Wednesday, December 16, 2009

Shadowstats' John Williams: Prepare For The Hyperinflationary Great Depression

http://www.zerohedge.com/article/shadowstats-john-williams-prepare-hyperinflationary-great-depression

TAKE THE TIIME TO READ THIS CAREFULLY

THE PLAN TO MAINTAIN ORDER IN TIMES OF CIVIL DISORDER

RAND CORPORATION PLAN TO CONTAIN CIVIL DISORDER
“Stability Police Force for the United States: Justification and Creating U.S. Capabilities”

"has been modeled on the Nazi German secret police forces organization Geheime Staatspolizei (Gestapo) meant to ‘control and demoralize’ any opposition to the state."

http://www.rand.org/pubs/monographs/2009/RAND_MG819.pdf

“Prepare For Rebellion”, Obama Orders US-Canadian Troops" TO SUPPRESS RIOTING DUE TO FINANCIAL COLLAPSE

http://www.whatdoesitmean.com/index1309.htm

EXCERPT:

"the European-US military alliance has authorized an ‘emergency request’ from President Obama to utilize American and Canadian NATO troops to put down what is expected to be a “rebellion” after the expected January, 2010 ‘declaration of bankruptcy’ by the State of California.

According to these reports, Obama’s fears of rebellion are due to the economic health of California (the United States largest State) after the 3rd largest US State, New York, declared a ‘fiscal emergency’ and refused to release to its cities and towns over $750 Million due them this past week with the Governor of New York, David Paterson, declaring “I can't say this enough: The state has run out of money.”

New York’s fiscal crisis, however, pales in comparison to California’s, where new economic data points to its expected 5-year budget deficit reaching the staggering amount of over $100 Billion which Russian economists warn will result in budget cuts so steep as to create ‘social chaos’ among this States 36 million citizens."

http://www.whatdoesitmean.com/index1309.htm

COLIN TWIGGS (AUSTRALIA) COMMENTS ON U.S DEBT GROWTH





US Debt Growth


The chart below shows growth in domestic non-financial debt (pink) up to the end of the third quarter. Financial debt is excluded because this would simply be double counting: the financial sector merely borrows from Peter and lends to Paul. We can see a sharp drop in the first half of 2008 as households and private corporations sold off assets and repaid debt in a falling market. The risk was a deflationary spiral as falling prices spark further sell-offs — which in turn cause further price falls.

The sharp spike in domestic non-financial debt in the second half of 2008 reflects governement attempts to stimulate the economy and prevent a deflationary spiral — funded by increased borrowing. The gap between the pink and blue lines reflects growth in government (federal and state) debt. Private sector debt, however, continued falling — despite a slowing of the decline in household debt.


Debt growth is important because it reveals the level of inflationary pressure in the economy. And inflationary pressure indicates future interest rate policy. Between 2003 and 2008 domestic debt grew between 2% and 2.5% per quarter, or 8% and 10% annually. Subtract real GDP growth (pick a number between 0 and 2%) and what you have left is inflationary pressure. This had little effect on consumer prices (other than oil and gas), but had a massive impact on the housing market — fueling the recent bubble.

The 2009 rise in Treasury debt has been offset by falling private sector borrowing — and rising government debt is unsustainable, without risking hyper-inflation. Overall domestic debt levels are likely to fall — and inflationary pressures ease as a result. Expect the Fed to maintain low interest rates until there is an up-turn in private investment and borrowing — which may be some way off.

With low interest rates and low inflation, downward pressure on the dollar is limited; and upward pressure on gold. Demand for gold is a bet on continued growth in government debt — fueling rising inflation, but the alternative scenario of low growth and higher taxes is just as likely.

Tuesday, December 15, 2009

SPAMMERS ATTACKING THIS BLOG

GT HAS INSTIGATED THE 'WORD VERIFICATION' TOOL TO PREVENT THE SPAMMERS
WHO HAVE BEEN POSTING ON THIS BLOG.

ALL SPAMMERS' POSTS WILL BE REMOVED IMMEDIATELY!

PLEASE BEAR WITH ME FOR A WHILE I RID US OF THESE NUISANCES.

GT

Monday, December 14, 2009

AMENDMENT 28...SHOULD BE PASSED, BUT WHAT CONGRESS WILL?

CREDIT TO GOLDMELTER FOR THIS

Amendment 28


Congress shall make no law that applies to the citizens of the United States that does not apply equally to the Senators and/or Representatives, and Congress shall make no law that applies to the Senators and/or Representatives that does not apply equally to the citizens of the United States .

DAN NORCINI'S COMMENTS ON LAST WEEK'S GOLD TRADING

Trader Dan Comments On This Week’s Action In The Continuous Commodity Index


Posted: Dec 12 2009 By: Dan Norcini Post Edited: December 12, 2009 at 1:05 pm

Dear Friends,

One of the fundamental inputs in a gold bull market is a steady rise in the price of commodities. While in a bull market, gold trades primarily as a currency, its association with the commodity world cannot be neglected in the sense that commodities become an asset class that is sought out by investors to inoculate themselves from the depreciation of the native currency. In general, if commodities are rising, it is a signal that:

1.) economic growth is strong, credit is relatively available and demand for underlying commodities is therefore robust resulting in rising prices across the board and/or

2.) confidence in paper assets is waning and investors are seeking wealth preservation in things tangible

We can see from the price chart of the Continuous Commodity Index that the former was the case prior to the crash in June 2008. The economy was vibrant, (we all now know that it was a bubble due to easy credit) but there was also a currency component to all of this as the US Dollar made an all time low prior to the bust. In other words, both of the above factors were in play. The result was a rising gold price.

However, after the credit crunch and associated meltdown occurred, the commodity class in general sold off sharply (the inverse of #1 above) while the Dollar rallied as leveraged carry trades were unwound. Investors sold off everything to raise cash to meet margin calls and deleverage, including gold. Gold too sold off for a season.

Once the Fed announced its Quantitative Easing program guaranteeing insanely low interest rates, factor # 2 came into play with astute investors rushing into tangible assets to shelter their wealth from the confiscatory effects of Central Bank currency debauchment activity. Commodities became sought out not because of a robust economy, but rather as an asset class to preserve wealth.

The result has been commodities regaining half of their losses from the initial bursting of the bubble that began last summer. Gold has once again rallied sharply, this time making yet another all time high in nominal terms as the Dollar also moved lower.

This chart therefore becomes significant in telling us the direction that gold prices will take moving forward. For the deflationists to be proven correct, this chart will need to break down technically which would require both a move below the 400 level and a downturn in the rising moving average in which price moves below that average as it trends lower. AS you can clearly see, the moving average is trending higher and prices are above it. This signifies that the inflationists have the upper hand and their assessment is currently the correct one.

Until this chart reverses its positive technicals, those calling for a major top in gold are simply mistaken in their assessment and are attempting to impose their view on the markets rather than reading what the market itself is currently saying. That’s the problem with analysts and even traders who cannot let the market speak to them and get stuck in a losing trade because they refuse to acknowledge that they might be incorrect. In effect, they end up fighting the trend or the tape as we used to say.

As I mentioned in my midday comments yesterday, the entire commodity class did not move lower as a block today as would have normally been expected if a wholesale deleveraging trade was underway. More than half of the commodity world was higher today with the energy sector the weak leg along with the precious metals. That is why I continue to believe that this move lower in gold is merely a retracement in a bull move and not the end of the bull run.

FOR CHART GO TO: http://jsmineset.com/wp-content/uploads/2009/12/December1209-CCI.pdf