURDEN OF THE BROKEN PIECES WEIGHING ON THE SYSTEM. IT COULD BE A SYMPHONY OF DISPUTING VOICES, AS THE GRAND PERCEPTION CALLS THE AMERICAN LEADERS OF ALL TYPES GRAND LIARS AND EVEN CRIMINALS REGARDING THE FINANCIAL ACCOUNTING AND HIDDEN SLUSH FUND ACTIVITY.

The list of borken pieces weighing the USEconomic and financial system is as long as it is diverse. The following list addresses a systemic failure in progress. The propaganda and secretive movement of illicit funds using countless devices to cover up the gaping wounds, this propaganda gradually is being comprehended by the multitudes. Some call it the ‘Gong Show’ effect of being pulled off stage, having lost the attention or patience or credibility of the crowd. A USGovt debt default is inevitable. The nation is not immune from arithmetic and powerful forces pulling it apart. A forced debt writedown and partial forgiveness will be in the works before too many more months, my forecast. The forced event will have some overtures, but might hit a climax with actual global negotiations at a conference table in a year or so. The US political, banking, and military leaders will explain that it is in creditors best interests to comply. The result will be abandonment and a formalized revolt by those creditors, resulting in the isolation of the United States in the aftermath. The road in isolation leads deeper into the Third World. The possible factors contributing toward systemic failure and debt default are:

  • USCongress daring the system to declare a debt default
  • a sequence of failed USTreasury auctions
  • foreign creditor boycott in USTreasury auctions with more conviction
  • ruin of several primary bond dealers involved in USTreasury auctions
  • sudden foreign creditor sales of USTreasurys in a recognized dump
  • recognition globally that US financial markets are all totally corrupted
  • USDollar refused for crude oil payments by the Saudis
  • an Interest Rate Swap blowup that exposes the credit derivatives morass
  • a USTreasury Bond market convulsion as yields rise on the 2-year, 5-year, and 10-year bond in reaction to the growing USGovt deficits and galloping USEconomic recession
  • revelation of USTreasury counterfeit practices led by JPMorgan & Wall Street
  • revelations of extreme additions to USGovt debt obligations and debt overruns
  • calculation of the gaggle of additional off-budget deficit costs, led by war costs
  • realization that the USGovt is on the hook for AIG payments on Credit Default Swaps for PIIGS debt default in an uncalculable manner
  • realization that the US housing market is permanently crippled, never to recover
  • comprehension that the USEconomy is gaining momentum in its deterioration
  • European nations booting USMilitary off NATO airbases for narcotics transport
  • recognition of the USFed bankruptcy as ironic victim of ruined mortgage bonds
  • the risk of USFed resignation from its role as central bank agent of the USCongress
  • exposure of deep Wall Street involvement in narcotics money laundering
  • exposure of the USMilitary involvement in HAARP usage and genocide
  • the shutdown of all gold & silver futures contracts at COMEX
  • the entire world deciding to cut off the unlimited credit card for USEconomy, USGovt, and USMilitary in the interest of self-preservation

Something will occur as a flash point event that will trigger the tipping point. Some guess Iran, others Japan, but my suspected trigger is Italy or Spain coupled at the same time with Greece and Portugal. The command factors could be well marshalled if a natural disaster strikes, since it would touch all domains in the economic, financial, social, and political sphere. The United States will continue to transform into a Financial Iron Curtain, with very difficult conversion of money and great obstacles to transferring funds outside the country. The European sovereign debt crisis has begun to hit the US, the contagion clear to many, but some are blind. Wealth and financial security are in line as targets for some degree of destruction. The chance of a misjudgment or wrong assessment of impact, namely some bad decisions by politicians and bankers, could result in a sudden collapse much like the Lehman Brothers incident in September 2008. External events are also a possible vulnerability. Some events with the Saudis or Libya or Syria could trigger events going out of control in a faceoff with Russia & China. A big bank failure in Italy or Spain could trigger a sequence of nasty financial dominoes that reach London and the United States. A grand Ponzi Scheme is unraveling, whose center is the sovereign debt in general, but whose epicenter is the USDollar and its portable vehicle in the USTreasury Bond.

 

Názor na výměnu v čele MMF

THE DEVELOPMENTS AT THE INTL MONETARY FUND FORETELL OF GREAT CHANGES FOR THE UNITED STATES AND ANGLO BANKERS. GERMANY BACKS THE NEWLY APPOINTED HEAD LAGARDE. BEHINDTHE SCENES, NOTICE ATTACKS, REAR GUARD MOVEMENT, AND A RING FENCE AROUND THE AMERICAN BANKSTERS. IT IS NOT VISIBLE FROM ANY LIGHT SHINED BY THE US-PRESS. RECALL THAT EUROPE HAS DEVELOPED CLOSER TIES TO CHINA, WHILE ALIENATION AGAINST ANGLO BANKERS HAS BUILT UP. $$$

One must almost laugh. On a Wednesday, French finance minister Christine Lagarde was named IMF head. The very next day, Dominique Strauss-Kahn (DSK) was let go from house arrest, then told the evidence seemed inadequate to prosecute against him. Details on the case are not within the scope of this report. The objective apparently was to remove and replace DSK from his post at the IMFund. He had been advocating replacement of the USDollar in trade settlement, using the SDR instead. He had called for usage of a new SDR-backed bond to replace the USTBond in global banking. He had urged bond holders to take losses in sovereign debt bailout deals. The task to replace him instead was executed flawlessly. Again, push aside the details of the case, probably a rape, given his past pattern of similar actions in hotels across the world. So DSK is done. Let’s see if Lagarde promotes broader currency basket usage that compromises the Special Drawing Rights concept. Let’s see if Lagarde obstructs US & UK initiatives. A couple sources pitched in from Europe to offer some hidden angles. They will not be quoted, too volatile, salty, and dangerous the information. For a certain strain of card carrying prominent bankers, they are given notice. They are not safe any longer and are marked for takedown. Lagarde is a European first and French second, a lethal combination and a challenge for the US to deal with. She has no tolerance for criminal bankers, and acts decisively. She commands the respect of many as a professional, even those from the gold camp of sound money. She defines well the rules of engagement. She is described as an antidote to many leading American figures. Her appointment was a brilliant choice, thus filling a void created by US banker ploy and subterfuge. Word has it she has the 100% backing from Berlin, not only because she speaks fluent German. One contact believes the IMF sequence of events has resulted in the United States being ring fenced. Few know that Treasury Secy Geithner speaks fluent Chinese. He is considering a resignation, most likely due to Chinese creditors telling to pack up and leave. It is early, but it seems the events to depose DSK might have resulted in even more solid opposition to the Anglo banker syndicate.

 

 

________________________________________

Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – červen 2011

Čtvrtek, Červen 23rd, 2011

Spekulace nad Obamovou návštěvou Velké Británie

PRESIDENT OBAMA VISITED ENGLAND FOR NO STATED PURPOSE IN THE OFFICIAL CHANNELS. IT WAS ACTUALLY A LAST DITCH ATTEMPT TO HALT THE LAST CHAPTER OF A $TRILLION FRAUD SCHEME, ONE PERPETRATED BY THE BANK OF ENGLAND AND THE USGOVT LED BY WALL STREET FIRMS. LONDON WANTS THE GIGANTIC FRAUD CHAPTER TO COME TO A CLOSE, YIELDING TO COURT PRESSURE. WITNESS THE END OF THE AMERICAN EMPIRE, WHOSE LATEST CHAPTER HAS FEATURED GLOBAL FRAUD WITHOUT HISTORICAL PRECEDENT, LARGER EVEN THAN WIDELY REPORTED. $$$

This story extends from a very murky and controversial fraud role program, which many analysts call kooky. Some call it the Wanta Funds. The Jackass has avoided the topic for a long time. Yet its validity has been confirmed by my most reliable source, a gold banker. It is real, it is ugly, and it is huge, the interest payments for which total over $1 trillion over a full decade. So it is worth stealing, as Hank Paulson would attest. The fund is part of a much bigger network of fraud role programs totaling multiple $trillionS for which Fannie Mae and other trust funds (Social Security Trust) have been involved. The concept is to lock down a huge fund, steal its interest, and keep the public in the dark. The USDept Treasury (aka Goldman Sachs) has been managing the theft for close to 15 years along with the Bank of England. During the Obama visit to London, a surprise email arrived without solicition, since it was deemed very important. A second independent source confirmed the same motive for the official London visit. He has USGovt, USMilitary, and US Homeland Security connections. The two sources have dovetailed nicely in confirmation of certain stories. For instance, each source in September 2010 mentioned Papa Bush providing narcotics money aid to Bank of America in order to prevent an overnight bank default. They each mentioned the exact same $13 billion figure without my prompt.

The message from the gold banker cited how Obama had no good reason to be visiting the British bankers. He claimed Obama went there to beg the London bankers not to discontinue obstacles for release of the giant fund of money that had been highjacked. The Intl Court of the Hague has been involved, as has Interpol, to apply pressure on the criminal banker leaders in England and the United States. Upon inquiry of whether the appeal centered upon Wanta Funds, he said yes, he believes so. Something big is going on behind the curtains. Here is the detailed comment from the gold banker. He wrote, “This is nothing but the final and desperate attempt to avoid the unavoidable. The global Anglo-American dominance is coming to an end. The Bank of England has decided to pull out of the grand fund highjack game that has been so profitable to the US-Anglo bankers for over ten years. Just look at how the Europeans dealt with Obama when he visited Poland. Lech Walesa even refused to meet with Obama, by publicly stating that he was not available for photo ops. They slapped him in the face repeatedly and then told him to kiss off. His sleeveless inappropriate wife did not even accompany her husband to Poland, since the Poles refused to offer a ladies program. Last night the German Chancellor Merkel was forced to circle in Turkish air space for two hours since the Iranians canceled the over-flight permit for her to go to India. The Iran lockout conducted by the Americans is causing huge problems in Europe. Another plane with some German ministers, that had left one hour earlier, was allowed to pass without a problem. If one adds up all the little details here and there, it adds up to a lot of serious change in the wind. The writing is on the wall and it is ugly. One can sense that something profound is in the air. Like a mega thunderstorm rolling in. You know it is coming but not how many lightning strikes will happen or how hard the rain will be.”

 

Bude QE3 a co případně může znamenat?

THE FACE OF QE3 IS STARTING TO TAKE SHAPE. IT WILL BE MAJOR FOREIGN CENTRAL BANKS AND BIG USBANKS THAT PURCHASE USTREASURY BONDS AT THE BEHEST OF THE USFED. INSTEAD OF BEING ISOLATED AS SOLE USTBOND BUYERS, THE USFED WILL URGE THE MAJORITY OF BIG PLAYERS TO JOIN OR WATCH THE SYSTEM FAIL. UNDER THE DECEPTIVE PLOY THAT BIG USBANKS MUST RAISE THEIR RESERVE REQUIREMENTS, THEY WILL BE COERCED TO PURCHASE MORE BUBBLY USTBONDS. THE NEED SUPPOSEDLY DID NOT EXIST SEVERAL MONTHS AGO. AS QE2 SUPPOSEDLY ENDS, THEY MUST CONFORM TO THE BASEL RULE.

With the advertised end of Quantitative Easing Chapter II, a total ruse sham lie, the USFed and USDept Treasury must lead the crowd into USTreasury Bonds, even if at bubble asset prices. The stock market has been undermined, fully forecasted here with an exodus into bonds right on schedule. What remains is inducing the big US banks, given the monstrous volumes necessary to cover USGovt debt issued and rolled over. The edict started out as a preliminary indication of 7% asset reserves to be required by the large banks, in conformity all of a sudden to the Basel III Rules. So the final 3% rule could be seen as a compromise, less abhorrent when swallowed. A mass of buyers is required to fill the void. The USFed and Treasury henchmen can fill only so much with hidden devices such as the Caribbean centers that mask Bank of England support for their colony. Notice the scare tactics deployed against their own bankers. The excuse of Basel III enforcement provides timely and credible cloud cover. The USTBond and USDollar managers will succeed in only buying a little time before QE3 must be announced.

Without new QE3 funding, the system will utterly collapse. With new QE3 funding, given that marginal debt brings negative results, the system still heads toward collapse. As the ongoing QE continues, it will further debase the USDollar and lead to even greater declines in foreign exchange rates. The USDollar will lead the USGovt debt default process. The prospect for foreign creditors to hold or purchase USGovt debt securities soon could be perceived as a losing proposition, since the inefficiency has turned grotesque. That might make the rollover of USGovt debt and new debt issuance progressively more difficult. The alternative is much higher taxes (not likely) or much more continued monetary hyper-inflation (extremely likely). The concept that USFed monetary expansion is free, or that USGovt debt continues to be risk-free is absurd.

QE3 IS DEMANDED, NOT BECAUSE IT WILL CAUSE USECONOMIC RECOVERY. INSTEAD, IT WILL PREVENT A SYSTEMIC COLLAPSE, OR AT LEAST DELAY IT. HOWEVER, ITS PREVENTION OR DELAY COMES WITH A HEAVY COST OF A RISING COST STRUCTURE FROM THE DECLINING USDOLLAR. PRESSURE FOR CONTINUED QUANTITATIVE EASING IS OBVIOUS. $$$

A false impression has widely been promulgated. The USEconomy is weak and breaking down, moving toward a worse recession. The recession of 2008 never ended. It needs all manner of treatment, but proper treatment is not remotely being considered. The blunt force of QE3 will not bring about a USEconomic recovery. The extension of Quantitative Easing will be to prevent a jump in USTBill yields, USTBond yields, and Mortgage Bond yields, thus avoiding higher consumer loan rates and mortgage rates, and even worse. The extension of QE by the USFed will be designed to prevent a collapse. It would be to prevent a series of visible failed USTreasury auctions. It would be to prevent at least one big US bank failure from sudden credit asset declines linked to an accelerated housing bust and mortgage bond fiasco. My bet is on Bank of America to undergo failure. Ultimately, the wretched unsupportable condition of the USEconomy, the US banks, the US households, and the USGovt guarantees continuation of Quantitative Easing. The USFed and USDept Treasury are actively pursuing a termporary Scorched Earth program to send the financial markets downward, even as the laundry list of horrendous USEconomic statistics reads endlessly. The degradation of the USEconomy is broad, and deep with great momentum. Instead, the QE3 would prevent a move toward collapse, but at a heavy cost. The avoidance of collapse would come with much more price inflation, leading to civil unrest. The entire cost structure will increase again, with more visible food & gasoline rising prices. Witness the degradation and deterioration into an inflationary recession, later to turn into a depression.

v  Basically, QE2 was a failure, so it will be repeated. QE3 will prevent a more rapid financial sector decline and possible collapse.

v  The QE2 provided demand for USTreasury auctions, when most foreign creditors went on a buyer’s strike. So QE will be repeated.

v  The housing market has resumed its downward path, with frightening problems to bank loan portfolios. Foreclosures continue. So QE will be repeated.

v  The big US banks remain insolvent, loaded down by a mountain of one million REO homes in inventory. Buyers of mortgage bonds have disappeared. Mortgage bond yields are rising. So QE will be repeated.

v  The USGovt deficit picture is a full blown nightmare. Rather than see market mechanisms kick into gear, with higher interest rates imposed, the leaders will continue on the hyper monetary inflation path. So QE will be repeated.

v  Talk of the risk trade counter to the USDollar ending is nonsense. Weimar has met Wall Street, the syndicate handlers of the USGovt and partners to US security agencies. The Printing Pre$$ with US nameplate cannot be stopped. So QE will be repeated.

v  The Gold & Silver prices will move up hard, as soon as the light bulb goes on that QE3 is imminent without interruption. One must be a total moron not to anticipate its immediate installation. To decide not to continue QE would force failures upon major US banks.

v  The USFed is all bluff with no good cards in their poker hand. They will wait for stocks to be a little cheaper and both sides of the USCongress to beg for QE3.

 

Řecko a EUR

THE BANKER WARS CONTINUE. ANOTHER COSMETIC BAILOUT IS PLANNED FOR GREECE. IT WILL NOT LAST A MONTH BEFORE FALLING APART. HOWEVER, BIG EUROPEAN AND LONDON AND AMERICAN BANKS ARE HIGHLY VULNERABLE TO A EUROPEAN DEBT DEFAULT BY ANY NATION. THEIR EXPOSURE IS HUGE, ENOUGH TO CAUSE POTENTIAL BANK FAILURES.

The more disturbing note came from a deep European banker source with strong connections to global banks. He responded to the Jackass comment that the Greek bailout would not stand the test of one month’s time, that the big European bankers are badly exposed, and a Greek debt default would send grand ripples both to London and New York City. He wrote, “Spot on. Citigroup has a tremendous exposure in Europe. Once Greece blows, then things will get very ugly. The Greek Govt default is the event that will ripple across all of Europe, even London, and force some important bank failures. Trichet was just awarded the Karls Prize in Aachen Germany. This is a very prestigious prize that Vaclav Havel received. Trichet delivered his acceptance speech in German. Take it as a clear sign that he, as a Frenchman, has accepted how the music is made in Berlin. The new axis is Berlin-Moscow-Beijing, and the new money will be commodity backed. It is a done deal.” He was referring again to the New Nordic Euro currency, to contain a gold component. Its launch is very soon, no more definitive timing.

THE COMMON EURO CURRENCY IS KILLING THE SOUTHERN EUROPEAN NATIONS. IT REMOVES ALL LATITUDE IN POLICY TO REACT TO THE EXTREME CRISIS THAT EXTENDS FROM THE FINANCIAL SECTOR TO THEIR ECONOMIES. PRESSURE IS ENORMOUS TO REVERT TO OLDER DOMESTIC CURRENCIES. HOWEVER, THE BIG BANKS WANT FULL REDEMPTION, IN ORDER TO AVOID FAILURES. THE EURO CENTRAL BANK IS THE BAGHOLDER, JUST LIKE THE USFED.

The debt default will soon trigger the Credit Default Swap payouts. Any alteration to the debt contract represents a default, such as extension of time in relaxing payment terms, and surely partial debt forgiveness in restructure. The European bankers are going to great lengths to avoid debt default, even redefining a default. The ratings agencies are a thorn in their side, reminding of the definition with frequency and publicly. Since the Southern European nations are so slow to leave the European Monetary Union, where the Euro is the common currency, the Germans might just exit the Euro themselves and introduce a launch of the Nordic Euro currency, an extremely disruptive plan that would cause extreme disorder. Ironically, the pressure not to exit the Euro altogether for the Greeks and Portuguese et al is coming from the big European bankers. The Greek people want a debt default. The Greek leaders are under great pressure to continue the bailout loans. The recent wrinkle is for the big European banks to demand collateralization of the huge loans. That means rather than default, the big players want to seize national assets like large corporate stakes, factories, ports, telecom networks, and so on. The advantages to Greece for a debt default are great, and do not serve the big banks well.

The reversion to the Drachma currency by Greece would come with a certain 30% to 50% Drachma devaluation. So the big banks in Europe would suffer a sudden significant loss. When the Athens leaders go back to the Drachma (from the Euro) and devalue by up to 50%, the losses to the banks holding the Greek Govt debt will be painfully compounded.

