Best of the Week
Most Popular
1.SNP Offers Labour Deadly Death Embrace Alliance, Holding England to Ransom, Destroy UK From Within - Nadeem_Walayat
2.Gold And Silver – Most Widely Used Currency In Western World? Stupidity - Michael_Noonan
3.Election Forecast 2015 - Coalition Economic Recovery vs Labour Collapse - Nadeem_Walayat
4.Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - Nadeem_Walayat
5.Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It - Mike_Shedlock
6.Leaders Debate Election 2015 - Natalie Bennett Green Party Convincing Anti-Austerity More Debt Argument - Nadeem_Walayat
7.Labour Economic Collapse vs Coalition Recovery - UK Election Forecast 2015 - Video - Nadeem_Walayat
8.China’s Stock Market Mania; How High can Red-chips Fly? - Gary_Dorsch
9.Gold and Misery, Strange Bedfellows - 31st Mar 15 - Dan_Norcini
10.Ed Miliband Debate Election 2015 Analysis - Labour Spending, Debt and Economic Collapse - Nadeem_Walayat
Last 5 days
Q1 Corporate Earnings Risky for Stocks - 17th Apr 15
US Stock Market Getting Scarier by the Day - 17th Apr 15
Stock Market Watershed Day - 17th Apr 15
Gold Price Has “Hallmarks Of Market That Is Bottoming” - 17th Apr 15
Chinese Stock Market - Men Go Mad in Herds - 17th Apr 15
Two Stocks Offering Investors High Yields and Profits - 17th Apr 15
Gold Price Has “Hallmarks Of Market That Is Bottoming” - 17th Apr 15
Chinese Stock Market - Men Go Mad in Herds - 17th Apr 15
Two Stocks Offering Investors High Yields and Profits - 17th Apr 15
King Dollar Hurting Stock Market Corporate Earnings! - 17th Apr 15
Production Declines Hide Bigger Crude Oil Storage Issues - 17th Apr 15
Top Three Takeaways From Today’s OPEC Crude Oil Report… and How You Can Profit - 17th Apr 15
How to Profit from Australia's Healthiest Biotech Stocks - 17th Apr 15
What Is Really Driving Gold Price? - 17th Apr 15
Will Ever More Boomers Selling Retirement Assets Change Investment Prices For Decades? - 16th Apr 15
Won't Be Contagion with 'Grexit' Greece Euro-zone Exit - 16th Apr 15
Sharp Decline in USD/CAD and Its Consequences - 16th Apr 15
Blackstone is like Apple, Google, Hermes, Boeing - 16th Apr 15
The Most Dangerous Financial Headline I've Seen Since the 2008 Crisis - 16th Apr 15
Is Legal Tax Avoidance Extinct in the UK? - 16th Apr 15
Why Russia Will Send More Troops to Central Asia - 16th Apr 15
More Thoughts on the Current Crude Oil Market - 16th Apr 15
U.S. Treasury Secretary Warns Greek Exit Will Cause Enormous Disruption and Hardship - 16th Apr 15
The Hottest New Place to Find Stock Dividend Income in Q2/2015 - 15th Apr 15
How to Escape the Pensions Squeeze - 15th Apr 15
Water Crisis Game Changing Water Revolution - 15th Apr 15
The Drying of California - Corporate Farms Control of Water - 15th Apr 15
OPEC Going Broke, Dumping U.S. Dollars. Is That Good Or Bad? - 15th Apr 15
OPEC Just Confirmed It’s Losing the Oil War - 15th Apr 15
Four Uranium Companies Poised to Profit from the Growth of Nuclear Power - 15th Apr 15
Stock Investing Tread Softly… and Carry a Big Risk-Management Calculator - 15th Apr 15
Crude Oil Price Technical Outlook - 15th Apr 15
Important Bitcoin Price Action - 15th Apr 15
UK House Prices, Immigration, Population Growth and Election Forecast 2015 - 15th Apr 15
Peter Schiff on U.S. Dollars, Drachmas and Debt - Video - 14th Apr 15
The Ultimate Middle East Dilemma: Time For Us To Stop Intervening? - 14th Apr 15
Greece Debt Default and Drachma By End of April? - 14th Apr 15
Coming to Terms With the American Empire - 14th Apr 15
The Ball is in the Stock Market Bulls Court - 14th Apr 15
Tech Stocks Bubble: Different this time? - 14th Apr 15
Stock Market Sixth Sense - 14th Apr 15
Separating Gold and Silver Stocks Saints from the Sinners - 14th Apr 15
Conservatives Bribe Labour Voters by Extending Right to Buy to Housing Association Tenants - 14th Apr 15
Stacking Silver = Simple Solution - 13th Apr 15
Why Markets Ignored Weaker Payrolls - 13th Apr 15
Tory Attack on Ed Milliband Backfires as Labour Takes Opinion Polls Lead - 13th Apr 15
A "Digitalized" Stock Profit Play Mr. Spock Would Love - 13th Apr 15
New Credit Crunch Underway: Can Recession Be Far Behind? - 13th Apr 15
Western Interest in Gold Continues to Decline - 13th Apr 15
Stock Markets Breaking Out Worldwide - Buy the Dips Ride the Trend - 13th Apr 15
Silver Price set up to get Whacked Again - 13th Apr 15
Gold Price Dome Cap, Fall Below $1000 Likely - 13th Apr 15
Stock Market Accumulation or Distribution - 13th Apr 15
BLS Economic Propaganda, Truth – The Cure for Cognitive Dissonance - 12th Apr 15
A Case for Monetary Independence - 12th Apr 15
Drought and the Failure of Big Government in California - 12th Apr 15
Stocks Bull Market Continues - 11th Apr 15
Why the American Consumer Will Never Be Back - 11th Apr 15
End Of Islam, Hinduism And Christianity And Rise Of The Age Of Humanism, Spirituality And The Universal God - Sanadhana Dharma - 11th Apr 15
Gold And Silver Nothing Of Substance Going On. Fiat “Dollar” Controlling? - 11th Apr 15
The Most Dangerous Financial Headline I’ve Seen Since 2008 - 11th Apr 15
Alibaba Pggybank Investment Will Make You a Millionaire - 11th Apr 15
Ghosts In The Machine - Population Growth vs Food Production - 11th Apr 15
Gold-Futures Short Covering Rally - 11th Apr 15
Is Bitcoin Price Going down Some More? - 11th Apr 15
Stock Market Pivotal Events - History is Fact - 10th Apr 15
Gold Price “Going Higher” and “A Big Buy Here” - 10th Apr 15
Oil Price - How Much Longer Can OPEC Hold Out? - 10th Apr 15
Euro-zone Crisis - Germany’s Trade Surplus Is a Problem - 10th Apr 15
U.S. Investors Face a Giant, Historic Stock Market Bubble - 10th Apr 15
Greece, Gold, The Death Of Paper Money And The Modern State - 10th Apr 15
Gold and Silver Expect Lower Prices Once Again - 10th Apr 15
How Easy Money Drives the Stock Market - 9th Apr 15
Who Owns the North Pole? - 9th Apr 15
The Tax Collector’s Puzzle - WAIT: Don't File Those Taxes Just Yet! - 9th Apr 15
Austrian Government to No Longer Guarantees Bank Deposits - 9th Apr 15
Buy Gold and Silver Stocks Before the Bear Goes into Hibernation - 9th Apr 15
EURUSD: Why Recent Ups and Downs Are NOT Random - 9th Apr 15
Five Total Wealth Stock Market Investing Principles to Use Today - 9th Apr 15
U.S. Hegemony and Dollar Threatened By New Chinese Bank - 9th Apr 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

