Thursday, March 31, 2011

More Fantasy-Jobs From U.S. 'Recovery'

Jeff Nielson
30 March 2011
It becomes more and more difficult to discuss U.S. employment "statistics", since an ever greater percentage of what is presented is simply total fabrication. The U.S. Bureau of Labor Statistics (BLS) might as well abbreviate its name to "Bureau of LieS", as none of the reports it produces bear any resemblance to the real world.

To this mountain of fiction we can now add the "ADP" monthly-payrolls report. This statistic is supposed to be beyond manipulation, as its data-stream comes directly from the payrolls of U.S. employers. However, look at "the fine print" and we will see that its report represents the data of less than 1/6th of total employment.

When their reporting excludes 85% of the U.S. economy, it obviously becomes very easy to "stack the deck". As an easy example: the U.S. is (still) embroiled in two (and now three?) "wars". With the biggest war-machine in the history of the world, certainly more than 1/6th of the U.S. economy is devoted to simply servicing that war-machine.

Thus all that ADP Employment Services needed to do to create a "U.S. economic recovery" is to focus its reporting on U.S. companies which derive a substantial part of their revenues from the U.S. military - a very long list. Having established that this data-stream could have easily been skewed to the point of total irrelevance, the question then becomes: is there evidence of such fabrication?

Fortunately, there remain a few niches of data reporting in the U.S. economy which have not yet been completely "sterilized" by the U.S. government's propaganda-machine. When such data is depicted in the form of long-term charts, those charts paint an irrefutable picture of an economy mired not merely in a "recession", but one which is clearly experiencing a depression.

Let's start with the one measurement of the U.S. unemployment rate which is still in the same ballpark as real-world numbers: the "U6" measurement.

First let's look at the overall level. Current U.S. unemployment is about 16% - nearly double what the U.S. government pretends it to be. Note the tiny improvement from the worst level. The roughly 1% decline in this rate takes it back to where it was when the U.S. government claimed that the U.S. economy had "hit bottom".

Let me reiterate this: after two years of a supposed "economic recovery", even using the U.S. government's own data, we see that the unemployment rate has merely equaled the rate at the "bottom" of the so-called recession. Two years of supposed "job creation" has brought the U.S. economy to the same point it was at the so-called "bottom". Using the U.S. government's own data, there clearly never was a "recovery".

Let's move on to a few more pictures on U.S. employment/unemployment. If we look at "long-term unemployment" in the U.S., we see a chart much like the "U6" unemployment rate.

After two years of a supposed "economic recovery", we see U.S. long-term unemployment much, much worse than at any time since the Great Depression - and no indication of any "recovery".

Equally revealing is a chart on the employment "participation rate" among the U.S. population. As with all Western countries, we see a large climb in this figure which began moving significantly higher in the 1970's, reflecting the integration of large numbers of female workers into our economies.

As with many U.S. economic charts, this one "fell off a cliff" when the U.S. Greater Depression began in 2008, and despite two years of an "economic recovery", there has been absolutely no recovery. Participation rates have reverted to what was seen in the U.S. prior to the massive increase in female employment. The U.S. now has both genders wanting to work in an economy which is only supplying enough jobs for one gender.

The last of these employment charts shows the massive spike in the payment of unemployment benefits. Again we see a chart which duplicates the pattern seen in the other charts, but which is derived from a totally separate data-stream. The modest "improvement" here is derived solely from the expiration of benefits, and not from rising employment levels - and even after this "improvement", payment levels are worse than at any time in the U.S. in recorded history.

The only conclusion which can be drawn from the clear picture presented in these charts is that there has never been any "U.S. economic recovery", meaning that the ADP payroll-reports have become nothing but totally fictitious government propaganda (much like the BLS B.S.).

Naturally there will remain a large number of trusting 'sheep' out there, who steadfastly believe that their government would never lie to them, and thus are convinced I must be "cherry picking" my numbers in some sort of devious manner. My apologies to readers who have already seen the following chart a few times, but it provides the clearest picture of all.