 

________________________________________

Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – květen 2011

Sobota, Květen 28th, 2011

Co je po světě v běhu

Four important events and developments are in progress.

1) Introduction of New Nordic Euro, a currency for Central Europe usage that cuts out the crippled insolvent Southern European nations known as the PIGS. They have been beneficiaries to $300 to $400 billion per year of German generosity. The PIGS nations refuse to revert to their older native currencies every bit as much as the European bankers refuse to permit defaults by the PIGS nations on their debt or major writedowns.

2) The supposed end of QE2. The USFed has no intention of ending the heavy debt monetization. Instead, they are prepared to lie and deceive, to continue the bond purchases in more secrecy, even to extend the purchases to a Global QE that includes buying all that Japan sells during its natural and economic crisis. The Japan woes have only begun.

3) An Arab announcement that heralds an end to exclusive US$ payments for oil, which would bury the Petro-Dollar after almost 40 years since the 1973 Embargo. However, the Arabs must tread lightly and play the delicate game, since large arms purchases from US defense contractors continue without end, even increase.

4) A Russia-Europe Accord for trade settled outside the USDollar. Russia is the source of tremendous natural resources, and the site of a complete turnaround in financial wealth development. They are making stronger ties with Europe, in particular Germany.

 

Krach Řecka – co by to znamenalo

A GREEK GOVT BOND DEFAULT IS ASSURED, AS GERMANY PUSHES THEM OVER THE EDGE. THEY ARE FED UP WITH THE ENTIRE SOUTHERN RIM OF BANKRUPT EUROPEAN NATIONS. THE BACKLASH OF REALITY WILL BE THE IMPACT TO EUROPEAN BANKS WHEN THE GREEK DEBT IS RESTRUCTURED, AS IN MASSIVE WRITEDOWNS. LAST WEEK A RESTRUCTURING PLAN WAS REJECTED, IN A CLASH BETWEEN BANKERS AND POLITICIANS. THE BANKERS FEAR A CASCADE OF BANK FAILURES, LARGE EURO CENTRAL BANK LOSSES, AND A CREDIT DERIVATIVE MELTDOWN

A soft restructuring, also referred as reprofiling, involves a pure lengthening of maturities for existing bonds without changing the principal and the interest rates. The big European banks, led by Germany, wish to avoid a chain reaction of claims linked to Credit Default Swaps, which would be forced to pay up. They are an equal scourge in Europe and hidden motivation for many decisions. The cold reality is that any debt restructuring would have a direct impact on Greek banks. Their capital would be instantly wiped out. The banks would become dead credit engines, with grave implications to the Greek Economy. The German offices of the EuroCB are concerned that allowing Greece to renege on some of its obligations would create similar expectations by Portugal and Ireland, other members of the extended PIIGS pen. In other words, default would have rippled effects in contagion. The EuroCB is caught in a trap. They would stand to lose also, since they have purchased Euro 76 billion worth of bonds from fiscally stressed countries in the past year, as buyer of last resort. In an intriguing survey, 85% of international investors surveyed by Bloomberg recently said Greece will probably default on its debt, with the majority predicting the same fate for Ireland and Portugal. The Greek Govt debt is zooming skyward. It will reach 166% of GDP by next year, the highest for any country in European history, soon to rival Japan. See the Bloomberg article (CLICK HERE). Any restructure of Greek Govt debt would remove their bonds from usage as collateral with the Euro Central Bank. Greece would be totally isolated, but free to revert to their native currency and a stern devaluation. The cascade effect would be profound, extending to the big European banks. My belief is that the CDSwaps might renege and not pay out, as the shadow banking system is corrupt to the core. They are a true Ponzi Scheme protected in the US and Europe.

Rejection has begun from the upper periphery, regardless of the core in Europe. Norway is a unique nation, with great wealth accumulated from North Sea oil operations. They, like Germany, are lenders in Europe. The nation of Norway will halt all further financial aid payments to the embattled debt soaked Greece. The Oslo Parliament cited the unfulfilled obligations from past bailout rescue deals. Norway is a member of the European Economic Area, and a solvent European nation. They urge an initiative to let the chips fall where they may, with Greece serving as the first chip to fall. The other PIIGS nations are all lined up to follow Greece on the insolvency path to default, just a matter of time. See the Zero Hedge article (CLICK HERE). After enough creditor rejection and futility to roll over debt, Greece will eventually face the inevitable and revert to the Drachma currency, then devaluate it 30%, maybe over 50% eventually. What is preventing it is NOT the Greeks but rather the big EuroZone banks that stand to lose huge. Some banks will fail, maybe many banks, even very big banks.

THE CASCADE OF EVENTS FOLLOWING THE GREEK GOVT DEBT DEFAULT WILL BE TRULY AWESOME TO WATCH. THE POWERZ WILL ATTEMPT TO HOLD IT TOGETHER, BUT ALL HELL WILL BREAK LOOSE. THE MOMENTUM OF THE CASCADE WILL BE POWERFUL AND GROW FAST. THE ONLY QUESTION IN THE FOREFRONT IS WHAT CONSTITUTES A DEFAULT TO TRIGGER THE IMPLOSION PROCESS? THE RIPPLES WILL SPREAD ACROSS THE P.I.I.G.S. NATIONS AND TO THE MAJOR EUROPEAN BANKS. REVERSION TO OLD CURRENCIES WILL BE ALL THE RAGE, COMPLETE WITH DEEP DEVALUATIONS AND PROUD NATIONALISM TAKEN TO THE STREETS. RIOTS AND PROTEST WOULD MIX WITH DEFIANCE AND NATIONAL PRIDE IN A BIZARRE DISPLAY, A CAULDRON OF CHAOS. THE WILD CARD IS THE CREDIT DEFAULT SWAPS AND THEIR UNPREDICTABLE PATH OF DESTRUCTION IN THE FALLOUT ZONE. GOLD WOULD AND WILL SOAR.

 

…a co se děje v eurozóně

THE EURO CENTRAL BANK RELIEVED PRESSURE ON THE USDOLLAR BY INDICATING NO RATE HIKE AT THE NEXT MEETING. THE USDOLLAR RESPONDED VERY WELL, IGNITING A RALLY OVER 3%. BUT HIGHER PRICES WILL RESULT, ALONG WITH A POSSIBLE GOLD PRICE BREAKOUT. DISTRESS IN PORTUGAL AND GREECE CONTINUE. GREEK GOVT DEBT SUFFERED A BROAD DOWNGRADE, AND TALK OF BOTH BANK LIQUIDATIONS AND A FORCED GREEK EXIT FROM THE COMMON EURO CURRENCY HAVE INCREASED. THE COMPROMISE COULD BE A GREEK DEBT RESTRUCTURE. PRESSURE FOR PORTUGAL TO SELL SOME GOLD BULLION HAS COME, BUT A FIGHT OF BUYERS COULD ENSUE. THE CHINESE WORK IN THE BACKGROUND, USING THEIR LEVERAGE. A BAILOUT OF SPANISH DEBT AND THEIR BANKS IS NEXT ON THE AGENDA, AS SPAIN REMAINS THE BIG ENCHALADA IN THE EUROZONE. THEIR SITUATION FESTERS WITHOUT ANY SEMBLANCE OF TOUGH DECISIONS MADE. THE NEW NORDIC EURO IS ON TRACK, BACKED BY A GOLD COMPONENT. $$$

Since the beginning of year 2011, the Euro currency has risen from 130 to 148, and in the last two weeks fallen back toward the 140 level. The Euro turndown occurred as a direct result of the Euro Central Bank indicating not to hike interest rates a second time at the next official meeting. Speculators had pushed the Euro upward with gusto, sensing a USDollar death spiral not visible from inside the US Dome of Perception. The US, Europe, and Japan are taking turns in lifting the other currencies in the grand Competing Currency War. The solid signal of no EuroCB rate hike helped turn the USDollar upward from the perilous support at the 73 level, were it was staring at the abyss. Brussels and their German directors provided the impetus in relief. Active efforts are complemented by market efforts. Distress in Greece and Portugal over sovereign debt, amply publicized, worked to push down the Euro exchange rate at the same time. The EuroZone economy is harmed by a rising Euro currency. German exports are at risk, and have been protected by the monetary decision. More rate hikes should be anticipated by the EuroCB later this year. The EuroZone price inflation is still rising, kept down actually by a higher Euro exchange rate. So the lower Euro will work to lift price inflation, even as the adjustable rates will rise and render damage to banks like in Spain burdened by a mountain of mortgage loans on the books. Slow growth or flat growth is the norm. The Euro Central Bank is under great pressure. Bailout out nations of Greece, Portugal, and Ireland have suffered massive bond yield increases, the Greek’s over 20%, which have resulted in old bonds to lose up to half their value. More bailouts are in progress. The IMF is to share in the heavy losses. Trichet was stubborn and defiant, referring to future rate hikes but without debt restructure. Meanwhile, the Gold price in Euros is on the verge of a major breakout above the 1075 Euro mark. The Europeans bowed to US pressure, during a time when USGovt deficits are alarmingly high, and the budget deliberations seem fruitless. The Americans argue endlessly over $38 billion, when the deficit exceeds $1500 billion. As a team, the two major branches fail the reality test.

The insolvent European big banks must be purged and liquidated in an orderly manner, according to Timo Soini writing in the Wall Street Journal Europe. The True Finn party leader was aggressive and almost hostile in his words, describing the banks as suffering from gangrene, both public and private. He urged amputations to save the body. He called the repairable potential of the sovereign debt condition in Greece, Ireland, and Portugal a grand lie, whose official version takes the people of Europe for idiots. In a remarkable display, the Wall Street Journal edited, censored, and republished the article, scrubbing all negative comments by Soini. He must have ruffled some important bankers who do not favor liquidation and prefer to mold the citizenry into placid idiots.

________________________________________

Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – duben 2011

Úterý, Duben 26th, 2011

Jsou na tom USA jako Řecko? – Is US Economy In the Similar Situation As Greece?

THE USECONOMY IS AT HIGH RISK OF A GREEK STYLE FINANCIALCOLLAPSE, DESPITE ALL THE ADVANTAGES OF CONTROLLING THE GLOBALRESERVE CURRENCY AND ITS MONETARY SPIGOT. AT THE ROOT OF THEPROBLEM IS MAMMOTH DEBT AND PHONY ACCOUNTING, THE HUGE GAP FORWHICH CREATES A RISK OF COLLAPSE FROM LOST CREDIBILITY AND INTEGRITY. THE USFED IS SOWING SEEDS OF INFLATION AND FOREIGNRESENTMENT. THE MORAL HAZARD OF BIG USBANK BAILOUTS HAS CAUSEDSEVERE RISK OF FURTHER FINANCIAL CRISIS. THE RESPONSE TO CRISIS HASRAISED THE RISK OF AMPLIFIED CRISIS.

Rob Arnott believes the United States is in great danger of a Greek style collapse. At Research Affiliates he manages $75 billion in assets. He gives an grave warning. He said, “I think the US is playing Russian roulette the same way the Greeks were. We are using phony accounting just as they were using phony accounting. The GAP accounting, if it was applied to the US government, would have shown our deficit in 2009 not at 10% of GDP, but at 18%. The 18% of GDP [is arrived at] if you factor in new unfunded social security and medicare obligations, if you factor in SEs, if you factor in the off-balance sheet spending that does not appear on the balance sheet. If you factor all of these in, we spent 18% more than w eproduced as a nation in 2009. Well, that is horrific. And so is it worse than Greece efore they hit the wall. Under correct accounting it is worse.

Bernanke has been on record as saying, ‘LOOK, THE STOCK MARKET IS UP, PEOPLE ARE OUT  SPENDING, AND THEREFORE THIS IS WORKING.’ What he adamantly denies is that it ripples blond stocks. But it is ridiculous that the cascading effect would stop at the convenient point of equities before it reaches the inconvenient point of commodities. Of course it is affecting commodity prices all over the world, and of course that is creating some geopolitice instability. So is the Fed sewing seeds of dissension in parts of the world where the consumption basket is mostly commodities? Yeah of course it is. The Fed will not acknowledge it but it is true. If too big to fail, [the big banks have been allowed to] roll the dice and play the moral hazard game of heads I win multi-billion dollar bonus pools, tails the taxpayer takes multi-hundred billion dollar hits. That is wrong. We looking at a situation where we have allowed moral hazard to create a financial crisis and the response to that financial crisis is to allow the moral hazard issues to become more severe than ever. So I do view the current situation as fraught with a certain measure of risk.”

USGOVT DEBT IS AT A TIPPING POINT. UNLIKELY DEBT REPAYMENT, ESCALATING DEBT LEVEL, AND GROWING INSOLVENCY ARE GREAT THREATS. URGES HAVE COME FOR THE USFED TO HALT ITS DEBT MONETIZATION AND MONETARY AGGREGATE GROWTH SPIGOT. WARNINGS COME FROM INSIDE THE USFED  ITSELF, HARDLY A COHESIVE BAND IN DEFENSE OF A FORTRESS.

USFED MONETIZATION WILL CONTINUE. THE QE2 WILL GRADUALLY BECOME MELDED WITHIN THEIR REGULAR MONETARY POLICY. THE FOUR BIGGEST DOMESTIC REASONS FOR CONSTANT QUANTITATIVE EASING ARE 1) ABSENCE OF USTREAUSURY BOND BUYERS, 2) THE GARGANTUAN USGOVT DEFICITS, 3) THE WRECKED HOUSING MARKET, AND 4) THE BLOAT OF PROPERTY RELATED TOXIC ASSETS ON THE BANK BOOKS. THEN ADD ON THE FOREIGN POLICY IN OPPOSITION TO THE CANCEROUS PROPAGATION FROM THE USFED. AS EVIDENCE OF THE CANCER, NOTICE THE MARGINAL BENEFIT OF NEW DEBT. IT IS LONG PAST SATURATION, WHERE PRICE INFLATION HAS NO MORE RESISTANCE.

 

Inflace v USA se začíná projevovat. – US Inflation Arrived.

PRICE INFLATION HAS ALREADY ARRIVED IN THE USECONOMY. THE WAL-MART EXECUTIVES AND THEIR FOLLOWERS ARE WELL AWARE. NOTICE THEY ARE NOT FEATURED ON THE NEWS NETWORKS MUCH. PRICE INFLATION IS COMING FROM SEVERAL CORNERS (MATERIALS, SUPPLIERS, SHIPPING, AND FOREIGN EXPORTERS) TO THE USECONOMY. THE MAJOR RETAIL CHAIN IS THE FLAGSHIP, THE CANARY, THE BILLBOARD.

Wal-Mart is an accurate gauge of the USEconomy, since it is so large and dominant as a detail chain, the world’s biggest. CEO Bill Simon expects price inflation, serious inflation in his works, in the months ahead for clothing, food, and other products. Despite being in a better position than competitors to minimize the price effects, still Simon expects price inflation to be serious. He said, “We are seeing cost increases starting to come through at a pretty rapid rate. We are in a position to use scale to hold prices lower longer, even in an inflationary environment. We will have the lowest prices in the market.” Some prices were increased as the company paid for costly store renovations. The major chain is famous for low prices. When their price structure rises, then all retailers will have raised theirs too. The modest price inflation figures promoted by the USGovt propagandists and Wall Street shills will turn upward, even after their usual gimmicks to soften through adjustments. The Wal-Mart business incorporates the cost effects from numerous factors, as suppliers must deal with higher input material costs. Foreign vendors export their finished products, largely from 160 Chinese manufacturing plants owned entirely by Wal-Mart. The higher shipping costs are built in also, passed along.

 

USA zvedají limit pojištění vkladů na nekonečno. Co je za tím? – Why FDIC Set No Limit For Insured Accouts?

THE F.D.I.C. BANK DEPOSIT INSURER HAS RAISED THE LIMIT ON INSURED ACCOUNTS TO AN UNLIMITED AMOUNT. THE RULE CHANGE LAST DECEMBER MIGHT SIGNAL A LARGE BANK GOING BUST SOON. THE RELAXED RULE MEANS THE DEPOSIT INSURANCE BENEFIT WILL BE GIVEN ACROSS THE BOARD WITHOUT THE TIME CONSUMING DECISIONS TO BE MADE. EXPECT BIG BANK RUNS, FOR WHICH THE F.D.I.C. WILL BE READY.

An important notice took place at the end of 2010. The Federal Deposit Insurance Corp might have just signaled an intention to go into high volume production and processing of dead banks. The new rule, no limit on the size of deposit insured, means no decisions must be made in  hat could become a heavy volume task. And with each dead bank whose assets must be processed, the job will be much simpler. From 31 December 2010 through 31 December 2012, all non-interest bearing transaction accounts are to be fully insured, regardless of the balance of the account and the ownership capacity of the funds. This coverage is available to all  depositors, including consumers, businesses, and government entities. The unlimited coverage is totally removed from the insurance coverage provided for a other accounts held at an FDIC-insured bank.

Technically, a non-interest bearing transaction account is a deposit account where a) interest is neither accrued nor paid, or b) depositors are permitted to make an unlimited number of transfers and  withdrawals, or c) the bank does not reserve the right to require advance notice of an intended withdrawal. Neither Money Market Deposit Accounts (MMDAs) nor Negotiable Order of Withdrawal (NOW) accounts are eligible for this temporary unlimited insurance coverage, regardless of the interest rate, even if no interest is paid. The FDIC will be sugar daddy to all non-interest bearing accounts regardless of the size of the balance. It seems the problem is the lack of organization and staff at the FDIC needed to take over a bank with over $10 billion in deposits. They typically must complete the liquidation work over a weekend, in a minimal disruption directive. When the bank is very large, they do not have enough time for the due diligence, before making decisions on the depositors one at a time. One might infer that the FDIC thinks it will need to take over larger banks, and this policy change facilitates the process. Another line of thought points to extremely large depositor accounts by the power elite, who have demanded full insurance. The challenge comes from the reverse gear to the fractional banking. The banks owe $1 million to depositors for every $100k held in reserve assets. The new FDIC rule could be in anticipation of bank runs, in addition to big bank collapses. Expect some powerful magnificent bank events, maybe bank runs soon.

 

Konce petrodolarového standardu se blíží – The Days of the Petro-Dollar Are Coming To an End

THE SAUDIS ARE MAKING INTERNAL PREPARATIONS FOR LIFE BEYOND THE AMERICAN SECURITY BLANKET. THE FLIP SIDE IMPLICATION IS THAT THE PETRO-DOLLAR DEFACTO STANDARD IS ABOUT TO LOSE ITS GLUE. A WEDGE IS GRADUALLY BEING DRIVEN BETWEEN THE UNITED STATES AND SAUDI ARABIA. THE USDOLLAR CANNOT SURVIVE WITHOUT GLOBAL CRUDE OIL SALES AS A COMMODITY STAPLE BEING SOLD IN EXCLUSIVE USDOLLAR TERMS. IT IS THAT SIMPLE. REMOVE IT, AND THE USDOLLAR HOUSE FALLS.