US Historic Bubble

Monetary System In Ruin, Signals Of Systemic Collapse

Stock-Markets / Credit Crisis 2011 Sep 22, 2011 - 12:41 PM GMT

By: Jim_Willie_CB

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleWow!! The billboard signals of extreme crisis are overwhelming. Three years of near 0% with no recovery. A full year of ample USTreasury and mortgage bond monetization with no recovery. Tons of cash aid deliveries to the big US banks with no recovery. Some key corporate nationalizations with no recovery. Oodles of errant stimulus programs with no recovery. Some important misdirection in home loan aid initiatives with no recovery. The US Federal Reserve admits it can do nothing more as a recovery remains elusive. The USGovt is paralyzed by disguised fascist warmongers opposed by disguised marxist collectivists, but intent on maintaining the status quo among bank fraud. An approved accounting fraud directive is kept in place to present a picture of bank solvency. Intermediate credit markets have come to a standstill.


The US stock market is in tatters. The USTreasury Bond market is the only conventional rally at work. And with all these programs, developments, and events, the USEconomy moves toward a recession with relentless determination and purpose, In today's age of lying about price inflation by at least 5%, that means the recession is about to turn into a Minus 5% Recession after never exiting the recession recognized in 2009. The billboard messages are dire, ugly, dreadful, dangerous, and full of destruction, typical of systemic failure. Too bad the Keynesian textbooks do not have a chapter on banking system insolvency, or one quarter of the households living in negative equity, or central bank toxic paper pits, or global currency war, or confiscation of tyrant accounts. The ineffective monetary & fiscal policy has ushered in the nightmarish systemic failure. That is what is occurring.  