As I pointed out previously, the tiny little "blip" indicates roughly when the U.S. government claims that the U.S. economy bottomed, while the steady climb in food stamp-usage since that time reflects the supposed "economic recovery". As with all of the employment charts, it is obvious that such a recovery never took place.

Like "The Boy Who Cried Wolf", the U.S. government has been lying about its employment data so much for so long, that even in the unlikely event that the U.S. economy did actually begin to produce positive employment gains, it's unlikely that any thinking adult will believe it.

The U.S. economy is mired in a worsening depression. Yet what is even more depressing is that the only "solution" which the U.S. government has come up with to deal with this economic catastrophe is to tell larger and larger lies. As the chart on food stamps clearly demonstrates, those lies are not putting food on the table for Americans.

Jeff Nielson

How and Why The Elite Destroyed 3 Tons of Silver Last Week

By Silver Shield, on March 30th, 2011

I wrote a month ago in an article called Silver Bullet and the Silver Shield, that silver is a vital commodity to our way of life. I stated that silver is a precious metal that is being trashed as an industrial metal. As a result, it is within years of becoming the first metal to become extinct according to the USGS. At some point the shortage is going to become so obvious, that people are going to rush to turn in their depreciating dollars for real silver money. That is just the monetary demand of silver, the industrial and strategic demand is another huge factor we should consider.

Corporations are going to secure stockpiles of this precious commodity so as not to cause any supply disruptions in their billion dollar a year operation. Take for example the $300+ billion Apple Computer. Apple Computer’s market cap rests upon the increased sales and production of computers. If every one of their $1,500 computers has a 1/10th of an ounce of silver in it, they will spare no expense to secure silver when it becomes hard to get.

The strategic demand is even more daunting. It has been about a week since the Empire attacked the Galactic Rebels in the desert world of Libya. Reports have already surfaced about the obscene costs of this “Kinetic Military Action.” In less than a week, this war has already cost Americans $600 million dollars. That is about $100 million a day for this “Action.” It is far cry from the estimated daily price tag of the $300 million a day Afghan war or the $700 million a day Iraq war.

Almost half of the cost ($269 million) has come from the 191 Tomahawk missiles that have been launched into Libya. I think it is extremely interesting to know that each Tomahawk has more than a monster box (500 oz.) of silver inside of each missile. Pure silver has the highest electrical and thermal conductivity of all metals. When there is a $1.5 million dollar missile is being produced to secure more oil for the Empire, the Elite will use only the best materials to ensure the best performing results.

So far the US has thrown 3 tons of silver at Libya just with the Tomahawk missiles. That silver is gone forever as it is blown to a million pieces. (Never mind the poor bastards at the at the other end of missile’s target.) If we added the 191 Tomahawks from this “Kinetic Military Action” to the 288 from Gulf War 1, the 325 used in Sebia and Iraq in 98, and the 725 launched in Gulf War 2 that is just over 800,000 ounces of silver or 25 tons of silver gone forever.

That is just from the Tomahawk missile program. What about all of the other weapons programs in the Empire’s trillion dollar a year arsenal? Every smart bomb, tank, helicopter, fighter jet, bomber, naval vessel, and sophisticated electronic computer has a certain amount of silver in it. As the world starts to become a more dangerous place for the Empire, more and more silver will be destroyed forever.