Before a crowd in the United Arab Emirates, Saudi Prince Turki al-Faisal stressed that the Gulf states must look after their own security after recent events in the Middle East and North Africa. A new major rift has opened with the Saudis. The breach has had clear markings from the USGovt support, both direct and tacit, for major populist Arab upheavals from Egypt to Libya to Yemen. The Saudi monarchy has a long track record in strong opposition to democratic reforms. It is a basic dictatorship in white robes that gives it citizens zero rights while the royals take 95% of the natural wealth.

One must consider the potential for highly disruptive and motivated hidden agendas on the part of the United States. The US might have an agenda for a higher oil price, which would bring higher Saudi and OPEC revenues from from which to purchase USTreasury  Bonds during a time of massive unmanageable USGovt deficits. Also, the US might have an agenda for helping along unified Moslem democracies in order to form a bigger rival in new cold war. The stronger rival would assure consistent and growing military budgets for the Pentagon, always eager for a very cold war. Whatever the motive, whatever the conflict, the great risk is for the unraveling of the USGovt protective blanket given to the Saudi royal family. If it is removed, then the flip side is for the removal of the understood US$ pricing of OPEC crude oil. If crude oil and other commodities are no longer sold in US$ terms, then the USEconomy will be forced to adapt to a 30% to 50% lower USDollar valuation, and corresponding higher commodity prices. That consequence is not obvious to most economists, since they take the PetroDollar standard for granted. The Jackass does not, ever since the Russians and Chinese announced with Saudis and Japanese joined at the hip, that by year 2016 the crude oil would no longer be sold in USDollars. They made the announcement in May 2009.

The days of the Petro-Dollar are coming to an end. The USDollar devaluation in the FOREX market would be immediate. The implication to the USEconomy is hyper price inflation. The next destination is the Third World. Imagine the USDollar bidding for another currency in which to buy commodities, then finished products from China. Then imagine a USDollar worth 30% 50% less. Then consider the impact on the USEconomy that would assure an inflationary recession turned depression fast, like in a New York minute!!

 

Přežije dolar? – Will USD Survive?

THE USDOLLAR CANNOT SURVIVE THE CRISIS. BUYING TIME SOLVES NOTHING, AS IT ONLY EXACERBATES THE PRICE INFLATION SCOURGE. PRESERVING THE BIG USBANKS REQUIRES HUGE CONTINUOUS PAYMENTS  FROM THE NEW MONEY SPIGOT. THE WORLD IS PREPARING FOR THE DAY WHEN THE USDOLLAR DOES NOT DICTATE THEIR FATE. SINCE CHINA

PROVIDES MOST FINISHED PRODUCTS, A YUAN CURRENCY HELD IN RESERVE MAKES SENSE. THE BIRTH OF CHINESE YUAN IN BANKING RESERVE SYSTEMS IS SOON TO EMERGE.

Ending QE2 ending would cause a certain rise (maybe a spike) in interest rates, trigger a renewed banking crisis, and inevitably unleash a debt crisis that would lead to a global run on the USDollar. Unfortunately, the extension of more QE, like a QE3, will serve only to delay the inevitable and make conditions much worse in the end. Each new QE round guarantees a higher cost structure for the USEconomy and most of the world. My forecast is for global QE as the USFed conceals the QE within routine policy, going so far as to lie and claim it has ended and fulfilled its purpose. A formal new QE3 launch announcement, still a highly likely event, will probably be blamed on the Japanese natural disasters, as well as on Chinafor its withdrawal of USTBond purchases.

A NEW I.M.F. CURRENCY BASKET REPRESENTS THE FINAL DESPERATE ATTEMPT TO HOLD ONTO THE FIAT CURRENCY SYSTEM. IT IS PRICE FIXING, NOTHING MORE. THE MAJOR FIAT CURRENCYS WILL BE TIED TOGETHER, THUS ELIMINATING THEIR RELATIVE EXCHANGE RATES. THE END RESULT WILL BE EQUITABLE HYPER-INFLATION AS THE ENTIRE COST STRUCTURE WILL RISE UNIFORMLY VERSUS ALL THE DOMINANT GLOBAL CURRENCYS. ITS ONLY SUCCESS WILL BE A HALT TO THE USDOLLAR DECLINE VERSUS ITS COMPETITOR CURRENCYS. WITNESS THE ACTIVE AVOIDANCE OF A GOLD STANDARD.

EXPECT A NEW GLOBAL CURRENCY CHARADE. THE INTL MONETARY FUND PLAN IS JUST A REPACKAGED VERSION OF FIAT CURRENCIES. IT INVOLVED AN ATTEMPT TO FIX EXCHANGE RATES, AND THUS TO PREVENT A USDOLLAR COLLAPSE. INSTEAD THEY WILL EARN A COLLAPSE OF ALL MAJOR CURRENCIES IN UNISON, AS GOLD & SILVER RISE LIKE A PHOENIX.

USDOLLAR DECLINE WILL CONTINUE AND EVEN ACCELERATE. FACTORS RELATE TO THE  MIDDLE EAST AND NORTH AFRICAN NATIONS, WHO FIND FAVOR IN THE EURO CURRENCY AS A TEMPORARY PORT FOR STUFFING RESERVES. THE EFFECT ON THE USDOLLAR IS BREAKDOWN BELOW SUPPORT FROM THE LAST TWO AND THREE YEARS. THE B.R.I.C. NATIONS HAVE THEIR OWN MOTIVE TO MOVE AWAY FROM THE USDOLLAR ON GLOBAL TRANSACTIONS. LED BY ASIA, CREDIT FACILITIES IN RESERVE ACCOUNTS WILL BE YUAN-BASED. THE DEVELOPING ECONOMIES ARE SHOCKED AT THE USDOLLAR DEBASEMENT.

Faros Trading provided a solid brief cogent piece of analysis on the USDollar’s extréme vulnerability. Its decline will continue, even accelerate. Some important points are Word noting in the details offered. They said, “For the past nine months Asian reserve managers have controlled the direction and to an extent the pace of USD weakness, whether valut in terms of the USD/Index or the EUR/USD. Three months ago they were joined by Latin American central banks, as they sold the USDollars that they were buying each day to keep their own  currencies relatively weak on an export competitiveness basis. The Latin American and Asian central banks have been happy to work bids in the market, passively adding liquidity rather than taking it. They have done this by working bids below the market, relying on the market to come to them as peripheral fears, and interest rate differential changes result in bouts of USD strength. This passive strategy of USD selling has worked for some time, and the players have been content with the pace of the move and the liquidity they have been absorbing. The game has changed.

The Middle East has changed the game because they are forcing Asian reserve managers to question their passive strategy. If Asian central banks are passive, they miss buying the EUR/USD at 1.4040, because the Middle East is front-running their orders. This has caused a number of Asian reserve managers to raise their bids in the EUR/USD as the market rises. In effect, through frustration, Asian reserve managers are moving from set bids to rolling bids,.i.e. set a bid 50 pips below today’s high. This strategy could see faster moves to the topside in the EUR/USD in the months ahead. It could certainly steepen the slope.

We find it especially interesting that Brazil allowed the BRL [Brazilian Real currency] to strengthen to 1.6280 today, just as Brazilian and Chinese relations have recently warmed, specifically regarding the issue of the Yuan, but also given that President Rousseff’s first state visit will be to China on April 11th. We believe the only reason Brazil is allowing the BRL to strengthen is because they expect China will do the same going into the G-20 meeting on April 14th. Further CNY [Chinese Yuan currency] strength equates to further USD weakness. We continue to call for 1.5000 in the EUR/USD over the next 3 months. The game has changed.”

 

Jak jsou na tom evropské banky? – Situation of EU Banks

SPANISH AND IRISH BANKS ARE THE MOST VULNERABLE TO THE EURO CENTRAL BANK 25 BASIS POINT RATE HIKE. SPANISH HOME LOANS HAVE A HEAVY TILT TO ADJUSTABLE RATES. JOBLESS BENEFITS ARE COMING TO AN END. A CRISIS IN SPAIN IS OVERDUE. IT WILL HIT LIKE A HURRICANE IN EUROPE AS BANKS TOPPLE.

Spanish and Irish banks dependent upon the Euro Central Bank for liquidity could see thein profits squeezed as rising interests rates hike borrowing costs. To the point, Spain and Ireland have high proportion of floating rate mortgages.

GERMAN FINANCE MINISTER HAS URGED NO BAILOUTS OF THE BIG GERMAN BANKS. THE BATTLE IS ON TO CUT OFF THE BANKER WELFARE TO THE SOUTH, AND TO CUT IT OFF DOMESTICALLY. SOME SMALLER TEST CASES ARE ON THE DOCKET IMMINENTLY. DAMAGE WILL BE FELT ON BOTH ENDS, DEBTOR AND CREDITOR. A BIG NAME GERMAN BANK IS GOING TO FALL, AND SOON.

German Finance Minister Wolfgang Schaeuble has recommended that no German banks on the verge of collapse should expect bailout money from the German Govt. According to Reuters, two mainstream German lenders, Helaba and NordLB, could fail during the next round of more stringent European bank Stress Test. Some real stress could be actually put to the exercise, unlike the charade last time both in the US and Europe. The results are due in June. Schaeuble is resolute in his position. He said, “If the results of the tests show a need for fresh capital, the bank owners are there to cover these needs. It is not the case that one can appeal to the state. The funds of Soffin (German’s bank rescue fund) are not available for any new requests. It is no longer like in 2008 that there are no alternatives. We have an insolvency law.” Schaeuble wants to require German savings banks and regional states with major stakes of ownership in the two lenders to prop up the banks, and therefore not turn to the German Govt fund for rescue. One can infer from a domestic bank aid policy so tight, that further German participation in more bailouts of the PIIGS sovereign debt is not to be tolerated. Both Helaba and NordLB are small banks. The real test is for larger and more influential banks need money, like DBank. The stage is set for some banks in Germany to falter, fail, and fall.

 

Přežije euro? – Will Euro Survive?

MERKEL HAS BEEN HUMILIATED BY MASSIVE DEFEATS IN A FEW GERMAN PROVINCES. IMPLICATIONS ARE HUGE. THE GERMAN PEOPLE ARE SICK & TIRED OF SUPPORTING THE BROKEN SOUTH WITH THEIR AMPLE SAVINGS. THE EASTERN ALLIANCE IS QUIETLY ASSUMING A VANTAGE POINT IN GEOPOLITICAL POSITION,  ALTHOUGH HIDDEN TO DATE. BIG CHANGES ARE COMING TO EUROPE, THE FUSE LIT.

The seasoned experienced brilliant European contact with vast contacts on four continents pitched in with a valuable perspective. He is German and knows his nation well. Being  trilingual (Russian language too), he is well versed with numerous global contacts. He responded to the humiliating Merkel defeats, which he predicted months ago. He wrote,  „Germany is fleeced to the tune of 400 billion Euros per annum by the Club Med and other losers in  Europe. The entitlement jockeys of Southern Europe are in for rude awakening. The Berlin, Moscow,  and Beijing leaders are going to set the tone for regaining stability. The Anglo-American Axis has  driven the entire financial and political system over the cliff. They will next attempt to stiff the rest of  he world with their incredibly vacant proposals like the carbon tax and IMF currency, in order to  retain their power and privilege. It is soon game over for the Boyz. Angela Merkel is the East German lackey, not stupid, a top notch scientist. People need to learn to produce again, even to produce a little bit more than they consume. It is called wealth creation. If someone has nightmares it should be  Sarkozy, Cameron, and Obama, the three stooges. The upcoming blowback from the mounting  ongoing financial crisis will be horrific. Things will never work out the way the US and British  bankers plan in the coming months and years.” The key is change, shift of power & control to the East, and unexpected turns in the ongoing crisis. It is called Paradigm Shift, a topic  mentioned frequently in the Hat Trick Letter.

My response is finally to bring it on, bring justice, bring equitable power, to weaken the   syndicate in power. My dream, unsure of its inevitable outcome, is to push the Anglo bankster off their perch. In the last year, the US & UK bankers are much more on the defensive,  but hardly anywhere near losing their posts and privileges. Several potential important events  could signal a significant change in their hold on power. It could be a significant move in Gold toward $1600, or silver past $60. It could be the Saudis openly discussing an end to the standard for crude oil sales in US$ terms. A blockbuster event in the COMEX could reveal  they have no silver, and their gold supply is a queer Just-In-Time inventory from BIS swap  midnight express shipments. One big US bank like Bank of America could go under, despite steady narcotics fund input. A G-20 Meeting could take place with open calls for a new non-IMF, non-US$ global reserve, and shock the Western bankers who are attempting to steer the direction toward an IMF basket of major currencies. It could be some nasty exposure of USMilitary involvement in popular uprisings, even the military assistance to natural disasters from the infamous HAARP weapon usage. In my opinion, the next highly disruptive events will come from Europe, like a huge bailout regest by Spain that is refused. The Euro Central Bank rate hike will have ripple effects, continued hikes to follow, and a deep impact on Southern European banks. The stage for change has been set, the fuse lit.

THE EURO CENTRAL BANK HIKED RATES TO 1.25% UPON GERMAN DIRECTION. THE SOUTHERN EUROPE BANKS WILL BE PRESSURED IN A VISE. GERMANY WANTS THE CRISIS TO BUILD, IN ORDER TO SPARK A SIGNIFICANT ENOUGH CRISIS TO SEPARATE FROM THE UNION AND ITS DEADLY OBLIGATIONS FOR CLUB MED WELFARE. CERTAIN BANKERS IN CONTROL WANT TO FORCE THE SITUATION IN EUROPE. EUROZONE PRICE INFLATION HAS INCREASED. IN REALITY THEIR C.P.I. IS AT LEAST TWICE THE OFFICIAL NUMBER. MY BELIEF IS THAT THE PRICE INFLATION CARD IS BEING USED BY THE EUROCB AND GERMAN BANKERS TO SEPARATE FROM THE RECKLESS USFED.

Simply stated, Germany is sick & tired of forfeiting $300 to $400 billion annually to support the Southern European nations, complete with broken banking systems, lethargic  conomies, and a culture that is not consistent with that of the Germany powerhouse. They wish to halt the waste of money, like having a truant deviant lazy son. The monetary decision of a rate hike begins the process to cut off the PIGS nations by forcing bank stress. In mid-2008 the Jackass had an important disagreement with a well placed German banker who thought the Euro Central Bank would never lower interest rates to absurdly low levels like the Americans. My view was that the EuroCB would indeed follow the USFed, but in delayed fashion, after the Euro currency started to rise and threaten their export trade. It did precisely on cue, and the ECB hiked in quick time. They do not want to continue the insanity of ultra-low interest rates, since it is so destructive. Savers earn less. Commodities cost more. The Euro currency has responded to tighter monetary conditions by moving from 130 at the start of year 2011 to 145 this week. Central bank president Jean-Claude Trichetattached the rate decision to the risk of accelerating inflation, and added that rates were still very low. The Europeans want any credible reason to separate from the reckless American monetary stance stuck in the 0% corner. Notice the reference to Germans who wanted the hike long ago, not even in the first place. Trichet said  unapologetically, “The hike is unwelcome for peripheral countries, but arguably the core member states were in need of this move already some time ago. In that sense, the timing of the increase is a balancing act, which is part and parcel of the one-size-fits-all monetary policy. We did not decide today that it was the first in a series of interest rate increases.” He understands the impal to the Southern European nations, especially their banks, which are expected to be stressed by the decision. Basically, Germany has had enough, and wishes to force the situation, to topple Southern banks, and to proceed with the delayed climax. They want a restructure, and one will come.

The consensus interpretation is that the EuroCB is more concerned about inflation than slow growth. Trichet is well aware that 1.5% is still 5% to 7% too low for interest rates, and very aware that the type of price inflation encountered is deadly, on the cost side. Expect the Euro currency to continue rising. The true price inflation is obviously closer to 10% than 5%, surely not below 5% to any rational observer. Almost never does a single rate hike occur. The key point also that the Europeans are making distance from the Americans, often called insane on monetary management. The Europeans must follow the American lead often. The nasty rub, the Euro will rise until it causes pain in quick feedback felt by German exporters. Notice in the mainstream press that nobody mentions the Germans wishing to force the situation into a crisis, to enable change finally. They want debt restructure and to topple dead banks. The ripple effects will surely stress the dead US & UK banks.

A RATE HIKE COULD DOOM THE EURO CURRENCY, EVENTUALLY NOT IMMEDIATELY. THE NEXT PHASE COULD BE A FINAL BURST BEFORE A FULL SPUTTER. THE COMMODITY (FOOD & ENERGY) PRICE DISCOUNTS FROM A HIGHER EURO EXCHANGE RATE WOULD OFFER SUPPORT, BUT THE HIGHER EURO WILL CAUSE A SERIOUS EXPORT CRAMP. A VERY STRANGE MIX COMES TO THE EUROZONE ECONOMY.

The smart money knows that a rate hike could render great economic damage to the EuroZone. They know that just like two years ago, the feedback loop to the export trade is felt suddenly. The damage will be different in the extreme locations. A sequence of rate hikes, even if only 25 basis points each, will hit the Southern European banks that must administer tighter screws to adjustable rate mortgages. The Spanish Zombie banks are ripe for a topple and crash, and the EuroCB rate hike puts pressure on their banks directly. Regard the rate hike as a preliminary warning that the insolvency game has gone on long enough, and the lights will be turned off in the near future, not tomorrow, but soon. My focus is on the Spanish banks and the Portuguese sovereign bonds. The former are badly insolvent, banks floated along with fully permitted vast holes on their balance sheets, an exhibition of pride. The latter are wrecked and costly to continue the float, unsustainable from the 9% extreme borrowing cost, which has always preceded a breakdown. The ratcheting upward of EuroCB interest rates in my view has a hidden agenda, to break the logjam, to force the issue, to remove the impediments in the Southern Europe bank and bond systems.

The higher Euro currency is the bizarre byproduct of the ECB rate hike. The bond arbitrageurs are leveraging off the rate differential with the USTreasury Bills in order to gain some hefty futures profits. But such open windows will last only a short while. The higher Euro will cause new problems, in particular a damper on German exports, which will cost more to foreign importers. However, another angle must be considered. Germany might be attempting to cause a mini-bull rally in PIGS sovereign debt so that the big German institutions can dump massive amounts of government bonds finally. The higher Euro exchange rate offsets the lower principal bond value linked to higher bond yields. Also, one must always bear in mind that the Chinese have not likely halted their discounted purchase of PIGS bonds, as they dump USTBonds en masse. So the German motive could be to  direct EuroBonds dumps with the bad markings, but the Chinese motive is indirectly to dump USTBonds in favor of those marked EuroBonds. The Chinese will demand conversion later to Gold bullion from the associated stressed broken central banks. A very complicated chess game is underway. The Chinese might be demanding a higher Euro exchange rate to be sustained during a massive USTBond dumping exercise. The German motives are the key. They want to discharge the PIGS nations pronto. They want to unplug the PIGS nation banks. They want to bring about a climax moth event for the Euro currency light fixture.