MANY DIRE MARQUEE MESSAGES

Big US banks remain insolvent. The claim is greater financial health versus 2008, but only because they grade their own balance sheet assets and shove much toxic paper to the USFed. As credit engines, they sputter. As USTBond carry trade mechanics, they hum along. Their REO home inventory is strangling them. DEBT DOWNGRADES TO BANK OF AMERICA, WELLS FARGO, AND CITIGROUP HAVE COME FINALLY.

Central bankers finally see the futility of attempting to recapitalize the giant insolvent hollow trees called the big banks. The banks are losing capital faster than they can take in new capital, either from gifts by central banks (toxic bond redemption) or secondary stock issuance (long gone opportunity). BIG BANK RECAPITALIZATION RECOGNIZED AS FUTILE.

The US housing market is stuck in quicksand. Low mortgage rates mean nothing to home loan applicants who must pass very strict FICA tests. They mean nothing to home loan applicants who must refinance their loans or default, suffering under the weight of negative home equity. RESUMED HOME PRICE DECLINE IN THE LAST FEW MONTHS DESPITE FALLING MORTGAGE RATES.

The USFed enjoys falling long-term rates since their credit assets rise in value. That makes the central bank look less broken. They cannot send back the so-called Excess Reserves to the big banks (actually Loan Loss Reserves) since the central bank would look more wrecked. USFED BALANCE SHEET WORTH OVER MINUS $1.3 TRILLION.

The Shadow Banking system requires $1 trillion per year in replenishment, as the bone marrow rapidly vanishes within the US banks. Mortgage bonds and asset backed financial products lead the way in colossal erosion on their balance sheets. QE3 PROGRAM NEEDED JUST TO AID THE FALLING CAPITAL IN THE GREAT DE-LEVERAGE PROCESS.

USGovt budget process has turned into tragic comedy in a powerful stalemate. The emphasis has been on spending austerity and management of the debt limit. The reality is that the limit has been reached again, probably breached. The reality is that renewed spending for urgent economic stimulus will overwhelm any budget prudence. A WORSE $2 TRILLION USGOVT DEFICIT SET FOR NEXT YEAR.

The US leaders have squandered time, money, and political capital. They have missed the opportunity for reform and remedy. Devotion to bank redemptions and avoidance of liquidation have wasted money. Vacant vapid stimulus programs have wasted time. The nation has run out of time. Breakdown and panic have begun in earnest. The political arena has a closed door toward well conceived actions. THE POLTICAL ARENA AS GIGANTIC OBSTRUCTION TO THE USECONOMY, WITH MASSIVE DEFICITS ACTING LIKE CLOTS.

The central bank franchise system is being recognized for its failure, ineptitude, helplessness. The system is saturated with debt. The solution to treat the excess of debt is to add to the debt levels and to let loose the dogs of monetary hyper-inflation. CENTRAL BANKS SEEN AS PART OF THE PROBLEM, MAKING CONDITIONS WORSE.

A bank run has begun in Europe, with epicenter in France. The land of France belongs among the PIGS nations, since the big French banks are the primary broken shepherd creditors for the PIGS. They hold more than all the other nations combined almost in Greek debt. They own huge levels Italian debt. Siemens and Lloyds have abandoned France, yanking money out. A BANK RUN IN FRANCE GATHERS SPEED TO MAKE A CRATER IN EUROPEAN BANKING SYSTEM.

China had been gobbling up PIGS sovereign debt bought at discount. They took a truckload from Greece and Portugal, in return for consideration on key conversions of assets or gold bullion. They are in talks with Italy. But they have a different treatment for France, pulling out of the currency market forward and swap contracts in trading lines for the benefit of French banks. China is angry about the European Union decisions against a market economy. CHINA HAS BECOME A PLAYER IN EUROPEAN BANKING TO BE RECKONED WITH.

The Competing Currency War spreads like wildfire, still not properly recognized, seen as isolated actions by central banks. Nations like Brazil and Switzerland suffer from a rising currency, as their export trade is damaged on higher prices. Rate hikes backfire. Nations whose currencies are falling have seen an associated steep decline in business investment and seizures in the interbank lending. Rate cuts do not address insolvency. ALL NATIONS LOSE IN THE CURRENCY WAR.

Central bankers met in Poland to address the worsening chronic global financial crisis. They agreed on nothing except they despise US Treasury Secy Geithner. The European bankers believe the Financial Stability Fund for bailouts is adequate, a very wrong view. THE EURO BANKERS FEEL HELPLESS LIKE THEIR AMERICAN COUNTERPARTS.