One aspect of this waste that most people don’t get, is that all of this waste is done purposefully by the Elite. War is the greatest way to destroy the productive energy of humanity. The Elite want to keep us in a perpetual state of war for many on

The Madness of a Lost Society 2: Final Warnings

Mike Maloney - Physical Precious Metals vs Precious Metal Mining Stocks

Jim Cramer the world's most famous Paper Bug buys Physical Silver

Third Largest Producer Of Silver Says Production Is Now "Totally Paralyzed" Following Week-Long Strike

From Zero Hedge:

In news that should move the precious metals market, we learn that the world's third largest producer of silver (as well as zinc and lead) has announced its production is now totally paralyzed. From Reuters: "A week-old strike at Bolivia's San Cristobal mine has totally paralyzed production and exports of silver, zinc and lead, a union leader said on Wednesday. San Cristobal is the world's third-largest producer of silver and the sixth-largest producer of zinc, according to Japan's Sumitomo Corp, which owns the mine." For those who recall basic central planning economics this means that silver should plunge immediately, and should react even more adversely on news that crude supplies in the US are surging. After all, oil supply demand is far more critical to silver price discovery than the actual supply of a metal that unlike gold, is used in various industrial and peacebringing applications (see Operation Odyssey Dawn).

Gold through $1,500 by year end as key drivers remain in place

GFMS CEO , Paul Walker discusses the Gold market with Mineweb's Geoff Candy.....listen here

Conversations with Doug Casey

Buying Silver and Avoiding the Sharks

From The Mogambo Guru:

I keep pounding, pounding, pounding the table that silver is the biggest bargain out there, for, at last count, a jillion reasons, and that anybody who does not buy silver Right Freaking Now (RFN) is making the mistake of a lifetime, and the family is all, like, “Will you please stop pounding the table? It is irritating and is making things spill, aside from the fact that we don’t have any money with which to buy silver, and you know that!” which devolved into a lengthy discussion about who among them was the most irritated with me and everything I say or do.

So, to make these idiots happy, I stopped pounding, losing a lot of my spark of emphasis in the process. It just wasn’t the same, and my breakfast cereal was getting soggy, too, so without using my trademark pounding to buttress my arguments, I decided to just let Jason Hommel, of the Silver Stock Report newsletter, highlight my “Buy silver or you are a moron!” theme with notices of a few serious delivery problems in the silver market, indicating shortages, to which he surmises that “the futures market is about to default on silver and gold deliveries. There is a growing market awareness that the banks have sold short over $200 billion to $400 billion in silver, while all the world’s silver mines only produce about $30 billion of silver annually.”

The lesson seems to be that there is shark-infested water everywhere, and “Market participants are now taking on the cornered banks, putting them into an epic short squeeze of having to deliver silver that does not exist in quantity even remotely compared to the amount of money that exists that can buy silver.”

Now, as a cynical, paranoid ordinary trader/investor kind of guy who has been around long enough to have been eaten by financial sharks a few times, I am sure that they exist, and even today, baby sharks nibble at me, eating me, bite by bite, taking 1.5% of assets in fees and expenses every freaking year!

On the other hand, I never thought that I could be on the side of the sharks, and prove that “what goes around comes around” to my advantage, for a change!

And the good news from a “buy silver and prosper from inflation, Pilgrim!” standpoint, inflation and money-inspired growth ain’t a-gonna stop, neither, as I was reading a article that brought up the Federal Reserve perhaps ending their long series of monetary stimulus programs one day soon.

It ain’t a-gonna be, because but “While the Fed hasn’t committed to the specific methods it will use to exit, or in what order, it has been releasing details about its progress in building new programs and expanding its ability to drain reserves.”

Making a little joke of this, I note that this is, of course, akin to the fire department buying fire extinguishers instead of putting out the fire, so that in the future, if they do decide to put out the fire, they will be able to put out the fire! Hahaha!

Of course, I know this is not a fair analogy, and it’s not very funny, either, despite my pathetic use of “Hahaha!” to try and convince you otherwise.

To try to correct that serious shortcoming, and to perhaps make it more apt, let me expand to say that first the volunteer firefighters would have to set a lot of houses on fire so that there would be both a demand for a permanent fire department paying high incomes to full-time employees, and there would be a big need for new housing to replace all the charred rubble, both seemingly stimulating the economy, but, alas, as the Austrian School of economics shows, not, although they end up accumulating a lot of fire extinguishers.