GREEK GOVT DEBT REMAINS IN CRISIS, CHRONICALLY SO DESPITE THE CHARADE OF AID LAST YEAR. NOTHING WAS FIXED, JUST PATCHWORK THAT PROVIDED BIG BANK WELFARE BAILOUTS. THE GREEK DEBT WAREHOUSE WILL BE REVISITED AS THE CRISIS RETURNS.

Europe has fixed nothing. The Euro Central Bank are accomplice the IMF has succeeded in aiding to a great extent the big European banks with considerable Greek debt exposure. But they fixed nothing. The IMF poison pill makes conditions much worse in the intermediate term, from which the nation taking the pill (austerity measures) cannot emerge. They sink into oblivion, the vast sea of unrecoverable debt. The Greek Govt debt situation has been ringing the alarm bell again. Even Gold & Silver respond in part to the morass. Clearly, the PIGS nations are in dire straits with no actual aid coming, only backhanded duplicitou banker welfare packages. Greece, Portugal, and probably Spain will soon have to leave the Euro currency community as stress reaches the limit. That is the German objective in my view. The EuroCB rate hike was in my view intended to speed up the process. Recall that Greece was supposedly resolved via bailout last May, and yet its 10-year bond has gone stubbornly higher, reaching 13.83% last Friday. Look for a renewed Euro sovereign debt panic. The safe haven is no longer the USDollar or USTBonds, neither benefiting at all from the chronic Euro debt distress. The new safe havens are Gold & Silver, and to some extent crude oil. As the sovereign debt continues to rupture in full view, the USTreasurys are more frequently regarded as a more elite but still broken equivalent to Greek Govt Bonds. One is left to ponder whether someday the USTreasury 10-year yield will shoot toward the justified 10% level. As long as the USFed has a firm grip of the Printing Pre$$, that is not likely. However, expect the USDollar to plumb new deep depths since it cannot be supported by the same monetary press.

A reliable connected German banker: The European nations are all being pushed to the Finish  ine. They all are aware that the system is defacto coming apart in a grand breakdown. The only ones refusing to accept this are the Anglos & Americans. This is a giant Goat Rodeo. The bulls are already dead and processed in the food chain. We shall eventually see a revival of a real market economy with certainty. However, before that happens, there needs to be a cleansing process, a very cruel one. All the measures we see being taken are like Intensive Care Unit measures on a terminal patient. There are a thousand ways to expire. We need to look at the very big picture to really comprehend. The universe strives for equilibrium. This means with all the negativity there is equally strong positivity. It seeks to arrive.” A couple days later, the banker continued with more comments. The situation in Portugal was fully orchestrated, more trigger events desired to further the process. He wrote, “They are fighting for survival and it is all sinking. The revised and realigned Euro currency will happen by default. The Portugal trigger was pulled in order to stage the other events so it appears to be a logical step. DeutscheBank and the other banks will not be saved. They already received that clear message from Berlin. There are not enough resources for the DBank bottomless pit to be filled. Creditors will not get a haircut, but rather their heads will be cut off.” Bear in mind that DeutscheBank is the connection to US & UK bankers. A savvy colleague provided his own  Interpretations that add a geopolitical flavor to the events. He and the Jackass are in contact with the German banker source infrequently. He said “The EuroCB moves to strengthen the Euro currency are part of a plan to force the PIIGS and periphery countries out of the Euro in preparation for the introduction of the new partially gold-backed Nordic Euro. As the PIIGS and periphery nations sink, the losos to the German, Austrian, French, Swiss banks will escalate. DeutschBank and many other big EU banks will not be bailed out. The hidden losses are so enormous that both the shareholders as well as the senior creditors will be wiped out. The German government will save the depositors, as DBank will likely be nationalized.” The Nordic Euro currency is scheduled for introduction in June. My belief, just mine as Jackass, not from the source, is that its time schedule could easily slide out beyond the targeted June date based on the facts and circumstances at that time. Implementation of a major currency, especially one with a gold component, is extremely difficult, complicated, and must be achieved in the face of huge banker driven political forces with potential military and terrorist threats. History is replete with precedents for the naive doubters.

 

Zlato a stříbro – Gold and Silver

BUBBLE IN THE GOLD MARKET IS ACCUSED BY THE IGNORANT. gold_bubble GOLD IS REAL MONEY. MONEY IS FLEEING PHONY MONETARY STRUCTURES. COMPARE TWO PAST VIVIDLY CLEAR ASSET  BUBBLES, AGAINST WHICH THE CURRENT GOLD MARKET BEARS NO RESEMBLANCE. MAYBE WHEN GOLD REACHES $3000 OR $5000, THE ARGUMENTS WILL RING VACANT AND HOLLOW.

AS LONG AS QUANTITATIVE EASING PROGRAMS ARE IN PLACE AND ACTIVELY PURSUED, GOLD & SILVER PRICES WILL SOAR. THE PROGRAMS ARE URGED BY EXPLODING BUDGET DEFICITS AND ABSENT BOND DEMAND. THAT TRANSLATES TO A RUINED USDOLLAR CURRENCY. GOLD & SILVER RESPOND TO THE DEBASEMENT AND RUIN. EFFORTS WILL BECOME RIDICULOUSLY STRETCHED TO SAVE THE USDOLLAR, BUT WILL FAIL. QE WILL GO GLOBAL AND SECRETIVE, ASSURING TREMENDOUS ADDITIONAL GAINS IN THE GOLD & SILVER PRICE. NO EFFORT TO LIQUIDATE THE BIG USBANKS WILL OCCUR, THUS ASSURING THE PROCESS WILL CONTINUE UNTIL SYSTEMIC FAILURE.

 

Gold & Silver will soar as long as central banks continue to expand their liquidity programs QE1 and QE2, and enlist the cooperation of other major central banks in providing artificial but coordinated USTreasury Bond demand. In the process their efforts will push the cost structure up further. In my view, since the Japan natural disaster hit with financial fallout, the Global QE is very much in effect, but not recognized as a global phenomenon

THE FINAL PUSHDOWN ON GOLD PRICE IS THREATENED, BUT IT HAS NO TEETH. IT CANNOT AND WILL N OT HAPPEN. THE GOLD CARTEL HAS BECOME IMPOTENT. THE USDOLLAR IS BROKEN, AND THE WORLD RECOGNIZES THAT FACT, EVEN IF THE AMERICAN PUBLIC DOES NOT. THE SWISS DELAYS IN GOLD BULLION DELIVERY FROM ALLOCATED ACCOUNTS HAVE REACHED THE LAWSUIT STAGE. BEWARE OF ALLOCATED ACCOUNTS HELD IN SWITZERLAND, WHICH MIGHT SOON VANISH.

An experienced gold trader who has been spot on with numerous developments in the last three years pitched in. He does not believe the Western Elite have the power, resources, tools, partners, or capability to impose their final solution. He wrote, “In all modesty, the  Boyz would have to get past our desk and I cannot see that happen without those people getting thrown into the meat grinder. That does not mean that they will not try. They will get nowhere and they know it. They are facing multi-$billion law suits right now in Switzerland, where clients want to take delivery and are being given the run-around. They use all kind of legal and compliance tactics to stall, knowing well that in the end they will die a sudden death.” This reference to the Swiss bullion bankers is a continuation of the story reported by the Hat Trick Letter last summer 2010. The Swiss have sold much of the gold bullion in Allocated segregated accounts illegally. Their delay tactics are intended to enable them time to secure Gold bullion quickly from whatever source. The Swiss are planning a nasty Force Majeure seizure of Allocated gold accounts, to replace them with depository receipts, to drag the process out, and to refuse entrance of clients into Switzerland. The Swiss banking system is almost ready to implode. A multi-$billion heist is planned.

The bet has possible shadowy overtones. Clearly somebody or some firm might actually believe the Silver market is grossly overbought, ignorant of the dynamics of inelastic demand, of COMEX shortages, of coin shortages, of growing industrial demand, of growing investment demand. Fine, let them be roadkill. But a major loss is going to be swallowed on that egg laid on the option board. Obviously, the gold cartel might have decided to invest a mere $1 million to try to wreck sentiment and send the weak hands scurrying. They misjudged the buyers and their strong hands, which includes the Chinese billionaires acting with sharpened motive. Let’s take the situation to two different extremes. Maybe the trader planned on holding the option put contracts for a longer stretch of time. Suppose some internal development is afoot that will expose the SLV fund as a gigantic fraud, whose silver bullion in inventory has been leased and even sold, leaving paper certificates in the vault. That is precisely what the Jackass and other smarter more savvy observers believe. If so, then as mentioned here before, the SLV share price would fall below the the spot silver price. A penalty to the corrupted fund would be imposed. Option contracts would still be linked to the underlying SLV share price. Suppose some global initiative development instead is afoot that will make Gold & Silver in an exalted position within a new global monetary system to be announced in early summer. The gold cartel might wish to hit the Gold & Silver price really hard beforehand, driving both down significantly. My belief is that neither extreme scenarios will unfold and blossom by July. The first scenario of exposure that SLV fund is an ugly fraud perpetrated on the investment public, that is a certainly in my view, but it will take more time. Just some speculative thinking on these two extreme scenarios.

 

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – březen 2011

Pátek, Březen 25th, 2011

Dopad situace v Japonsku – Impact of Japan’s Tsunami

THE IMPACT OF JAPAN IS COMPREHENSIVE AND PROFOUND ACROSS ALL ASPECTS OF FINANCIAL MARKETS. THE NATION HAS HIT SEVERAL IMPORTANT TRIGGERS SIMULTANEOUSLY. ECONOMIC FALLOUT IS GREATEST INSIDE JAPAN ITSELF. THE IMPACT IS GREATEST WITH THE UNITED STATES AND JAPAN. THE USGOVT MANAGES A MONETARY NUCLEAR REACTOR THAT IS ALSO IN CORE MELTDOWN.

FUNDS FOR FINANCIAL MARKET SUPPORT: Tremendous emergency funds have been appropriated and set aside by the Japanese Govt for financial market rescue & support. The price will be even larger than reconstruction & relief efforts. The debt added is intended to stave off a total national meltdown. The initial pledge of funds was for $86 billion to stabilize their financial market, to make regional bank liquidity available, and to fund relief efforts. They reacted to factory shutdowns, a curtailment of distribution channels, and rolling electrical blackouts. The next pledge of funds was for $183 billion  to further stabilize markets and banks. The support continued until the latest amount is reported to be 55.6 trillion Yen, equal to almost US$700 billion Japan has rapidly crossed the bridge from deflation to inflation.

FUNDS FOR TANGIBLE PURPOSES: Tremendous emergency funds have been appropriated and set aside by the Japanese Govt for relief efforts, worker crews, earthquake & tsunami cleanup, body retrieval & searches, and reconstruction. The price tag will be huge, and seems to grow leaps and bounds on a daily basis. The deficit will be large, adding to an already enormous cumulative national debt. Japan must rebuild infrastructure as well as supply delivery systems for basics like food and factory material input, even cash at bank machines.

SALE OF FOREIGN ASSETS: Given the overloaded saturated debt situation in Japan, many assets must be sold in order to raise cash, mostly foreign. Without actual assets used, the size of the crisis and its funding aftermath would produce significant and immediate price inflation. Therefore, they will sell a large hoard of USTreasury Bonds, USAgency Bonds, and possibly US Corporate Bonds. The Japanese insurance companies must also raise cash to pay for claims from the widespread damage, including to businesses. They will sell US$-based bonds also. An unintended consequence is for a pinprick of the USTBond asset bubble, which has been puffed for over two years. Some funds will be made available with USTBond dumps for sure, but in an emergency setting, immediate money creation will be ordered.

REPATRIATION EFFECT: Concurrently, the March 31st deadline approaches for the annual Japan Repatriation of cash held in foreign accounts. The requirement will add to the inflow of money into Japan from overseas. This annual return migration involves funds held in all foreign lands, and will force the sale of EuroBonds, UKGilts, and loose cash in the Persian Gulf. The effect will cause the Yen currency to strengthen relative to all fiat currencies, rendering harm to Japan’s export industries. The world annually goes through this required effect, but this year should be more pronounced.

COMMODITY DEMAND EFFECT: The rush to undertake reconstruction will require a wide array of commodities at a time when the commodity market is afire in price increases. From steel to cement to lumber to fuel products to fuel, the major commodities will be in enormous demand, all on a marginal increase basis. The effect on commodity prices will be sizeable and noticeably attributed to Japan. It will be felt primarily after the landscape settles enough for work crews to begin the massive efforts. Already, critical supply shortages have been reported.

FOOD PRICE EFFECT: The shortage of foodstuffs comes from both disrupted original growing locations and disrupted supply chain in delivery systems. Again, a wide variety of foodstuffs will be in enormous demand, all on a marginal increase basis. The effect on commodity prices will be sizeable and noticeably attributed to Japan.

PRICE INFLATION EFFECT: Japan stands at risk of a hyper-inflation episode with more punch than what has begun to unfold in the USEconomy. The emergency funding for both reconstruction and financial market support will unleash price inflation from the inevitable spillover, a financial tsunami of funds. Also, the rising demand and supply shortage with intensify the price inflation. Since the Japanese Debt/GDP ratio is near 200%, they cannot hike interest rates without causing a default on their bonds. The Bank of Japan will monetize the required funds to rebuild their country and later worry about consequences of hyper-inflation. If foreign asset sales are not ordered, and fresh debt monetization occurs, the price inflation will be power packed and doubly significant. When a nation reaches saturation on debt, the new debt is monetized and hits the main street as inflation rapidly. However, it is hard for hyper-inflation to strike a nation with a rising currency. Incredibly strange crosswinds are at work.

EXPORT TRADE EFFECT: The redemption of US$-based bonds will be staggering and sudden, compounded by the sale of other US$ assets. The effect will be a steady relentless significant rise in the Japanese Yen, a decline in the US$/Yen exchange rate, with a powerful effect on the Japanese export industries. A big trade deficit is coming to Japan, a new concept. The system will work to bring the Yen currency down on the tangible side while the financial side actually pushes the Yen up. A big conflict and paradox comes. The lost surplus is a direct result of the rise of Chinese industry, something Japanese firms have invested in, with important technology transfer. The newly arriving trade deficit could easily become a permanent fixture, and its funding will aggravate the high government debt burden.

YEN CARRY TRADE CLIMAX EFFECT: The reversal unwind of the Yen Carry Trade appears to be entering its third and possibly final phase. The unwind has required over ten years to complete. The YCTrade took 15 to 20 years to build into the largest, most powerful, and significant financial engine of phony wealth the world has ever witnessed. The YCTrade unwind is to be assured by the heavy Japanese selling of USTreasurys. Call it a major unintended consequence. The unwind spells major problems for the Japanese export industries, but also for the USTreasury Bond complex. The entire world will continue to abandon the USTreasurys except for a few nations that wish to openly protect their export trade.

EMERGENCY G-7 YEN SELLING PACT: The emergency meeting of G-7 nations was given a general purpose of dealing with Japan, but it was all about the rapid unwind of the Yen Carry Trade without a single mention of the vast perverse engine. The accord resulted in a global consensus that all nations would help to purchase USTBonds sold by Japan, from the unwind of the YCTrade. The G7 Yen weakening accord is a disguised USDollar rescue, since a rising Yen goes with a falling USDollar. Attempts are made to avoid the USFed being isolated as the sole buyer of USTBonds, which is inevitable. The USFed must monetize all the foreign central bank asset purchases of USTBonds ordered abroad, or face higher US interest rates and threatened USGovt debt default. So they print huge amounts of money through the New York Fed window. A USTreasury auction was postponed so as to enable more efficient printing operations. The sales in Brussels, London, and Tokyo will be covered by the USFed. Thus foreign currency exchange rates are rising versus the USDollar still. The Yen Selling Pact by the G-7 emergency is better described as a Global QE3. Monetary expansion cannot be concealed, since out in the open, and blessed with global consent. A risk of a global central bank franchise model destruction could be in intermediary stage. The monetary system is at risk of greater and sudden fractures.

GOLD & SILVER EFFECT: With all the newly created money from Japan in direct inflation, with all the USTBond sales to undermine the USDollar, with all the commodity demand in reconstruction, the overall effect on demand for Gold & Silver will be positive and powerful but a little delayed. One can smell a monster midyear rally in Gold & Silver after some time to gather facts, assess the situation, and detect the positive winds. The entire Japan story is huge bullish for Gold and extremely bearish for all paper currencies certain to be debased further. The G-7 Yen Selling Pact is all about coordinated currency dilution. With Japan, the United States, and and the EuroZone all printing money, global monetary hyper-inflation cannot be avoided. Gold & Silver will react. Attempts to deal with the breakdown will contribute to global systemic price inflation, which has already been initiated. Gold & Silver will react.

CHAOS & KILLING FIELD EFFECT: None of the above points even touches on the nuclear radiation threat to Japan and its downstream global neighbors. My fear is that the long awaited global population reduction programs might be set off by the evil syndicate that has infiltrated far too many governments, led by the USGovt. The natural disaster of the earthquake in Japan in my view was caused by the corona mass emission from the sun, with a powerful impact that altered the earth’s rotational axis. The resulting damage to the inferior nuclear generator complex might invite other more intentional events from the vile corners occupied by the syndicate, which brought viral weapons like the SARS and Swine Flu, among other devices like HAARP weapons. The darkest elements of humanity, where bankers roam, in tight control of government forces, including the narcotics barons, wish to reduce the global population by 20% at least. They might undertake some nasty projects, even with false flags, and set off a chain of highly destructive events. It could be disguised within a world war. Those who refuse to believe in genocide plans are some of the nicest but dumbest people alive.

AMERICAN FINANCIAL NUCLEAR REACTOR MELTDOWN: Chris Martenson describes the Great American Financial Nuclear Reactor, which is in the process of going through its own core meltdown. He wrote, “For decades, the world has been running its own nuclear style reaction, only in the currency and debt markets, where exponentially accelerating piles of debt and money have spun about faster and faster in a gigantic, complex, coordinated reaction, the core of which is, and always has been, the United States. At the very center of this ungainly money reactor is the main fuel pile itself, the USTreasury market. With any interruption to smooth flow of money through this pile, it will immediately become unstable. The abrupt slowdown of the world’s third largest [Japanese] economy alters the smooth flow of cash around the globe, and even causes reversals of some other longstanding flows. Eventually Japan has to sell some of its vast hoard of US bonds in order to pay for external items needed for its reconstruction. Further, insurance companies, huge holders of US bonds, face stiff liability claims in the wake of the worst natural disaster to hit a heavily industrialized center and will be forced to redeem enormous amounts of Treasury paper. Stressed governments are finding themselves in more of an arguing mood, and agreements are hard to come by. Banks will begin to fail again, global trade to fall off, unrest to continue to build. And then it happens, a currency crisis!”