Grandiose aid to PIIGS nations failed to halt their momentum into the pits. A ripe $360 billion in collective aid failed to put these broken nations on a proper footing off cloven hoofs. The aid was actually bank aid to the Central European and London bankers. The key is the Poison Pills forced down the PIIGS throats in the pigpen. Now comes a string of sovereign debt downgrades, extending to Italy. NO REMEDY TO THE PIIGS NATIONS SINCE THE ENTIRE AID PROCESS IS MISDIRECTED.

The USFed does not comprehend the principles of capitalism. They believe that the USEconomy is driven by disposable cash in consumer hands, and by stock market investment trickle down. Economists and banking officials are ignoramuses one and all. The reliance upon Panhandle Doctrine for consumers and Parasite Doctrine for banks has killed the nation. THE UNITED STATES LOST ALL CONCEPT OF CAPITAL FORMATION.

The deep acceptance and tolerance of constant war and preoccupation with security has led to $2.5 trillion in squandered war costs and $600 billion in squandered security agency costs. The United States embrace of Fascism has killed the nation. HALF THE USGOVT DEBT FROM WAR, HALF THE USGOVT DEBT FOREIGN OWNED, AN ENTERPRISE DIRECTED AT DESTRUCTION.

The USDollar is losing its secure status of global reserve. The Chinese Yuan is expanding in bilateral trade accords and supporting currency swap facilities. The London bankers aid China in creating viable off-shore Yuan trading centers. Times are really bad when even Nigeria diversifies away from US$-based assets. THE CHINESE YUAN TO BE CONVERTIBLE IN A COUPLE YEARS AHEAD OF SCHEDULE, A GREAT CHALLENGE TO THE USDOLLAR.

Raids on foreign national accounts continue unabated. The funds in Egypt were taken ($60 billion) as London offered sanctuary, while Mubarek faces a bizarre court procedure for murder and theft. The funds in Libya were frozen ($90 billion) as the US, London, and Europe did confiscations through freeze, but give assurance that it will be returned when the stated 348 requirements are met, as in never. US & ANGLO BANKS SO DESPERATE FOR CASH THAT THEY TAKE IT FROM DESPOTS, AS NATIONS ARE DISRUPTED AND THE FIRE OF WAR IS LIT.

The entire system from numerous different corners attempts to translate the list of ailments into simple terms of confidence and volatility. The actual watchwords are insolvency and deterioration, with momentum gathering toward systemic collapse. The implication is that the monetary system is breaking down. THE CRITICAL CATCH PHRASE IS CONFIDENCE, THE MAIN REQUIREMENT TO A FIAT PAPER BASED MONETARY SYSTEM.

The interconnection of financial firms extends within continents and across the vast oceans to render them tied to the same global fate. If one big bank fails, or one nation fails, then the contagion will be rapid. GREECE PUSHED THE WESTERN BANKS TO THE EDGE, BUT ITALY AND FRANCE PUSH THEM OVER THE EDGE.

Attention has gathered on the corrupted accounting of the popular but tainted exchange traded Gold & Silver funds. The gold inventory is under scrutiny for usage in COMEX deliveries, enabled by questionable shorts to the GLD and SLV shares by its own custodians. The Bar Lists are regularly seen as erroneous and suspicious. THE BIGGEST GOLD & SILVER FUNDS ON THE DEFENSIVE, SOON TO FACE EITHER MASS EXITS OR HEAVY DISCOUNTS TO THE PRECIOUS METAL SPOT PRICES.

The central banks of Shanghai Coop Org (SCO) member states, observer states, and dialogue partners are almost all purchasing gold, overtly or covertly. Or else they are demanding the return of their gold bullion from the US & London centers. The latest demand was from Chavez of Venezuela. Russia is accumulating gold, shutting off its export. China is accumulating gold, making citizen ownership easier. SCO LEADERS IN RUSSIA & CHINA ORCHESTRATE A POLICY TO ACCUMULATE GOLD AND PRESSURE THE WEST.

The rally to ruin is in the USTreasury Bond market. Despite the downgrade slapped on the USGovt debt by Standard & Poors, the long-term bond yield has fallen well below the benchmark 2.0% level. It is under 1.8% today. The official government bond market is crowding out the business credit market. The end of the road is around 1.5%, at which point little if any profit potential will be perceived. The role of Interest Rate Swaps is critical, but not well understood to start a phony process that the public joins. The machete slices doled out to the saving community in puny interest yield is harsh and cruel. Gold will be seen as taking in diverted profits from USTreasury Bond proceeds. END OF USTREASURY CARRY TRADE IS NEAR, AS BIG BANKS TO BE FORCED TO FIND ANOTHER EASY MONEY RIGGED TABLE.

