Hat Trick Letter – srpen 2010

honza admin29.8. 20100

US Dollar

THE USDOLLAR COLLAPSE IS LAID OUT WELL, WITH BOTH INFLATION AND DEFLATION FELT WITHIN CERTAIN DIFFERENT ASSET GROUPS. THE USECONOMIC RECESSION WILL BE THE FOCAL POINT. THE GROWTH OF DEBT, ABUSE OF THE PRINTING PRE$$ TO MONETIZE DEBTS, ENDLESS DECLINE OF MORTGAGE ASSETS TIED TO THE SINKING HOUSING CEMENT SLAB, LACK OF BOND FRAUD PROSECUTION, AND ENDLESS WAR WILL ERODE FOREIGN CONFIDENCE IN THE USDOLLAR. THEY WILL ABANDON IT. EXPECT A SUDDEN GLOBAL REACTION TO VOMIT THE USTREASURYS, LEAVING THE USGOVT ALONE IN ABUSING THE MONETARY PRESS. ENTER HYPER-INFLATION. ENTER THE THIRD WORLD.

For four decades, the USDollar has been the mainstay of foreign capital reserves, and often the standard from which to peg weak currencies. The Greenback has been sought by foreign corporations, foreign hotels, and taxi drivers the world over. Its former popularity has transformed into a curse controlled by hostile barbarians. Over time a glut of USTreasury Bond holdings in foreign central banks has been accumulated, while an unserviceable national debt grew into a domestic monster impossible to tame at home.

The United States no longer would receive the busloads of foreign capital needed to continue functioning. The foundation of the US debt machine is slowly disintegrating. Even without additional debt, the USGovt is exposed and vulnerable. In the last several years the government sector has expanded, the wars expanded and blessed as sacred, and consequently costs rose dangerously, while interest payments mount. The high borrowing cost potential is a very large reason why the 0% rate will perpetuate without end, or at least until a USTreasury default.

Leaving the nation completely reliant on a 70% service based system, the USDollar is almost the last homemade product America actually makes.

The United States will continue to see symptoms of both deflation and inflation, even simultaneously, as has been the case for years. Deflation in jobs, stocks, real estate, and wages. Inflation in energy, food, and commodities. This is the dreaded Jackass forecast, falling assets and rising cost structure. The USEconomy has become a Frankenstein monster with froth and deep aberration that has already turned on its citizens, rendering them poor. Job security and pensions are missing in action. At the heart of this nightmare is found the USDollar. Despite the fraudulent fiat nature, it is still a representation of a sovereign drive that blocks global power forces. The challenge to institutions seeking an alternative is to create a counter-balance force to those global powers. Ironically, after most US industry was shipped overseas, and the USEconomy stocking retail shelves with foreign made products, leaving the nation completely reliant on a 70% service based system, the USDollar is almost the last homemade product America actually makes. However, its production is from a Printing Pre$$, and its output kills domestic capital. The USDollar is fading with the Empire, and near outright collapse. Very little coverage has come in the financial news of the streak of nine weeks for the US$ decline, the longest consecutive weekly decline since 2004. The huge outflows from the US stock market, another streak of 14 straight weeks, indicates something big, something ugly, this way comes. The USDollar is falling at the same time as stocks, a dour deadly signal for the Greenback.

Čtyři velké státy USA jsou na pokraji krachu – Four Giant States Are On The Edge Of Bankrupty

FOUR GIANT STATES ARE ON THE EDGE OF BANKRUPTCY AND FAILURE. CALIFORNIA, NEW YORK, ILLINOIS, AND MICHIGAN ARE TOPPLING INTO FISCAL CHAOS. MOMENTUM IS MATCHED BY THE SPOTLIGHT OF FAILURE.

Four Giant US states have been teetering in insolvency for many months, but are on the doorstep of bankruptcy motions. Together the four big states comprise over 25% of the national GDP and are home to over 25% of its population. California is the 8th largest economy in the world.

A study produced by National League of Cities, the US Conference of Mayors, and the National Assn of Counties concluded that local governments plan massive job cut, as many services are reduced. Local governments are planning to cut 500 thousand jobs in 2010 and 2011. The cuts would represent 8.6% of their workforces from 2009 to 2011. The job losses are expected to rise beyond such magnitude in the following months.