NOT A REPEAT OF 2008 COMMODITY SELLOFF: Independent analyst Dan Norcini cautioned gold investors not to expect a similar commodity price meltdown like in 2008 after the Wall Street death event. Gold & Silver each sold off sharply during the ensuing months after the collapse of the US banking system, as a liquidity drain was joined by a Wall Street attack of hedge funds. This time is totally opposite. Back in 2008 no Quantitative Easing program was in place, as hyper-inflation engines had not been turned on like now. QE will be global next. The 2008 problems had an unknown element embedded with bank derivatives. Norcini argues that the crisis today is more known, and more centered in Japan, but the Jackass disagrees. The extent of the wrecked export trade of Japan is a big unknown. The extent of the Yen Carry Trade unwind, and its drain from USTreasury Bond sales is a big unknown. The strain on the USFed might actually be more aggravated than they can manage. The extent of the radiation fallout to foreign lands downstream from the trade winds is a big unknown. California must be watched, as well as the NorthWest and Vancouver. Big unknowns remain and lurk with potential lethal impact to both economies and people.

Norcini makes great points about the monetary response being engaged and already at work. He makes great points about the reconstruction demands on commodities of many types. He concluded, “Back in 2008, there was no Fed QE and there was no Japan QE. Once the QE was announced by the Fed near the end of 2008, the hemorrhaging stopped and when the program actually commenced in March the next year, Gold and the rest of the commodity world took off to the upside. The action by the Fed seemed to take the unknown out of the situation in the one sense that many believed that the Fed would not allow the financial system to utterly fail, when many had believed it would. My strong belief is that the panic selling we are seeing in the markets is tied not to the earthquake damage or even the tsunami damage, but at this point to the unknown associated with a nuclear issue. The truth is the Japanese are going to require massive amounts of raw materials to rebuild their battered infrastructure. That is going to put a firm bid under the base metals and other commodity markets a bit further down the road. The implications are more of a short-term bearish thing, long-term bullish for commodities in general, but particularly bullish for Gold because of the implications associated with a QE program by another massive economy.”

Chystají se ve světě měnové reformy? – Are New Currencies Under Preparation?

THE USGOVT IS SECRETLY ATTEMPTING TO FLOAT AN IDEA TO RETIRE THE USDOLLAR, PAY OFF CREDITORS WITH TOILET PAPER, RETIRE THE ENTIRE DEBT, DEVALUE OLD ASSETS, START ANEW, AND ISSUE A NEW USDOLLAR. THIS NEW USDOLLAR CONCEPT SEEMS GROTESQUELY FLAWED SINCE IT LETS THE UNITED STATES OFF THE HOOK AS DEFAULTED DEBTOR, AND IT ASSUMES NO CONSEQUENCE FROM THE USTREASURY BOND LIQUIDATION. THE USGOVT AND USECONOMY WOULD DESTROY THE URGENTLY NEEDED CREDIT TO MAINTAIN ITS ONGOING MASSIVE DEFICITS.

In early February, over 150 US State Dept emissaries were called home to WashingtonDC for secret meetings. The news came and went quickly on internet journals. Many thought meetings were convened to discuss the growing Arab world upheaval. Instead, my sources report that the USGovt wanted to canvass opinions and coordinate feedback, if not to simply float a trial balloon on an historically unprecedented idea. The USGovt is trying to end the USDollar, to retire it, and to replace it in a fresh start after forcing a stern devaluation on all US$-based assets in conversion. The Boyz are printing $100 billion per month. So why not print $5 to $6 trillion and pay off all creditors with fresh colored toilet paper? The plan would call for all foreign creditors to be paid off, and all US-based depositors converted, both parties suffering devaluations. They would all be betrayed under the conceived plan, handed a hefty 30% instant devaluation that would accompany the birth to the new Republic Dollar by name, backed 80% by gold and 20% by silver. My guess is that Gold & Silver would be revalued at $7000 and $250, or $5000 and $175, something like that.

The old US$-based USTreasury Bond debt would be paid off with Printing Pre$$ toxic effluent output. The new US Republic Dollar would be backed by precious metals finally, in a return to the Gold Standard. The entire concept does not receive solid confirmation, but rather numerous repetitions from the same secondary source, and reports on support mechanisms working feverishly to enable its enactment. The story does receive an echo from Bob Chapman. The plan is very unclear about the status of old US$-based stock and bond and property assets, but my belief is they would be devaluated in hidden manner, to minimize public objection and to enable acceptance. It is also unclear the status of old US$-based debt obligations like home loans and car loans and business loans, but my belief is they would be converted in like kind. Recall that the world rejected the Amero concept for a omnibus North American currency before, largely because the United States could not dictate terms of contracts across the world, like between Chile and Europe on copper or between China and Brazil on sugar cane or between Canada and China on industrial metals.

My thinking has many parts, best summarized with a caption heading NO WAY IN HELL but summarized in three reasons.

1)      The USGovt does not own enough Gold & Silver to back a new currency, even at higher precious metal prices.

2)      The USGovt is the debtor nation, and debtors never dictate the terms of liquidation and restructure. The creditors do.

3)      The USGovt has huge deficits, and the USEconomy has huge deficits, each not to be funded since creditor nations would halt all new credit to the US after they are handed forced devaluations on the instant payoff and devaluation.

The USGovt and USBankers cannot possibly dictate the terms of a new USDollar since they are bankrupt, since they are guilty of multi-$trillion bond fraud, and since the USGovt and USEconomy are both deeply insolvent with ongoing massive deficits. The defaulting debtor does not dictate terms to the creditors, even if the debtor is dominated by global banker elite. The wild card in such a deal would be nuclear weapons and an eager CIA to deliver terrorist attacks surreptitiously to any creditor nation seeming uncooperative. Instead, somehow, unsure how, the global elite bankers eat some crow, mixed with toxic bread & butter, and are demoted on the global stage of power, secret pacts with China notwithstanding.

With a new US Republic Dollar, the deficits would cripple the United States immediately. The USGovt deficit would force the United States to find and hand over many tons of Gold & Silver every quarter and year, without fail or exception or forgiveness, since no more scheister paper repayment in settlement.  The US lacks the base monetary metal from which to continue the outsized and worsening deficits. The USEconomic deficit would force the US into insolvency immediately. The result would be that right away, the US would forfeit massive amounts of Gold & Silver that it does not own to settle trade gaps. Perhaps massive hidden Syndicate Gold supply would come to the table, taken as counter-party from Wall Street shorts that destroyed those shell corporate entities. My position has been stated before, that a new hard currency behind the US financial system would result in rapid insolvency and ruin, since the old systemic insolvency would instantly cripple any new launched monetary initiative. Thus the US never proposes one like the new Republic Dollar. Other foreign nations that would use the new Republic Dollar would generate large surpluses, and therefore make possible grand demands for US forfeited Gold & Silver. A new gold-backed US$ currency would force an immediate Black Hole inside the US system. The new system would promote in fast return exactly the same grotesque imbalances in a grand degradation. The United States could not expect to be given renewed credit after betraying the world’s major creditors with the USTreasury Bond devaluations and liquidations, not in this real world.

Lastly, the new Nordic Euro currency would have to be subjugated under the new Republic Dollar. Such a development could only happen under some very scummy power sharing agreement with Russia and China and Germany. Then again, they might make a decision under nuclear threat. Any new Chinese Yuan currency with a hard asset backing would also have to be subordinated under the new Republic Dollar also. Those agreeing to subjugation under continued Anglo banker rule must accept $trillions in losses from USTreasury Bonds, USAgency Mortgage Bonds, even US Corporate Bonds during the devaluation process. The surplus nations, those blessed by huge surpluses, huge reserve savings, robust industry, and absent debts are planning the new Nordic Euro currency, a gold-backed currency. My belief is that as the Nordic Euro comes closer to its anticipated June 2011 launch, enormously important negotiations, hidden battles, important posturing, and desperate ploys will be put forth. The new Republic Dollar seems fanciful and totally impractical, surely such a desperate ploy to be shot down, unless a nuclear threat is delivered.

My best banker source, with solid international experience over 30 years, dismissed the idea as a wet dream by Anglo criminals to gain forgiveness, or rather to dictate forgiveness. This sage generous veteran claims the next phase will unfold very differently, with the foreign group called the Eastern Alliance pulling the rug from under the criminal Americans and British bankers, who operate a syndicate and display an evil streak. They are plainly nazis with nice wrappers. Neocon meant fascist nazi, for those naive in the crowd. The coming arrival of the gold-backed New Nordic Euro is causing a rush to duplicate it. The United States and Great Britain will either maintain a control position within a huge global slavery fascist brutal regime (featuring genocide), or else the US will descend into the Third World with a dead currency which must bid for the good useful currency in order to secure supplies. My belief is that the US$ in current form will be rejected within 18 months, globally, for crude oil and global trade settlement. My belief is that the USEconomy will suffer profound price inflation in the coming two years. My belief is that a new Republic Dollar would fall on its face before launch, but after presentation. A payoff of USTreasury Bonds with soon retired toxic paper with promise of deep devaluation would have immediate consequences of grave proportion, like the US being totally isolated from global commerce. The other name for that place is the Third World, marred by huge price inflation and credit cut off.

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

 

Hat Trick Letter – únor 2011

Neděle, Únor 27th, 2011

Socal Security Deficit

Over a year ago, the incompetent clowns in the USGovt claimed that Social Security would be positive until year 2015. Late in 2010, the first negative month was registered, where payouts exceeded incoming revenue from FICA taxes. Despite the USGovt using the funds, equivalent to tax receipts, the SS payments by individuals is not tax deductible. Massive cutbacks are coming to the broken and pillaged SS system. Added pressure has been put on the USDept Treasury. A nasty portrait of the broken fund can be painted. The Social Security Admin will run at a deficit this year in 2011. It will continue to run in the red until its trust fund is drained by about 2037, according to USCongressional budget experts. That is a bad joke, since the trust fund has been gutted by annual borrowing. The first deficit was recorded last year, but USGovt accountants still here and now project it would post further surpluses for a few more years before permanently falling into deficit in 2016. In the current year alone, Social Security is projected to pay out $45 billion more in retirement, disability, and survivor benefits than it collects in payroll taxes, according to the non-aligned Congressional Budget Office. If the temporary payroll tax cut is factored in, the shortfall this year will be $130 billion.

The Washington Post made a conclusion. They wrote, “Social Security has built up a $2.5 trillion surplus since the retirement program was last overhauled in the 1980s. Benefits will be safe until that money runs out. The $2.5 trillion surplus, however, has been borrowed over the years by the federal government and spent on other programs. In return, the Treasury Department has issued bonds to Social Security, guaranteeing repayment, with interest. Got that? The Treasury does not have $2.5 trillion to pay to the Social Security Trust Fund, and the Treasury is in hock for $14 trillion. Further, there is no end in sight to additional deficits, meaning a climbing debt load for the Treasury. There is no way this entire thing does not explode at some point. Either Bernanke starts to print like Robert

Mugabe or the government is going to have to cut back big time, including on SS benefits. Former Treasury Secretary Robert Rubin was not kidding when he wrote the debt crisis could explode at any minute. It is starting already. That screeching noise you here is the debt balloon stretching to its max. You know what happens next.” The USGovt official deficit will be aggravated by the net SS payouts.

 

Připravují se pravidla umožňující bankrot jednotlivých států USA – Plans To Enable State Bankruptcy Are Under Preparation

PLANS ARE BEING DRAWN UP FOR PATHWAYS TO ENABLE STATE BANKRUPTCY. CHANGED LAWS WOULD LEAD TO RENEGE ON EMPLOYEE PENSION OBLIGATIONS. DENIALS OF MUNI BOND DISASTER SHOULD BE TAKEN AS CONFIRMATION.

Plans are being constructed to permit the states to declare bankruptcy. The main victims would be pensioners and investors in state bonds. Senator John Cornyn from Texas has asked the US Federal Reserve about the possibility of crafting a bill allowing states to go bankrupt. Policy makers are working behind closed doors to enable the states to dolare bankruptcy and escape crushing debts, including the pension obligations to retirád public workers. Unlike cities, the states are barred from seeking protection in federál bankruptcy court. Any change that such status would require passage over Constitutional hurdles, since states are considered sovereign. This is curious, since the federal government tramples over the same Constitution on security matters, which former President Bush (Jr) and narco baron once called “nothing but a God-damned piece of paper.” Suddenly, the paper has merit and value. Many states have deep structural problems, like insolvent pension funds, that have obstructed funds from being devoted to essential public services like education and health care. Some members of Congress expect it just a matter of time efore a state seeks a federal bailout. The other alternative is bankruptcy, which would permit a state to alter its contractual promises to retirees. Retirees would clearly not recese promised pensions, but also state bond investors would suffer major losses, the so-called haircuts. Bond investors would find themselves at the back of the line as unsecured creditors. Fears of rendering the municipal bond market unstable on the path to state bankruptcy has brought a new wrinkle to the financial crisis.

One architect was Newt Gingrich, an advocate for legislation to allow states to file for bankruptcy. The immediate consequence is allowing them to renege on pension and health benefit obligations. This maneuver seems part of the hidden trapping to the Obamacare. Tyler Durden speculated a couple months ago, “Obviously what this means for equity investors in assorted muni investments is that a complete wipeout is becoming a possibility, as in Meredith Whitney prediction. Everyone was quick to mock and ridicule, but it is about to come back with a vengeance.” Up to $3 trillion in muni bonds have a high probability of being given the same treatment at General Motors. Investors would face severe losses. Proponents claim some states are so burdened that the only feasible way out may be bankruptcy and restructure.

 

Setkání v Davosu – Davos Meeting

DAVOS SUMMARY, DIRE WARNING VERSUS UNFOUNDED OPTIMISM. EXTREME PERSPECTIVES WERE PRESENTED AT THE CONFERENCE, BUT THE ROSY SCENARIO SEEMED TO PREVAIL. LEVERAGE AND RISK ARE STILL DEEPLY ENGRAINED IN THE SYSTEM. LOOSE MONETARY POLICY HAS GROWN AN ORDER OF MAGNITUDE WORSE. A DIVERGENCE FROM REALITY WAS THE DAVOS THEME, A WINTER RETREAT FOR THE BANKERS AND BRETHREN, THOSE RESPONSIBLE FOR THE GLOBAL MELTDOWN, THE HIGH PAID AND THE IDLE RICH. THE CONFERENCE WAS AN EXERCISE IN DENIAL, DELUSION, AND PRIVILEGE.

The World Economic Forum in Davos Switzerland offered a nice winter retreat for a couple thousand banker the world over, some utter criminals. That is not an exaggeration any longer. The special Davos magazine given at hotel check-in featured an article by Robert Rubin, former US Treasury Secretary in the Clinton Admin. It has been called the Davos Warning aptly. He is perhaps the among the top 5 greatest financial fraud criminal in modern US history, and architect of some of the most destructive restructure avoidance practices at the same time. He is an insider’s insider, an elite puppeteer in control of the USDept Treasury still. The people who are operating behind a president, do so under instructions by Rubin. The connections are numerous to Rubin, like the director of the Office of Mgmt & Budget, the former OMB director, the head of the National Economic Council, the former NEC head, the former chief of the White House Council of Economic Advisors, and more. Rubin is formerly a Goldman Sachs superstar and head of their London gold office. He is co-Chairman of the Council on Foreign Relations.

The essay from Rubin in the Davos magazine reads like a desperately written piece of advice tossed from the lifeboat after he left the ship. His Keynesian badge of failure showed, as he called for more USGovt spending. He hopes the outlays can be reversed in two or three years, after the USEconomy resumes proper course of growth. He is dreaming, and his readers probably recognize the Hail Mary pass before the buzzer. Growth is non-existent. He cannot recognize the failure of the Keynesian applications, US style, nor the delays in debt restructure he so steadfastly insists upon. The second part of the article offers a significant account of the systemic failure in the United States, in short what went wrong. Rubin wrote the following, excerpted and assembled. He must recognize that his policy of kicking the can down the road has run out of time, as the can went nuclear. He clearly no longer believes the can be kicked further, since too big and too toxic. Rubin has delivered a dire warning. The United States is in extremely deep financial and economic trouble, where the crisis will explode sooner or later, with or without action taken. That is his message.

 

Firmám klesají marže – Margins Are Shrinking

SHRINKING (OR VANISHING) BUSINESS PROFIT MARGINS ARE THE STORY FOR THE SPRING & SUMMER. WHIRLPOOL ANNOUNCED THEIR PROFITS PLUNGED, DUE TO A 100% RISE IN INPUT COSTS. THE SQUEEZE IS ON, AND POWERFULLY SO. THEIR STORY WILL BE REPEATED BY COUNTLESS COMPANIES, EVEN IN EUROPE.

The price inflation scourge has finally hit the news headlines, billboards, main stages, and stock market, but not yet the CPI. The first recognized sign was higher food prices, which will be made worse at least in the SouthWest United States after a damaging freeze. The threat of profit margin collapse is here at last, with recognition spreading across the stock market in the form of individual company quarterly statements. The Jackass has been warning for two months of the big profit squeeze. In parallel, households will feel the squeeze in the form of shrinking discretionary spending funds after the higher costs for food & fuel are factored in. Major publications like the Wall Street Journal are focusing on precisely what the Jackass said they would, higher revenues (topline growth), cited as benefits from price inflation. The WSJ has begun to discuss the encroaching problem. They wrote, “But beneath the surface lurks a fresh worry: For many companies, the cost of raw materials is rising at a faster pace than revenue. Blame it on soaring prices of everything from cotton to copper and corn. That has squeezed profit margins more markedly than many analysts anticipated, and is serving as a worrying sign for future earnings.” Exactly and finally acknowledgment, my realized forecast. Next on the earnings parade is a vanishing act and earnings plunge. Look for 2011 S&P 500 earnings per share (EPS) will come much lower than prevailing consensus. Companies like Proctor & Gamble, Ford Motors, and Kraft Foods have openly mentioned the cost rise effect. The Hat Trick Letter featured Whirlpool along the same theme. Adam Parker, the chief equity strategist at Morgan Stanley, has warned of potential disappointment on the earnings front if the cost factor bites harder into profit margins.

 

USA se blíží linitu dluhu – The US are approaching debt limit

Gross believes the debt limit debate could spark a bond market crisis. The battle over raising the borrowing limit threatens to throw the debt market into a tailspin. The efforts to reduce spending have failed, all expedient response to the ongoing chronic powerful economic recession. The spending commission was a farcical exercise, its report ignored immediately, its findings mere empty platitudes. A political battle has raged over the debt limit. Gross said, “It is the wrong way to do it. Obviously, I am all for a move to a balanced budget over time. But this is like imposing the death penalty for shoplifting. The signal it gives to countries that hold Treasurys is that their assets are hostage to a rogue Congress. That is the message it sends. It is unacceptable. The Treasury market will sell off as this gets more press and with more invective. Investors like us, we sell now.” Battle lines are drawn, and battle cry arguments are laid out. Republicans claim that bond investors will set off a Greek-style financial crisis in the United States if the national debt grows without bound. They demand deep spending cuts. The Obama Admin claims that if the debt ceiling is not raised in time, bond investors will flee USTreasurys and create a larger meltdown than the last one. The opinion of Gross matters, since global creditors must think in simile terms. The change in power over the House of  Representatives came with a pledge to cut federal spending and the national debt. They are helpless to bail water out of a sinking ship of state. Some past history could serve as prologue. Another standoff occurred in 1995 between the Clinton Admin and Republicans in the USCongress. The federal government shut down for 26 days over a three month period since the two sides failed to pass a budget. That caused nervous investors to dump USTreasurys, lifting the yield on the 10-year USTreasurys from 5.52% to 6.46% quickly.