Okay, I can see that it’s more apt, but still not funny, and getting un-funnier all the time, a deplorable condition that will undoubtedly be made worse when I continue to expand the analogy to the corrupt city council counterfeiting money to pay the firefighters and themselves, and pay for that spiffy new firehouse and City Hall, and pay for all that shiny new government gear and programs, thus creating a continual addition of money to the economy that drives prices up, drives the riffraff like me out, and drives the economy into the toilet.

With a start, I recoiled in horror, showing what a wussy coward I am about inflation, as the analogy became all too frightening when it included the inflation in prices that an inflation in the money supply brings!

That was, however, not the actual part that made my eyes open wide and the skin on my head draw back in fear, although I must warn you that it doesn’t look that way when it happens, as I ruefully noted when the kids said to each other “Hey, look! Dad’s ears are wiggling!”

This, of course, started the predictable domino effect from, “Why do you need ears when you never hear anything we say?”, to “We keep saying that we need you to give us more money!”, to “You’re a cheap, horrible person!”, to “I hate you! I hate you! I hate you!”

No, the part that really, really REALLY scared me was when the Journal followed that up with the sentence “This includes increasing the number of its counterparties.” Gaaaahhhh!

It’s the idea of derivatives all over again! “Spreading the risk”! Yikes! Run for it! We’re Freaking Doomed (WFD)!

If you are NOT running in fear, then you are either stupid (and thus you cannot learn that you should be buying gold and silver when the Federal Reserve is creating so monstrously much money) or it means that you are smart (and thus you already have a lot of gold and silver).

It’s just that easy to distinguish between the two! Whee!

Wednesday, March 30, 2011

"Fukushima - Undoubtedly the biggest nuclear disaster since Chernobyl" - A.Gopalakrishnan

by on Mar 29, 2011

Newsclick interviews Dr. A. Gopalakrishnan, former chairman of the Atomic Energy Regulatory Board in India on March 24, 2011. He speaks about the primary reasons for the continuing disaster in the Fukushima reactors following a major earthquake and tsunami in Japan.

Japan on "maximum alert" as plutonium found in soil near nuclear plant

From the UK Telegraph:

Japan's prime minister has declared a state of "maximum alert" over the country's nuclear disaster after highly toxic plutonium was found to have leaked into the soil from the plant.

Naoto Kan told the Japanese parliament that the combined 9.0 magnitude earthquake, tsunami and nuclear accident were the "biggest crises" in decades.

"From now on, we will continue to handle it in a state of maximum alert," he said.

Mr Kan's comments came after the Tokyo Electric Power Company (Tepco), the operators of the Fukushima plant, confirmed that plutonium had been detected for the first time in two out of five soil samples.

Tepco said the levels of plutonium were not harmful to human health, but experts said the discovery raised concerns that the reactor's containment mechanism had been breached.

"Plutonium is a substance that's emitted when the temperature is high, and it's also heavy and so does not leak out easily," said Hidehiko Nishiyama, deputy director of Japan's Nuclear and Industrial Safety Agency.

"So if plutonium has emerged from the reactor, that tells us something about the damage to the fuel. And if it has breached the original containment system, it underlines the gravity and seriousness of this accident."

It is thought that some of the plutonium may have entered the soil from spent fuel rods at the plant or due to damage to reactor Number 3, the only one using the substance in its fuel mix.

Used in nuclear bombs and a by-product of atomic reactions, plutonium is an extremely dangerous radioactive on

US workers finally compete with workers in India & China by working for FREE

I have opined on this blog before about "the race to the bottom" in global wages and conditions as globalization allows billions of workers to compete and back stab each other to gain paid work. But it seems that US workers have gone for broke and are now willing to work for free.