ENDURING GOLD CONSOLIDATION

The uptrend in the Gold chart is intact. A massive breakout is in a period of consolidation since August. Expect more USFed monetization purchase of USTreasury Bonds, a process that has not stopped. The main emphasis of the USFed and QE discussion is simple. They continue the debt monetization but have decided not to talk about it anymore, in an end to transparency. Expect more USGovt stimulus, as austerity is shoved aside. Expect $2 trillion in USGovt deficits next year, as revenues are on the decline and urgent new stimulus programs will be eventually passed. Gold rises from the ruin of the monetary system and elimination of all safe havens. People should not be discouraged by the relatively minor selloffs in Gold & Silver. The gold price is still at or above the uptrend line even after the minor panic on Thursday. Even at $1740, a hefty 12% gain in gold asset appreciation has been seen since the June $1550 price, for only one quarter in time. What a rout! What a distortion! What a joke! Climb aboard! When the storms pass and need for bank recapitalization occurs, the need for economic stimulus occurs, the need for more sovereign bond redemption occurs, the need for more debt monetization (new & rollover) occurs, the Gold price will fly past the $2000 mark.

Memories are indeed very poor and fleeting. The market slammed the Gold price in early May back down to $1500 during ambushes, yet in only four months new highs over $1900 were registered. History will repeat itself, but without the weak hands on the wagon train. They never learn, and neither do the nitwit Deflation Knuckleheads. They are consistently half blind. They were overrun by the gold train this summer, but maintain their arrogant erroneous views. Prepare for a massive Gold rally when the recapitalization, stimulus, redemption, and monetization comes forth in a very public manner. During the collapse underway, Gold & Silver will be among the very few assets standing. The USTreasurys eventually will be wanted by nobody except the USFed central bank. Their bid will be alone, leading to a USDollar symbolic of the failed monetary system. The USTBond will be in retreat from the 1.5% low point in yield, as foreign creditors will finally jump off the asset bubble zeppelin before it lights up in flames.

Few people know the story behind the Hindenburg. The United States denied supply of helium to Germany in a trade war, which resulted in the high risk usage of hydrogen. In parallel, foreign creditors will deny legitimate funding to the USTreasury Bond market, a process well along. The USGovt in turn has resorted to the high risk usage of direct monetary inflation, in the perverse debt monetization window. The investment community wants even more of it (hydrogen). History will repeat itself. Who could ever forget the New York Post headline after the death of Leonid Brezhnev during the Cold War? REDS BREZH DEAD! The next headlines could read: YANKS JIG UP!!

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

From subscribers and readers:

At least 30 recently on correct forecasts regarding the bailout parade, numerous nationalization deals such as for Fannie Mae and the grand Mortgage Rescue.

"When I initially read your writings, they provoked a wide range of emotions in me from fear and anger to outright laughter. Initially some of your predictions ranged from the ridiculous to impossible. Yet time and again, over the past five years, I have watched with incredulity as they came true. Your analysis contains cogent analysis that benefits from a solid network of private contacts coupled with your scouring of the internet for information."
   (PaulM in Missouri)

"Your analysis is absolutely superior to anything available out there. Like no other publication, yours places a premium on telling the truth and provides a true macro perspective with forecasts that are uncannily accurate. I eagerly await each month's issues and spend hours reading and studying them. Many times I go back and re-read the most current issue just make sure I did not miss anything the first time!"
   (DevM from Virginia)

"I think that your newsletter is brilliant. It will also be an excellent chronicle of these times for future researchers."
   (PeterC in England)

by Jim Willie CB
Editor of the “HAT TRICK LETTER”
Home: Golden Jackass website
Subscribe: Hat Trick Letter

Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com . For personal questions about subscriptions, contact him at JimWillieCB@aol.com

Jim Willie CB Archive

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Ken
23 Sep 11, 00:22
Predictions

Jim Willie also misses a few...

"Jim Willie: Gold and Silver Short Covering Has Begun, Silver to Pass $50 Before October"

8-3-11 http://silverdoctors.blogspot.com/2011/08/jim-willie-gold-and-silver-short.html


Paul_B
24 Sep 11, 04:23
No one's 100% right all the time

@Ken

Well, we are living in *very* volatile times and it's not October yet. In any event, forecasters only need to be right MOST of the time to be successful. Anyone who claims to be right the whole time is living in fantasy land.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014