Gross has taken action, based on his soured view, and has sold USTreasurys within the PIMCO fund. Notice the dramatic shift in strategy with reduced USGovt debt holdings. His success with mortgage backed securities was impressive, the obvious beneficiary of insider information on USGovt purchases of MBS bonds using the USFed actions. His next act seems to be large scale selling of USTreasurys into the bubble, at high prices. The January update reveals the huge change in USTreasurys, down from 22% in December to 12% in January in percentage of assets, a steep $24 billion drop (shown as rose oval). PIMCO is essentially selling into the QE2 with the USFed as buyer. Cash levels have surged in the process, from a 7% short position to a 5% positive position. The one blemish on the Total Return Fund is the current heavy load of municipal bonds. It held $238.5 billion in January, down only $17.4 billion since October. Its USTBond type holdings are a shadow of thein former volume, while mortgage bonds have begun to turn down. The left side scale applies to the individual asset holdings.

 

Bude Čína i nadále kupovat zlato? – Will China Buy More Gold?

A PROMINENT CHINESE ECONOMIST ADVISES THE COUNTRY TO SELL ITS $500 BILLION IN G.S.E. HOLDINGS BEFORE QE2 COMES TO AN END. WATCH FOR A POSSIBLE IMPORTANT BOND RUN COULD BEGIN SOON, WHOSE FIRES MUST BE CONTAINED UNDER THE USGOVT ROOF. CONCURRENTLY, RUMORS SWIRL THAT THE CHINESE S.A.F.E. FUND SUFFERED HALF A $TRILLION IN LOSSES FROM FANNIE MAE BONDS.

CHINA OPENLY CALLED FOR PLANS TO EXPAND ITS GOLD & SILVER RESERVES. IT HAPPENS THAT CHINESE SOVEREIGN WEALTH FUNDS ARE SIZEABLE INVESTORS IN THE G.L.D. FUND. THE TRADE WAR HAS MADE A TURN TOWARD HOSTILE, WITH SABER RATTLING DIRECTED AT THE MOST VULNERABLE POINT OF THE USDOLLAR REGIME, ITS PAPER BASIS AND ABSENT FOUNDATION OF GOLD.

Bloomberg has reported that China central bank adviser Xia Bin urged the country to increase its gold and silver reserves, according to the Economic Information Daily. In an interview, Xia urged China to steadily increase its holdings of gold, silver, and other precious metals. He said, “Holdings of gold and silver can help establish the Yuan as an international currency by increasing China’s final payment capacity.” Last month, he gave a similar message, urging diversification of their massive $2.85 trillion foreign exchange reserves away from US$-based bonds, and an increase in gold reserves as a long-term strategy in order to achieve global standing for the Yuan. They wish to establish the Yuan as a currency used for payment and settlement in international trade. China claims Gold holdings at 1054 tonnes, only 1.6% of total reserves, a tiny amount compared to most other nations. With tight supply and raging demand, and central banks having become net buyers, any new marginal demand in Beijing coming from diversification out of their USDollar holdings and into Gold would make a noticeable impact, leading to higher gold prices. The reference to silver by Xia was important. It marks the first time that a central bank advisor or official has spoken about diversifying currency reserves into Silver. The unique white metal, Silver is gaining acceptance as a monetary metal, not just a industrial

commodity. In fact, the Chinese formerly used silver as currency for most of their history, like most of the world including ancient Greece. Investment demand for silver has been prevalent in recent years. The cental banks are awakening to the monetary role of silver. By the way, my sources tell that the Chinese Govt has 5x to 10x as much Gold in reserves as they reveal, sort of a national strategy secret.

THE CHINESE ARE BUYING G.L.D. SHARES IN ORDER TO DEMAND THE GOLD BULLION UPON QUICK REDEMPTION, ACCORDING TO THE LONDON DEEP THROAT. THEY ARE BYPASSING THE EXCHANGES, A MANEUVER THAT WILL DIRECTLY WAGE WAR WITH THE GOLD CARTEL. NEXT THEY JUST LET IT BE KNOWN THAT THEY WILL DRAIN THE S.L.V. FUND OF ITS SILVER. THE CHINESE HAVE INTENSIFIED THE CONFLICT. ONE MUST WONDER IF H.S.B.C. IS OPENING THE DOOR FROM HONG KONG TO CHINA FOR GOLD BULLION ACCESS.

Another hat tip to King World News, an intrepid channel for high quality news developments. The same Deep Throat gold broker contact out of London updated King World News on the extremely large scale Asian buying. They have been accumulating both Gold & Silver. Through the London source, Eric King has learned the following. The Chinese, are buying staggering amounts of physical gold. The news has just gone into the mainstream media. The Financial Times was months behind King World News in reporting this information. The Asians, particularly the Chinese, want physical gold and they want it tomorrow. So the Chinese have a new method. They are now planning to buy tremendous amounts of the Exchange Traded Fund GLD. They will then tender the GLD shares for immediate delivery of the gold. This bypasses all of the rules like at the COMEX that limit delivery. King believes there is no limit as to how much they can buy from the ETF GLD. There is no metal. Asia has opened the market to the retail public, met by massive fresh new orders to buy both gold and silver. Pressure will come to the only source available to meet COMEX demand, as the GLD inventory will be drained. By the way, these sovereign sources through their buyers can also purchase shares in SLV and stand for delivery. It is possible you may see that in the future (which was just confirmed).

Notice the usage of the term sovereign sources, which means the ultimate purchaser source might actually be the SAFE or other Chinese sovereign wealth funds. Couple the new GLD strategy to obtain gold with the Dollar Swap Window in Europe, useful for converting discounted PIGS sovereign debt into Gold bullion with the assistance of the IMF. The Chinese are broadening their assaults of the Western gold fortresses.

 

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Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – leden 2011

Čtvrtek, Leden 27th, 2011

USA na skluzavce – The United States sliding

EVIDENCE OF THE UNITED STATES SLIDING INTO THE THIRD WORLD IS STACKING UP. THE ECONOMIC AND DEMOGRAPHIC AND TRADE INFORMATION IS ALARMING. WITH RISING INTEREST RATES AND STATE IMPLOSIONS, TOGETHER WITH USGOVT DEFICITS THAT CANNOT BE FINANCED, EXPECT AN ACCELERATION IN THE RAMPANT AGGRAVATED DECLINE. THE BATON OF DOMINANCE IS SLOWLY BEING PASSED FROM THE UNITED STATES TO CHINA, AMIDST A GROWING TRADE WAR AND HEIGHTENED FRICTION.

The amazing aspect of collapse is that if it occurs slowly, people tend not to notice the overall trend and pattern. The analogy is a frog that does not notice being boiled alive in a kettle atop a kitchen stove. Snapshots every six to twelve months would be far more shocking, rather than the daily slide. Warning signs abound like rising long-term interest rates, threats of downgrade for USGovt debt, lack of improvement in the job market, continued home foreclosures, rising food and gasoline prices, cities and states going bust in their finances, vanishing pensions, the isolation of the props to the stock market, and new dependence of the USTreasury market on QE2 monetary printing, the continuation of the costly endless wars, birds falling dead from the sky, fish washing up dead on the shores, and the further erosion of rights at airports, banks, and foreign embassies.

The US disseminated the arrogant thesis in 2010 that its mammoth deficits do not matter, a notion that should be shattered in year 2011. Huge deficits became a fixture, overruling the temporary notion. It will be the year when the system breakdown explodes in full view, with numerous sides and broken platforms. It will be the year when an alternative to the USDollar is possibly introduced. Foreign economies have a tough choice to sink with the US or to oppose the USDollar in a functional manner. It will be the year that China suffers some shocks, but responds impressively, unlike the US. Their reserves, large industrial base, ample labor force, greater tendency toward capitalism, and ability to bring about true reform will distinguish them from the US, which is committed to its power base and full blossomed failure. It will be the year when in the United States, several major states will go into debt default and ruin, like California, Illinois, Florida, New York, and New Jersey. They will appeal to the USGovt, which will tell them to renege on worker pensions, then to return hat in hand. It will be the year when the US banking system suffers the shock of at least one big bank entering a death spiral, fully denied, but occurring in full view, denied until its bailout request is registered with the USGovt. The consequence of the bank failure will be to threaten the entire US banking system with a possible bank holiday shutdown. The wild card for the United States is a leak of the Mexican Civil War. There is no other accurate way to describe it. The chaos was forecasted in the summer 2007 by the Jackass, timed to show by 2010.

The concept of Too Big To Fail will return to tabled discussions for more debate. In my view, this concept represents a commitment to systemic failure and vigorous defense of the broken status quo, including its tilted power structure where Wall Street almost completely controls the USGovt. True reform and restructure is vigorously blocked by Wall Street firms, as Theky steer the USGovt finances and gut it for their own welfare.

 

Vývoj na trhu obligací – Bond Market Development

HUGE OUTFLOWS HAVE STRUCK FROM US-BASED BOND FUNDS, WHILE THE OUTFLOWS CONTINUE FOR STOCK FUNDS SINCE MAY 2010. EVEN THE FLAGSHIP PIMCO BOND FUND SAW NET REDEMPTIONS. THE PUBLIC IS STEPPING ASIDE AS THE USFED DOES ITS DESTRUCTIVE WORK.

The bond market contradiction to the USFed monetization plan is without precedent in US bond market history, a grandiose insult.

INVESTMENT THEMES FOR 2011 INVOLVE THE EUROPEAN BOND MARKET, THE AUSTRALIAN CHINA CONNECTION, USGOVT BUDGET BATTLES, MEMBER STATE RISKS WITHIN THE UNITED STATES, FALLOUT FROM USFED SCRUTINY AND CHALLENGES, AND BIG USBANKS FALTERING. THE AUSSIE-CHINA TRADE LINK IS IN THE PROCESS OF EXTREME STRESS TESTS FROM HARSH WEATHER DOWN UNDER.

GREENSPAN WARNED OF A POSSIBLE BOND MARKET COLLAPSE. HE HAS COME FULL CIRCLE FROM BOASTING OF SOPHISTICATED OFFLOADED RISK, TO CONCLUDING THE SYSTEM IS BROKEN AND TEETERING ON THE EDGE. STOCKMAN WAS MORE SPECIFIC ON THE IMMINENT BOND MARKET CRISIS, AND THE WAR COSTS THAT ASSURE ITS  CCURRENCE.

A BIG MUNICIPAL BOND DUMP IS IN PROGRESS. GRAND MUNI SHOCK WAVES WILL BE FEATURED IN 2011. THE RIPPLE EFFECTS COULD EASILY REACH THE USTREASURY COMPLEX. WATCH AS THE USCONGRESS STANDS IDLY BY, ORDERED BY ITS WALL STREET HANDLERS. THE RULING ELITE WISH TO CRIPPLE THE STATES AND TO END THEIR LAVISH PENSION PROGRAMS.

Some bond analysts with a good grip of reality believe the US Muni Bond market has the potential to drag down the USTreasury market.

 

Bitva o rozpočet – War Over the Budget

A war over the USGovt budget will likely expand into a war over the royal-like USFed independence in spotlight. The predatory and secretive deals struck by the USFed will be front & center, as legal challenges mount. The USFed conducted between $13 and $20 trillion in secret loan deals in late 2008, whose cover was given by the TARP Fund extensions. Global elite control and slavery is their objective.

GEITHNER DEMANDED AN URGENT RAISE OF THE USGOVT DEBT CEILING LIMIT TO AVOID A DISASTER. THE CLASH WITH THE USCONGRESS HAS BEEN ENGAGED, EVEN SUDDENLY ELEVATED. THE FEISTY USCONGRESS REPUBLICANS HAVE MADE THE DEBT LIMIT INCREASE DECISION MORE DIFFICULT FOR PASSAGE. THE BATTLE LINES HAVE BEEN DRAWN.

Through their Goldmans Sachs mouthpiece and low ranking lieutenant, the Obama Admin has urged the USCongress to raise the USGovt debt limit with urgent dispatch. They chose to use the diminutive Treasury Secy Geithner. The debt from the USGovt source is expected to reach its legal borrowing limit by the end of March and no later than mid-May 16th. Geithner urged House and Senate leaders to move quickly to raise the debt ceiling so as to avoid an unprecedented disaster or even default. The new USCongress is loaded with mavericks, angry independent types, and lone wolves determined to bring change. Many newcomers have openly pledged to vote against any increase to the debt limit. The stage is set for legislative brinkmanship between the president and legislators, a battle that has played out several times in past decades. The budget showdown features Republicans who will try to

force President Obama to accept deep cuts in domestic spending as the price for their votes. The outstanding gross national debt stands at $13.95 trillion, only $335 billion below the $14.29 trillion debt limit set by the USCongress last February 2010. That headroom slack is sufficient until through the calendar 1Q2011. The limit is expected to be breached this spring. The Obama Admin was leaving to the USCongress the decision on how much to raise the limit.

Geithner made the official statement, “If we are forced to do some [emergency actions] again, these measures could delay the date by which the limit is reached by several weeks. Once these steps have been taken, no remaining legal and prudent measures would be available to create additional headroom under the debt limit, and the United States would begin to default on its obligations. Failure to increase the limit would be deeply irresponsible. It is important to emphasize that changing the debt limit does not alter or increase the obligations we have as a nation. It simply permits the Treasury to fund those obligations the Congress has already established. Given the gravity of the challenges facing the United States and world economies, the world’s confidence in our creditworthiness is even more critical today.” HE MENTIONS THE WORD DEFAULT!!

 

________________________________________

Na základě souhlasu Jima Willieho budu zde pravidelně publikovat výňatky z jeho Hat Trick Reportu, jehož jsem předplatitelem. Výňatky budou publikovány formou citátů. Vybírat budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – prosinec 2010

Čtvrtek, Prosinec 30th, 2010

Euro

EUROPE HAS TWO PROBLEMS, THE ABSENT EURO CURRENCY COHESION AND THE IMMINENT UNION BREAKUP. THEY ARE INTERWOVEN. DELUSION BRIMS WITH MERKEL AS ITS HIGH DEMAGOGUE. WHILE AGREEMENTS ARE MADE IN PRINCIPLE, THE REAL DEALS HAVE BEEN DELAYED UNTIL 2013 ADMIST UNUSUAL UGLY BICKERING. CRISIS WILL NOT WAIT UNTIL THEN. THE NEW E-BONDS ARE A CONTRAPTION DEAD ON ARRIVAL, AND THE BONDHOLER LOSS ASSURANCE KEEPS THE CONFLICT ALIVE.

EUROPEAN NETWORKS HAVE REVEALED THE DUAL EURO CURRENCY PLAN. CONTRARY TO SHALLOW US-BASED THOUGHT, A UNITED EUROPE IS NOT WHAT GERMANS DESIRE. A TWO-TIERED CURRENCY IS INEVITABLE, NOT FOR CONVENIENCE, BUT FOR SURVIVAL. THE DIVISION WILL BE OF NATIONS AS DEBTOR AND DEFICIT AND UNSTABLE VERSUS NATIONS AS CREDITOR AND SURPLUS AND STABLE. THE SPLIT MIGHT BE TIMED WITH THE HANDOFF FROM THE RETIRING TRICHET AT THE EURO CENTRAL BANK.

The Euro currency split is assured, just a matter of time. Whether by means of a leak or from careful sharing of plans, the story is coming out. The continent is preparing itself for two Euro currencies, a sick one and strong one, a debt ridden one and another fortified by much more healthy economies laden with surpluses. After two years of ridicule and contempt, the urgent necessity has become apparent, even obvious. My longstanding position has been that unless and until a nation or group of nations can break free of the USDollar, they will suffer a downward spiral of financial breakdown, economic ruin, and systemic failure. The same has turned true of the Euro ties. If Germany does not cut loose from the sinking Southern nations in the PIIGS pen, they will succumb to the same fate. Think of a drowning man loaded with bricks in his pockets, clinging desperately to his friends. They go down together, until the strong swimmer without the brick burden cuts free. The single common Euro currency was faulty from the start. The hope of the original framers was for the entire continent to adopt the German industriousness, their financial prudence, their efficiency, but that has proved a delusion and a view in incongruity with tribal nature. The Southern nations cannot develop export trades, as they lack ingenuity, discipline, and strong work ethic. As each nation emerged with its own interest rate on marked EuroBonds, the heterogenous nature of the Euro became obvious, even the target of arbitrage. Traders snuck in EuroBonds with Spanish markings and traded them for those with German markings, pocketing the difference in bond yields. Fast forward a few years, and the differentials are ripping the Euro currency apart. In fact, the common currency is an utter joke, given the fractious differences. In no way does Germany wish to continue bearing the annual $300 billion cost of keeping the union together. In fact, 90% of the German public want no more common Euro currency.

On the other side, the new Nordic Euro currency will eventually take on a gold component. It is already in the planning stages, a difficult development process. The schedule is for launch in June 2011. My personel belief is that a deley will come, but its launch is a certainty. The global players demand a more stable currency core. They demand a return to a gold standard in some form.

 

Jsou švýcarské banky opravdu bezpečné? Are Swiss Banks Safe Harbor?

THE SWISS BANKS HAVE OBSTRUCED GOLD & SILVER WITHDRAWALS. SO FAR NOT A BAN ON BULLION EXIT. DEEP SUSPICION SHOULD BE DIRECTED AT THE SWISS. WATCH FOR A FORCE MAJEURE HEIST IN THE FUTURE. THE CHINESE HAVE BEEN GIVEN A STRING OF POWERFUL MOTIVES TO ACCUMULATE GOLD, EVEN ON THE SLY.

The stories coming out of Switzerland appear to confirm the warning given in the Hat Trick Letter last summer of a potential Force Majeure bank heist, specifically with games played on inventory receipts. Such a nasty event would not occur immediately, but rather with stages leading into the massive theft. It is clear from the few stories that the Swiss have leased most of their Allocated gold accounts, in my view. Reports are consistent. The first is from a King World News interview with Jim Rickards of Omnis. He reported that a client of a major Swiss bank requested his one metric ton of gold bullion, owned outright out of the bank, but the bank refused to deliver his gold. He openly inferred that the Swiss bank had either leased it or done something improper with it.

Rickards said, “I obviously cannot mention the names of the individuals or the banks involved, nor is there any need to. But just the bare bones which was reported to me was that an individual had a ton of gold, worth about $40 million. He simply wanted the gold. Now this was not paper gold. It was not unallocated gold. It was not a gold future or a gold forward, gold option or COMEX gold. This was just good old fashioned gold where he owned it outright. It was in effect a warehouse receipt that they give you. He had his gold put there and they gave him the receipt. The gold is supposed to be sitting there. Upon request to move the gold, the bank demurred. I could see that taking a day or two. Eventually the individual did get his gold, but this is something that should have taken two days, three days, a week at the most, although I would say even a week is a long time. But it took thirty days, and it took lawyers, it took threats of publicity, it took a lot of pressure to do that, which my inference is that that gold was not there.  The bank had to scramble, go out and find it somewhere before they could make good delivery.”