Quantitative Easing 2

THE SLIDE INTO USECONOMIC RECESSION WILL ASSURE A RESUMED QUANTITATIVE EASING (QE2). THIS TIME, IT WILL BE PERVERSE, BROAD, INNOVATIVE, DESPERATE, AND CONTROVERSIAL AS IT ALTERS THE POLITICAL SPIRIT. IT WILL CHANGE THE NATION INTO A COLLECTIVIST STATE AND INVITE HYPER-INFLATION.

For only the first time in modern history has a recession taken hold after 18 months of near 0% official interest rates. In addition to a recession, what is being confirmed is systemic economic failure after $2 trillion was thrown at the credit crisis with no effect. The monetary stimulus does not work because the banking system is dead.

Banking leaders refuse to liquidate impaired and worthless credit assets on the bank balance sheets, since doing so would kill the big banks, extinguish their power, and remove them from control of the USGovt.

DEFLATION TALK IS INTENDED AS STRONG DISTRACTION FROM THE POWERFUL MONETARY INFLATION AT WORK, SOON TO INTENSIFY IN AN INVISIBLE MUSHROOM CLOUD. FALLING ASSET PRICES AND RISING COST STRUCTURE LAYS THE GROUNDWORK FOR A POWERFUL SECOND ROUND OF MONETARY INFLATION, CALLED QE2.

QE2 WILL BE MORE CANCEROUS THAN QE1, AS MONEY GROWTH WILL BE AWESOME AND INEFFECTIVE PROGRAMS WILL FLOURISH.

THE BANKERS ARE USING THE USTREASURY CARRY TRADE HEAVILY. THE END RESULT WILL BE A 2% LONG BOND YIELD AND A BUSTED USFED BALANCE SHEET. SO BERNANKE IS LEADING THE BANKERS BY A LEASH TO FOLLOW A COVERT QUANTITATIVE EASING PROGRAM. BANKS ARE NOT LENDING. INSTEAD THEY ARE PILING UP USTREASURYS AND USAGENCY MORTGAGE BONDS.

Jak je na tom bankovní systém USA – US Banking System Situation

THE I.M.F. BELIEVES THE UNITED STATES BANKING SYSTEM REQUIRES $76 BILLION IN CAPITAL INFUSION. THEY ARE OFF BY A FACTOR OF 3X AT LEAST. THEIR DATA DOES NOT SUPPORT THEIR OWN ESTIMATE. THEY OVERLOOK THE FANNIE MAE CESSPOOL.

THE F.D.I.C. REVEALED ITS TOTAL FORECAST OF 1000 BANKS TO FAIL BEFORE THIS CYCLE ENDS. BUT AN END IS NOT ASSURED. RESERVE RATIOS HAVE GONE NEGATIVE. THE USTREASURY CREDIT LINE MUST BE TAPPED AND SOON, ADDING TO THE FEDERAL DEFICIT VISIBLY.

Using nasty extortion techniques, like 13-fold increases in bank premiums and front loading of premiums (paid in advance), the FDIC has stumbled along with the appearance of floating in a solvent state. The financial bleeding continues unabated. Many of the smaller regional banks are failing, due to heavy losses in their commercial real estate loan portfolios.

Stress testy evropských bank – European Bank Stress Tests

EUROPEAN BANK STRESS TESTS WERE A CLUMSY FARCE. NATIONS ARE SLIDING INTO A DEFICIT TRAP WITH REMEDY. A HUGE STACK OF SOVEREIGN DEBT MUST BE REFINANCED IN THIS CALENDAR YEAR. DEBT DOWNGRADE THREATS CONTINUE. THE GREEK GOVT BOND YIELD IS WORSE THAN JUNE.

The European bank Stress Test was an equal farce and travesty to the American version. Some banks that passed the low hurdle criteria are insolvent and seeking claims. The process did not require that banks write down impaired assets. In the United Kingdom, fund asset manager M&Gm of Prudential harshly criticized the Stress Tests as being easy and using the wrong types of stress. The tests ignored the Basel III requirements on capital and liquidity, to be enforced by 2012. A gaggle of crippled banks pass the supposed tests, but they are failing the market’s funding test, since they cannot continue without government support. The Stress Test is an irrelevant distraction. The bigger European Stress Test comes later this year, conducted by the bond market. The banks in Europe’s most distressed nations must refinance $122 billion of bonds this year.

The problems in Europe are being signicantly under-estimated, starting with Spain. The nation has 4.645 million jobless, over half a million more than a year ago. Proposed austerity measures on top of a collapsed housing bubble accomplish nothing except distribute pain and job cuts.

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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.

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