Rickards made some bold statements about how among the major Western nations, the governments control the big banks. Better yet, the big banks control the governments. Rickards expects that in the future at some point, the governments are going to order the banks to freeze the gold. They will forbid removal of gold in ownership, and not make the gold available to bank clients. He expects the banks to apologize but then explain the clients have a claim, but it would be redeemed in cash so as to avoid basic charges of larceny. The banks eventually will forbid the removal of gold. It is best therefore to make sure of being OUTSIDE the system, and not to even deal with banks with such stored wealth. Rickards continued with some additional remarks about the grand USFed loans in the $trillions, even to non-financial firms like General Electric and Harley Davidson. He called the unprecedented gestures an unlimited call on the taxpayers money. He called it a huge crime. He identifies the USFed corporate largesse as a motive for the Chinese to purchase gold bullion.

Rickards said, “It is clearly not going to be prosecuted, but the way the regulators have become captive to the banks and the non-banks, and the way the banks leverage off balance sheets, the way they in effect lie about their financials, the way they hide their liabilities and expect to be able to march up to the Fed and get all the money whenever they want at zero interest whenever they need it, no wonder the Chinese are going to gold. The US has 72.8% of its reserves in gold. China has 1.6% of its reserves in gold. What does that tell you about what the United States thinks is money. For over six years China has operated in the gold market through stealth. They basically have had secret agents working through SAFE (State Administration for Foreign Exchange) and other agencies. This is the complete corruption of the Fed.”

JAMES TURK CONFIRMED THE SWISS OBSTRUCTION ON BULLION RELEASE. OTHER STORIES HAVE SURFACED IN CONFIRMATION. SILVER IS INVOLVED IN DELIVERY BARRIERS AS WELL. THE STORIES COULD BE A SIGNIFICANT FACTOR IN THE PRECIOUS METALS RISE IN PROGRESS, AS ADDING FUEL TO DEMAND.

Since the King World News interview with Jim Rickards that a Swiss bank client was refused his $40 million of gold, the story has been going viral. In follow-up, KWN interviewed James Turk out of London, who cited yet another example. Turk is the founder of GoldMoney, the high integrity bullion repository for investors. He said, “I found that Jim Rickards comments about the individual who had difficulty getting $40 million of gold out of the Swiss bank where he had it stored very interesting. I could tell you several stories of similar experiences. Let me just cite one example that is ongoing. This individual has been storing with a Swiss bank twenty 1000 ounce bars of silver which has a market value today of just over $550,000. So, it is not only large transactions that are affected, but small ones too. When I last emailed this individual a couple of weeks ago, he was still trying to get his silver from this Swiss bank. This has been going on for over two months, and again we are only talking about 20,000 ounces of silver. This may seem unimaginable to some people, but I had told this individual in September when he contacted me, that I had seen this problem repeatedly with other people. He was quite confident that he would not have a problem getting his silver because he had been paying storage fees on it since buying it in the late 1990s. The Swiss bank is insisting that he take cash, but he is demanding his silver which is supposed to be sitting in the bank vault be delivered to him. As I said before, I know of other examples like this one. Circling back around to the Jim Rickards interview, he ended with some very good advice, with which I wholeheartedly agree. Make sure your gold and silver are stored outside of the banking system. It is important for people to keep their eye on the big picture and not be distracted by short-term volatility in the price of gold and silver. The long-term trend for both precious metals is still pointing higher.”

The takeaways are many. The Swiss banks are illegally withholding client gold & silver. They have in all likelihood illegally leased and sold it. They are illegally charging vault storage fees, since not in possession. They are most likely on the verge of bank failure from prolonged insolvency. Lastly, the Swiss banking system implosion seems a possible outcome during the next powerful moves in gold. The direct inference is that the Swiss banks have secretly assumed deep counter-party risk to leasing of gold & silver, with all the heavy risks of being short gold & silver. Their partners in crime are probably the major Western banks in the US and London, the Big Four on Wall Street, and the seamy allies in London.

Truth in Gold has grabbed onto the same story and drawn some conclusions. A comment was made with derision about the US sleepy public on the gold & currency matters of the day. The population probably feels insulated and immune from what comes. He wrote, “Not in this country of course, but globally precious metals investors are looking at these stories and deciding to get their metal out of the banking system. The knowledge that paper claims on gold & silver outnumber the actual amount of physical gold & silver available to be delivered by insane multiples is finally being widely circulated. Those who understand this situation are going to ask for the delivery of their metal. In other words, in my view, there is a scramble going on internationally for investors to take delivery of gold & silver. This is part of why we are seeing the metals trade inexorably higher.” The Germans live next door to Switzerland. Thus their practice to stuff bank safety boxes with gold. It is a tough question whether a safety deposit box at a bank is truly secure from confiscation and cash redemption. In the United States, bank safety boxes are subject to confiscation from the Patriot Act.

 

Vládní bondy USA – US Treasuries

THE USTREASURY YIELD ON THE 10-YEAR NOTE HAS MOVED ABOVE 3%, AGAINST MY FORECAST. REGARD THE NEW TREND TO BE A GLOBAL REJECTION OF BOTH THE USGOVT FISCAL CONDITION AND USFED ACTIONS. THE USFED HAS FAST LOST ALL CREDIBILITY. THE ECONOMIC IMPACT WILL BE FELT NEXT YEAR, WITH DAMAGE TO HOUSING MARKET AND USECONOMY. $$$

The Jackass made another forecast error on the 10-year USTreasury yield, the asset class where almost all errors have occurred. My expectation was for the yield (also called TNX) to descend toward 2.0% to mark the climax top of the USTreasury Bond bubble. This makes perhaps the third forecast error in Jackass history related to the USTreasurys. It would be best never to forecast bond yields ever again. The announced Quantitative Easing #2 marked the bottom in bond yields, and the top in bond principal value. The reversal pattern indicates a 3.75% target, no forecast, just a chart target. The world has turned wise to the USFed, its skein of failures, its lunatic views, its consistently wrong perceptions, and the broken nature of the USGovt debt. The world might also be wise to the broken insolvent US banks, and the insolvent ruin among households, even that the United States is unable to make right its economic ship. It seems a great dare has taken place by global USTBond holders, a dare in the bond market for USFed to wreck the USDollar foundation further. Instead of front-running the USTreasury Bond market, the global bond investors have abandoned it.

The foreign creditors have lost respect for the USFed, and for Chairman Bernanke. Insults cast at the G-20 Meeting in South Korea testify to the lost respect, lost credibility, and lost leadership of the USFed itself. The USTBond selloff is a follow-up insult after the global meeting. History has made a turning point. The global central bankers have accelerated their conversion from USTBonds to Gold. They no longer believe the propaganda of a USEconomic recovery, the new byline of propaganda. Closer to the harsh reality is fast falling USDollar and fast rising price inflation, which urgently require a higher bond yield to address the asset erosion. The bond market has responded to the crystal clear continued preference still by the USGovt for costly stimulus over deficit reduction. Hyprocrisy is clear, since the deficit reduction committee just last week released their conclusions. The USGovt stands alone among major nations without any conceivable austerity program. The next story in 2011 will be the rising debt borrowing costs and rollover costs that catapult the deficit higher. Higher mortgage loan rates, even car loan rates, will damage the ruined housing market and work their way into the entire USEconomy. Quietly lurking as a grand damage factor is the Social Security pendulum swing. Its cash flow at the USDept Treasury has turned negative. No longer can the people deceive themselves that some sort of imaginary Trust Fund is going to turn their financial tide, or even fund their retirement with supplemental checks. It does not exist.

Another very large hidden factor is at work in my view, almost a generational factor. htl-pros From 1990 onward, big banks including the central Bank of Japan have played the Yen Carry Trade, borrowing 0% Japanese Yen and investing in US stocks and USTreasurys at much higher yields. This is a multi-$trillion financial engine!! The yield differential was compounded by a falling Japanese Yen, enforced with vigor by the Japanese Govt, which has perhaps the worst debt ratio of any industrial nation. With the USTBill yields near 0% and the long-term USTreasury Notes having bottomed at 2.4%, the game is over.

Pohled na WikiLeaks – WikiLeaks View

THE WIKILEAKS SCANDAL COMES FROM INSIDE THE USMILITARY WITH PASSWORD CLEARANCE AND THE USBANKS FROM ABSCONDED DISK DRIVES. THE BANK SOURCE EXTENDS FROM A FAILED ICELAND BANK AND PROSECUTION WITH THE KAUPTHING BANKER, WHO HAS TURNED STATE EVIDENCE. A PLOT TO RESTORE THE USGOVT FROM INSIDE SOURCES IS UNDERWAY. A BATTLE BETWEEN GOOD & EVIL IS APACE IN A GRAND BLOWBACK AFTER 911 AND THE $TRILLION MORTGAGE BOND FRAUD. A SOURCE WITH GREAT TIES TO BANKS, MILITARIES, AND SECURITY SYSTEMS PROVIDED SOME INSIGHT.

“The Anglo American fraud and genocide cartel will be exposed. WikiLeaks was just a teaser. The Boyz took the bait, exposed their reaction profile, and aligned the forces, leaving it vulnerable. This is not directed against the American people but against the syndicate which was allowed to highjack the United States government. The real terrorists are deep within your own structures. A flash event will be generated for use that will create a political and economic vortex. The 21st American Revolution just started. It is all inter-connected. The Asians are the ones who will push the US over the cliff after the bankers themselves stepped to the edge by blowing themselves up. The WikiLeaks information comes from several hard drives from DeutscheBank and Goldman Sachs. The hard drives where handed over by a Goldman midlevel banker whom the European authorities had in custody in reference to the Euro 350 billion fraud Goldman Sachs engineered for the Greek Govt’s Treasury Department. The evidence that is piling up all over the place is incomprehensible. The big break was a top Kaupthing Bank executive from Iceland & Luxembourg, who led the investigators to the right back doors to lift data out of the systems. They found that the mega-banks are operating a shadow world with its very own bookkeeping and back-office set up, all totally off-balance sheet and out of sight and reach of the regulators. Those two systems, the overt and covert, have disconnected and are ripping the system to shreds. It is basically a mega-Madoff scheme that they are running, only a thousand times bigger. Madoff’s game was a satellite office that blew up when it was not properly supervised. The blowback was and is horrific since the entire system is now cratering.

The WikiLeaks site is being fed the information obtained from deep inside the system. There are people inside who very well understand that the system can only be brought down from the inside out. Witness how they hit Hillary Clinton by exposing her spy instructions to the US diplomats worldwide. In the latest Wall Street Pentagon Papers, the people were told that data was allegedly released by the babyface soldier, of rank private.. The papers reveal a $12 trillion unauthorized grant to global bankers as the hidden part of the TARP Fund used for buying up global assets after the price ambush following the Lehman Brothers failure. The flow of data comes from the top, not the bottom.The data grab required access with three passwords to enter the archives, something only known to 4-star generals at the Pentagon. The access was not through hacking but through opendoor access with proper credentials. Beware of a military Coup d’Etat going on in America and no one gets it. Next, WikiLeaks will next go global and viral in pure decentralized fashion. Thousands of WikiLeaks will be set up in lightning speed that will be fed from a central invisible source, which then publishes simultaneously all over the world. Their counter-attack retaliation against those who assisted on the WikiLeak crackdown is impressive [credit card companies]. Things don’t just happen; they are allowed to happen. Problem-Reaction-Solution.”

 

______________________________

Tento výňatek je publikován na základě souhlasu Jima Willieho, jehož Hat Trick Report mám předplacen. Výňatky publikuji formou citátů. Vybírám budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

 

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – listopad 2010

Úterý, Listopad 30th, 2010

Ekonomika USA – US Economy

NEXT FOR THE USECONOMY IS AN INFLATIONARY DEPRESSION. THE DEEP RECESSION WILL WORSEN. THE PRICE INFLATION WILL COME FROM QE2.  THE BOND CRISIS WILL SOON EXPLODE IN FINANCIAL MARKETS. POLITICAL SHOCK IS ASSURED, BUT ITS FACE IS UNCERTAIN.

HIGHER CRUDE OIL & FOOD COSTS WILL RAISE DANGEROUSLY THE COST STRUCTURE OF THE ENTIRE USECONOMY. FURTHERMORE, ANY RISE IN THE CHINESE YUAN CURRENCY EXCHANGE RATE WILL RESULT IN HIGHER CONSUMER PRICES IN A WIDE RANGE FROM ELECTRONICS TO HOUSEWARES. BY LATE 2011 OR EARLY 2012 THE HORRENDOUS STAGFLATION WILL BE RECOGNIZED IN FULL BLOOM, BUT IT WILL BE TOO LATE.

In my view, the achieved $1400 gold price goal will not raise alarm. However, the $100 crude oil will surely ring loud alarm bells, especially if the gasoline price makes a big jump by the next summer driving season.

It bears repeating: The big curve ball upcoming by spring or summer 2011 will be that price inflation will be called growth, even while job losses continue. Only when unemployment moves higher still, will the wake-up call be heard on the dangerous price inflation realized. When the contradiction in continued or worsened unemployment arrives, the public will see the growth as a mirage, or an affixed billboard from the propaganda machine. My belief is that by the end of 2011 or early 2012, the public will awaken to the reality of worse economic recession but with accompanied heavy price inflation. STAGFLATION WILL ARRIVE EARLY IN 2011 AND DELIVER A NASTY TOLL. It is already here, but will grow worse. By the end of 2011, it will be too late to fix anything. Systemic failure will have gathered far too much destructive momentum.

 

Banky – Banks

WELLS FARGO HAS BEGUN TO IMPLODE. WHETHER ILLIQUID INSOLVENCY OR MECHANICAL BREAKDOWN DUE TO LACK OF FUNDS, THE BANK HAS BEGUN TO LIMIT WITHDRAWALS. A BANK RUN IS NEXT. ITS PROXIMAL CAUSE FOR RUIN STEMS FROM MORTGAGE LOSSES IN GENERAL. THE BIG USBANKS HAVE BEGUN TO SHOW DEATH SYMPTOMS. LACK OF CASH IN A.T.M. MACHINES IS ONE WARNING OF A BADLY DISRUPTED SUPPLY CHAIN, WARNED BY THE JACKASS. IT HAS BEGUN, LEADING TO A BANK HOLIDAY.

The problems are not just with Wells Fargo, but also JPMorgan Chase and Bank of America customers limited on withdrawing cash. The rumor of a bank holiday across Twitter and other internet forums has caused early action toward bank runs. Numerous ATMs across the country have crashed over the previous weekend (November 6th & 7th), preventing customers from performing basic transactions.

If not in November, they will come perhaps before Feburary 2011, my late date limit forecast.

A DOMINO EFFECT OF BIG USBANK BREAKDOWN IS READY TO BE REVEALED. ONE BIG USBANK FAILURE EVENT WILL BRING DOWN THE PACK OF CARTEL ZOMBIES. THEY SHARE A FATE FROM DIVERSE RUINOUS CONNECTIVE TISSUE IN SIMILAR BALANCE SHEETS AND COMMITMENTS.

Many investors wonder which big US bank will fall first, or show great distress next. It does not matter. Whenever one wobbles badly and noticeably, whether Bank of America or Wells Fargo or Citigroup, the rest as a group will wobble equally and with the same effect. The inescapable outcome will be a temporary shutdown of the US banking industry.

BEWARE OF THE BIG BANK DEATH SPIRAL. DEEP LOSSES LEAVE THEM VULNERABLE TO INTERNAL SEIZURES DUE TO ILLIQUIDITY. THE EXTERNAL THREAT IS FROM CONTINUED LOAN DEFAULTS, COMPOUNDED BY CIVIL DISOBEDIENCE.

Expect similar stories in the next couple weeks for Wells Fargo, Bank of America, Citibank, JPMorgan, and HSBC. What the big US banks all have in common is mortgage putbacks, foreclosure fraud, lawsuits, and growing civil disobedience from homeowners refusing to pay monthly payments.

THE 2ND MORTGAGE LIEN THREAT IS ANOTHER $450 BILLION MONSTER. WORSE, IT FORMS A GRAND OBSTACLE IN THE FORECLOSURE PROCESS. BANKS REFUSE TO TAKE TOTAL LOSSES ON SECONDS. SO THE LOGJAM OF DEFAULTED AND FORECLOSED HOMES PILES UP IN INVENTORY. AN OMNIBUS BAILOUT PLAN WILL BE DISCUSSED SOON, LIKE A MARSHALL PLAN. THE HOUSING MARKET IS TOTALLY DESTROYED.

The big bank exposure on second mortgages and home equity loans is sufficient to wipe out over half of the entire bank equity. Bear in mind that the big banks are insolvent with negative valued balance sheets in the world of reality beyond FASB niceties. Wells Fargo has more second lien exposure than any other big bank, relative to their equity valuation (total stock market cap value). They must resolve the conflict, since the bank is dead two times over. They must admit the second liens are worthless, but they refuse to do so. Fantasy wafts like fairies, as banks cite 5% delinquency on second lien home loans, when in almost every case, the lien is worthless. See the Big Four exposure on second liens, in which Citibank has much less than Bank of America, Wells Fargo, or JPMorgan. Some mid-tier banks are dead on arrival.

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Zlato – Gold

JS Kim of SmartKnowledge Pte Ltd surmised in May 2010 about the impact of price suppression. He wrote, “If US regulators stepped in and said Goldman Sachs, HSBC, and JPMorgan could not participate in the gold and silver futures market for three weeks, I really think you would see the gold and silver price more than double in that time.”

NINE BASIC REASONS WHY GOLD WILL CONTINUE ITS POWERFUL BULL RUN. INSOLVENCY AND DIVERSIFICATION OF RESERVES DOMINATE THE MOTIVES, AS SENTIMENT HAS CHANGED AND HOSTILITY IS EVERPRESENT AMONG FOREIGN ENTITIES.

Dundee Wealth Economics offered justification why the gold bull market will continue, along with the continued powerful short cover squeeze at the London LBMA metals exchange. A deadly gold & silver short covering death spiral is in progress. It might be taking a brief vacation for a few days to recharge and reload. Canadian money manager Dundee Wealth lists nine detailed reasons why the bull market in gold will continue with gusto.

1) Global fiscal and monetary reflation: PIIGS, US, UK.

2) Global imbalances: the USDollar must decline.

3) Global FX reserves are excessive: diversification must occur.

4) Central bank attitudes to gold: now positive.

5) Gold bubble nonsense: room to rise.

6) Mine supply is flat: peak gold is here.

7) Investment demand: new strong uptrend.

8) Commodity price cycle: new bull run.

9) Geopolitical environment: positive since filled with crisis and conflict.

DE-REGULATION IN CHINA MIGHT PERMIT MUCH BRODER GOLD OWNERSHIP. THAT WOULD UNLEASH HUGE DEMAND AND PRESSURE THE ANGLO BANKERS. CHINESE DEMAND HAS BEEN STRONG FOR YEARS, SOON TO REACH A HIGHER GEAR. WITH DOMESTIC MINE OUTPUT NOT EXPECTED TO GROW MUCH NEXT YEAR, CHINA WILL TAP THE GLOBAL MARKET, PUSHING UP THE GOLD PRICE.

Deregulation is coming to China in the gold market. The nation has already been the site of tremendous private demand, whose volume easily offset European central bank sales. The Chinese gold demand in 2010 will be a consensus estimated 500 tonnes. It will rise by as much as 20% in the year 2011, enough to surpass India as the top consumer in the next three years. Demand is forecasted to rise to around 600 tonnes in 2011, according to a Reuters survey of five analysts. Recent Chinese Govt restrictions imposed on property investment and speculation in other markets has resulted in more money going into gold and jewelry, which seems a calculated policy by the crafty government officials in Beijing. Gold will not burn their citizens in a bubble bust. Jewelry demand has risen by an average of 7% annually in steady fashion. Investment demand for gold in China has surged by 60% in 2009 to 150 tonnes.

THE G.L.D. GOLD EXCHANGE TRADED FUND IS GRADUALLY BEING EXPOSED AS A COLOSSAL FRAUD. ITS NET ASSET VALUE FROM GOLD DEPOSITS STANDS AT A PALTRY 96.7 PER SHARE, BEHIND ON METAL INVENTORY PACE. THE LACK OF BUYING SINCE JUNE 2010 IS A SMOKING GUN OF ITS CORRUPT MANAGEMENT. THE H.S.B.C. PROTECTORS HAVE DECIDED TO DOUBLE THEIR PAID SALARY.

As is gradually becoming clear, the GLD fund is not about physical gold but rather control of the gold price from heavy leasing and midnight cooperation with the LBMA futures market. My theory is that GLD has continued its leasing of metal inventory, but now has resorted to stealing investor funds. They routinely turn around and supply gold bullion to the embattled LBMA to prevent defaults at the metals exchange. Recall that HSBC is one of the two banks recently charged with a class action lawsuit for precious metal price manipulation, including RICO racketeering charges.

htl-list-2

 

Stříbro – Silver

THE SPROTT SILVER FUND HAS LAUNCHED. THE FUND HAS BOUGHT 6.5 MOZ SILVER AT $25.82 PER OZ. THIS IS THE BEGINNING OF A JUGGERNAUT, AN HONEST PHYSICAL FUND. LEGITIMATE INVESTORS SHOULD HOPE THAT IT DRAINS INVESTOR FUNDS FROM THE CORRUPT S.L.V. FUND RUN BY JPMORGAN. IT WILL SURELY DIVERT THE SUPPLY CHAIN TO THE COMEX, SINCE MINING FIRMS WILL SUPPLY SPROTT DIRECTLY. SOME INITIAL BLOCKS APPEAR TO HAVE SPRUNG UP FOR ACCESS TO THE SHARES BY BROKERAGE HOUSES. GOLDMAN SACHS IS ACCUMULATING PHYSICAL SILVER!!

Asian buyers have been squeezing the shorts in the silver market, causing great pain as the silver price has risen 50% since late summer. After the drop in price from a brief $29 touch down to the low $25′s, the elastic physical market has responded with strong demand. Keep in mind that the paper silver market is the opposite, a key point. The bizarre anomalous inelastic paper market results in more selling when the price drops, the opposite to normal. So a collision is in progress, with grand fireworks behind the scenes, not visible to the public. The battle is on, where physical always wins if demand remains vigilant and purposeful. The physical players rush to respond to the generous discount that results from the bear raids and ambushes on the paper side. The paper players cannot produce enough silver after the raids push down the paper price in order to relieve their horrible short condition. By pushing down the paper price, they must bring to the table the discounted silver at the lower price. The paper market corrupt mavens are hastening their own death. A few more rounds and the COMEX and LBMA will be totally broken. Then comes a $50 silver price suddenly, followed by a $100 price within months.

 

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Tento výňatek je publikován na základě souhlasu Jima Willieho, jehož Hat Trick Report mám předplacen. Výňatky publikuji formou citátů. Vybírám budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – říjen 2010

Pondělí, Říjen 25th, 2010

Shrnutí Jima Willie – Jim Willie Summary

SOME FINAL COMMENTARY, WRITTEN BY THE JACKASS WITH GREATLY MIXED EMOTIONS. THEY ARE SADNESS, SHOCK, DISAPPOINTMENT, SHAME, EXCITEMENT, SATISFACTION, DISGUST, ANGER, DISBELIEF, AND DESIRE FOR JUSTICE. SYSTEMIC FAILURE IS IN PROGRESS BEFORE YOUR EYES. ITS DRIVING FORCE IS BANKER CRIMINAL BEHAVIOR. SEVERAL MONTHS FROM NOW, CALLS WILL COME FOR NUREMBERG BANKER TRIALS. THE NATION IS AT RISK OF MARTIAL LAW FROM CHAOS. THIS IS MY OWN VIEWPOINT. $$$

The kiss of death is the fraudulent MERS title vehicle. Later, the kiss of the funeral coffin will be the fraudulent REMIC finance vehicle. The class action lawsuits just received a huge energized positive push. A systemic risk to the US financial system from the foreclosure scandal is more than acute, since stark, public, and obvious. In time this could lead to a big bank shutdown holiday within the next couple months, like Christmas or before February. The invocation of RICO in civil lawsuit actions taken opens a grand door to threaten the very existence of Wall Street. Its call will force extreme pressure on the USCongress to water down the provisions of RICO asset seizures, or to pave the way for ex-post-facto bond fraud forgiveness. The fraud has been a constant in US finance, including the USGovt. The states versus the federal government could be the ultimate battleground.

The scandal is going viral in my view, possibly to result in a global boycott of USTreasurys, but starting with a boycott and dumping of USAgency Mortgage Bonds. If the truth of premedicated fraud with concerted coverup is exposed, understood, and accepted, the USTreasury and USDollar will collapse within a month or two. The site of greatest risk is Fannie Mae, being the collector of toxic waste in bond securities. If mortgage bonds are declared worthless by the courts, a tipping point for a USTreasury Bond default could be progress of occurring. The bridge to chaos is the potential for Civil Disobedience, people refusing to make their mortgage payments. If hundreds of thousands of home loan holders consult with lawyers to demand proper title before continuing to pay on mortgages, the chaos could accelerate. In a year, perhaps 50% of people will not pay their mortgage!! This is a potential systemic failure lever event in the making. Never lose sight of the fact that the USFed holds $1.5 trillion in mortgage bonds. If they are declared worthless, the USFed dies!! That could be the inroad to USTreasury default!!

A sense of reassurance comes to see at least three State Supreme Courts take action. They have imposed a moratorium freeze on home foreclosures. The states have been obstructed in their Tenth Amendment initiatives to separate from the USGovt over the Wall Street fraud and federal bailouts. However, imposition of state rights on foreclosure gives them the avenue to cut some cords. The properties lie in the states, which have direct jurisdiction. The cords are from Wall Street firms though in the challenged foreclosure cases. Given the tight linkage between USGovt finance ministry control by Wall Street, the state challenges to the USGovt authority can be more successful through the Wall Street front. If the USCongress forgives $trillion fraud in full view, the states might declare some unique independence from the federal system, on the basis of federally sponsored racketeering.

The US press is beginning to catch wind of the depth of fraud. Ten days ago, the anchors were saying only 10% of the documents were faulty. Therefore, a moratorium seemed out of proportion. One week later, they were openly questioning whether 40% to 50% of the documents were faulty. The media avoids the word FRAUD and prefers the word ERRORS. Recall the denial in 2007 over the subprime mortgage episode, and claims the bond market damage was limited. That lesson has taught the analysts and press networks alike that the true problem is likely much bigger than the banks admit. The other lesson is that the private analysts and media pundits have learned big lessons on the ineptitude of the USFed itself to detect problems and crises in advance. It is not clear that court spectacles will take place. The spectacles will instead be public demonstrations that could easily turn violent.

The battle will be inside the USCongress over sweeping amnesty of Wall Street firms. No potential exists for out of court settlements on a meaningful scale unless they are done in class action cases. Watch Fannie Mae, both a fraud participant but a potential recipient of mortgage payments in doubt. The big banks might be forced to assign rights over to Fannie Mae in resolutions, like in exchange for forgiveness of broad committed fraud. The most egregious Robo-Signed document was the Patriot Act, which in fact few legislators read admist coercion and vivid palpable threats. Most USCongress Bills are not read, just signed, since their marching orders are contained within, after the banks or insurance firms or defense contractors or pharmas write the bill. The systemic failure that the Jackass has written about in the last three years is coming to center stage, with broad recognition, and acceptance in shock.

 

 

 

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Tento výňatek je publikován na základě souhlasu Jima Willieho, jehož Hat Trick Report mám předplacen. Výňatky publikuji formou citátů. Vybírám budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

 

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.

Hat Trick Letter – září 2010

Pondělí, Září 27th, 2010

Recese na obzoru? – Is Recession Near?

EL-ERIAN OF PIMCO RECOGNIZES THE MANY RECESSION SIGNALS WITHOUT USING THE DREADED WORD. HE SEEMS TO BE SAYING UNDER HIS BREATH THAT THE USFED AND ECONOMIC ADVISORS HAVE NO IDEA HOW TO SPUR GROWTH. HE ALWAYS STOPS SHORT OF URGING THE NATION TO RETURN TO INDUSTRIALIZATION AND STEP AWAY FROM ASSET BUBBLE PRIORITIES. $$$

Mohamed El-Erian, CEO of Pacific Investment Management Co (PIMCO) has cited alarming data that the USEconomy is slowing dangerously. He loses some credibility by mentioning that the recovery is losing momentum, since it never showed any signs of recovery, only response to a series of mindless clunky programs. He sees bad signals. Unemployment is high; consumer credit is in decline; small companies are being refused bank lines of credit. El-Erian openly states that bigger USGovt fiscal programs and additional USFed debt purchases are unlikely to spur a rebound. He said, “Throughout the summer, data signals have become more alarming. Current policy approaches here and abroad are unlikely to deliver a durable and robust US recovery. The equity markets are again under pressure while yields on Treasury bonds have collapsed, reflecting that market’s growing concerns about the weak economic outlook.” Plain talk by a bright financial professional. He expects home values to fall further as foreclosures increase. Housing is in extremely deep trouble. He cited in a research note a list of action items, such as tax reform, housing finance reform, infrastructure investment, support for education, job retraining, removal of barriers to interstate competition, and stronger social safety nets, which translates to a complete economic revamp, restructure, and rebuild.

 

Zlato – Gold

A COMMON MAJOR CURRENCY DECLINE RELATIVE TO GOLD SHOULD MAKE FOR SURPRISINGLY EERIE QUIET, WITHOUT ALARM SIGNAL. A TIGHT RANGE SHOULD BE MAINTAINED BETWEEN THE EQUALLY CRIPPLED USDOLLAR & EURO CURRENCYS. THE LOUD GONG ALARM WILL COME FROM GOLD & SILVER, WHICH WILL LARGELY BE IGNORED.

The Wall Street crooks knew that gold might have been the great single beneficiary to an EU bond crisis. So they engineered a selloff in the Euro currency that resulted in a USDollar runup. My belief is that Wall Street firms made a ton of money on the controlled demolition of the Euro, and its short cover rally on the upside also. Watch the EU sovereign debt story trotted out very soon. The US$ DX 80.5 support is not holding, but watch the Europeans step in soon. They will likely announce their own currency debasement initiative. No currency alarm bells would ring, if the ranges hold. Just jousting among allies.

The next chapter will not unfold like the last chapter, as Greece defaults and Spain occur. The next time, the USDollar might rise a little, but not anywhere as much, my forecasted response to renewed European crisis. The main problem is that the United States has a massive crisis ongoing and continuous. This next time GOLD & SILVER will be the beneficiary to currency strife, the global tremor in the monetary system. The paper currencies and their attached sovereign shackles of debt have ruined the approved legal tender format. Faith holds the monetary system and the currencies together, now broken. The financial world has awakened to this fact. Many misled misguided investors and analysts openly and perilously expect the world to hunker down into the USDollar as safe haven. They are tragically mistaken. In the forecasting arena, applying yesterday’s effect to a different world makes for gross errors. My forecast is for all currencies, including the USDollar, to suffer great damage in their purchase power and the all important confidence aspect, but to rotate in focused stories. The broken sovereign debt arena has done untold damage to the monetary system, a story not fully told. Gold & Silver will rise, but the currencies (USDollar, Euro, Pound Sterling, Yen) will experience eerie calm !!! Do not expect much upside movement even in the crude oil price. The lack of hedge activity in crude oil against the US$ will contribute to the strange eerie calm. THE WORLD IS UNDERGOING AN EARTHQUAKE TO SHATTER THE GLOBAL MONETARY SYSTEM, with rotating currency damage in the Competing Currency War. Its primary focal point for recognition is to be Gold & Silver. Watch squirming done by the major financial networks, Wall Street firms, and the spin doctors, who have been wrong about gold for a full decade.

THE GOLD SHORTFALL AT THE LONDON METALS EXCHANGE IS MASSIVE, UNREPORTED, AND SOON TO RESULT IN BREAKDOWN. THE EFFECT ON THE GOLD PRICE IS DIFFICULT TO ASSESS. IT SHOULD DOUBLE QUICKLY, THEN DOUBLE AGAIN.

 

Investoři opouští akciové fondy – Money Exodus From Equity Funds

WITNESS THE EXODUS OF MONEY, IN RESPONSE TO DIVERSE ILL WINDS. ANOTHER $5.4 BILLION WAS REMOVED FROM STOCK FUNDS INSIDE THE UNITED STATES. THE STRING OF WEEKS IN EXODUS CONTINUES. WORSE, ON A SINGLE WEEK, $7.1 BILLION WAS REMOVED FROM GLOBAL STOCK FUNDS. STOCK OUTFLOWS FROM THE USMARKETS CONTINUED FOR THE 17TH STRAIGHT WEEK. MONEY IS FLEEING FROM THE TOXIC BROKEN TINKERED CRIME RIDDEN FINANCIAL CENTERS. $$$

Investors withdrew a net $7.1 billion from equity funds tracked worldwide in the week ending August 25th, according to tracker EPFR Global. They put $5.2 billion into bond funds of many stripes. The United States and Europe are losing momentum. A net $5.4 billion was redeemed from US stock funds. Inflows into emerging nation stock markets were the lowest in 13 weeks, as their bond funds took in $1 billion. US bond funds drew $2.5 billion. European stock funds also posted net outflows, taking losses this calendar year to $15.7 billion. Inflows into emerging market bond funds continued for a 13th consecutive week, taking the annual total beyond 300% of the annual record set in 2005. The previous high in 2005 high was $9.7 billion. Global bond funds are in position to surpass the record inflow of $47 billion set in 2009. Great shifts in flow of funds is occurring.

The 17th consecutive weekly stock fund outflow was recorded in the United States. This is a major exodus, not reported, certainly on CNBC. Stock fund redemptions are actually accelerating. ICI reports $5.4 billion in stock fund outflows, fully 50% more than the previous week. Year to date outflows have now hit $54 billion in 2010, as ever more capital is going into fixed income instruments. The investment community is chasing bonds, the next bubble. The experts are calling them safer. In 2005 and 2006, mortgage bonds were considered safe.

 

Prodeje domů prudce padají – Housing Sales Crash

HOUSING SALES CRASH, AS THEY FALL 27% FROM JUNE TO JULY. THE TAX CREDIT INDUCEMENT HAS DEEPLY AFFECTED FINAL SALES. A CRASH IS IN PROGRESS. NATIONAL LEADERS ARE DELAYING ANY ACTION UNTIL AFTER THE NOVEMBER ELECTIONS. MOMENTUM WILL BE GREAT BY THEN. HOUSING PRICES ARE CERTAIN TO FALL ANOTHER 10% ACROSS THE NATION, MORE IN BUBBLY REGIONS. IT WILL RESULT IN A WAVE OF NEW INSOLVENCIES.

Exising US homes sales plummeted in July to the lowest pace in 15 years, in a resumption of the powerful economic recession. The report by the National Assn of Realtor has struck fear in the hearts of the most deluded bankers, who cling to the illusion of a sluggish recovery. The deterioration is historic. Existing home sales dropped a record 27.2% from June to an annual rate of 3.83 million units, the lowest since May 1995. A whiff of reality came from Michelle Meyer, senior economist at Bank of America Merrill Lynch in New York. She said, “This is a worrisome report. While it reflects the volatility caused by the end of the USGovt home buyer tax credits, it also indicates a deterioration in the underlying trend for housing demand. For the overall economy, the dangerous link to housing is home prices. This report signifies that home prices should fall considerably faster, which could tip the economy back into a recession. We are, however, not quite there yet, but this is a worrisome report.”

 

Situace vysokoškolských studentů – What College Students Are Realizing

COLLEGE STUDENTS ARE REALIZING DEEP DEBT BURDENS BEFORE ENTRY INTO THE JOB MARKET. THEY ARE BANKRUPT OUT OF THE EDUCATIONAL GATE. PREPARE FOR MAJOR CHANGES COMING WHERE YOUNG PEOPLE ESCHEW COLLEGE EDUCATIONS, OFFSET BY THE SHUTDOWN OF MANY UNIVERSITIES FROM HEAVY OPERATIONAL LOSSES. WITNESS ONE MORE FACET TO THE MARCH TO THE THIRD WORLD.

Graduating students are drowning in debt right out of the gate. US college students find themselves helpless to pay off educational costs. They march on the Road to Debt Perdition before paid salary checks. Over $830 billion is owed by US college students, with an astonishing $3000 added every second on the clock. For decades, the main financial baggage for Americans was credit card debt. Behold a shift, as college student debt has taken the lead #1 category. Students graduating in in the last few years have faced the worst job market in a generation. The majority will be unable to pay off the record debt. They will be crippled economic participants, unable to own a home. They will be forced to declare bankruptcy in droves.

 

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Tento výňatek je publikován na základě souhlasu Jima Willieho, jehož Hat Trick Report mám předplacen. Výňatky publikuji formou citátů. Vybírám budu takové informace, které nejsou běžně dostupné. Formátování textu (tučné, podtržené, kurzíva, velká písmena) je původní.

Více informací na goldenjackass.com

I subscribe to Hat Trick Report and gained permission to publish extracts on my web. Formatting of text (caps lock, bold…) is same as in original report. I pick up iinformation not available on main stream media.

For more information: goldenjackass.com

 

Upozorňuji čtenáře, že svolení Jima Willie se týká publikování pouze na webu www.pro-investory.cz. Kopírováním obsahu z těchto stránek by se ten, kdo kopíruje názor Jima Willie bez jeho svolení, dopustil porušení ochrany autorských práv Jima Willie.