Not even in Zimbabwe, at the height of the hyperinflation, were even dedicated hospital staff willing to go to work once the bus fare exceeded their wages, yet in the US the economic conditions seem so bad that workers are willing to make a loss just to say they have a job.

How can you eat "self-esteem"?

FORTUNE -- With nearly 14 million unemployed workers in America, many have gotten so desperate that they're willing to work for free. While some businesses are wary of the legal risks and supervision such an arrangement might require, companies that have used free workers say it can pay off when done right.

"People who work for free are far hungrier than anybody who has a salary, so they're going to outperform, they're going to try to please, they're going to be creative," says Kelly Fallis, chief executive of Remote Stylist, a Toronto and New York-based startup that provides Web-based interior design services. "From a cost savings perspective, to get something off the ground, it's huge. Especially if you're a small business."

In the last three years, Fallis has used about 50 unpaid interns for duties in marketing, editorial, advertising, sales, account management and public relations. She's convinced it's the wave of the future in human resources. "Ten years from now, this is going to be the norm," she says.

Why do people work for free?

The benefit unpaid labor offers to a business is pretty clear, but it can also give employees needed experience, a reference letter or even a self-esteem boost in a depressing economy.

Cassie Johnson, a 27-year old in San Marcos, Calif., lost her job as an enrollment adviser for an online university in 2009 and was receiving unemployment benefits for a year before finding an assistant manager position at a Starbucks (SBUX) that's so far from her home she spends most of her pay on gas. Since starting a public relations internship in February, she feels a renewed sense of purpose.

"I'm learning a lot and I feel really good about it. I'm happy. I feel relevant. I'm not making any money, so it's tough, but I feel it's setting me up for a career," Johnson says. "I only have $1.50 left in my checking account right now but I'm living with my boyfriend and he's been really good about supporting me." on

Yemen update

Bahrain update

CrossTalk on Libya: Humanitarian Bombs?

From: RussiaToday | Mar 28, 2011

On this edition of CrossTalk with Peter Lavelle: Will NATO prove to be a true liberator of the Libyan people? Will it bring peace to the desperate state and will it win the recognition of the whole international community? Will the West finally find itself on the right side of history? Or will it sink into another quagmire? CT-ing with Eric Garris, Islam Qasem and Ezzedine Choukri Fishere.

Libyan update

Syrian protests update

Odyssey Hunts Nazi-Torpedoed Ship’s $260 Million of Silver

From Bloomberg:

Odyssey Marine Exploration Inc. (OMEX), the ocean salvager featured in the Discovery Channel series “Treasure Quest,” is trying to recover silver valued at as much as $260 million by October from a ship torpedoed by a Nazi submarine in 1941.

The Tampa, Florida-based company was awarded a contract by the U.K. government last year that would allow it to keep about 80 percent of the bullion treasure of the S.S. Gairsoppa, a cargo steamer sunk by a German U-boat off the Irish coast. There’s an estimated 4 million to 7 million ounces at the shipwreck site, according to Odyssey President and Chief Operating Officer Mark Gordon.

“This is the year we’re going to go out and find it,” Gordon said in an interview. “The total survey and recovery costs will be a fraction of the value. You’d be looking at single-digit millions of dollars for the budget.”

Odyssey aims to salvage Gairsoppa’s cargo from beneath as much as 14,000 feet (4,270 meters) of water amid surging prices for silver, which has more than doubled in the past year, and gold, which rose to a record last week. The company recovered 17 tons of gold and silver coins in 2007 in an Atlantic Ocean operation it codenamed Black Swan. It also plans to hoist treasure from at least five other ships, including HMS Sussex, which sank in 1694 near Gibraltar and may hold gold that the New York Times has estimated is valued at as much as $4 on

Americans feather nests with silver Eagles

From Precious Metals News:

At Stack’s, a coin dealer in midtown Manhattan, the shop floor is filled with glass cases displaying coins and banknotes ranging from recently-minted pieces to 18th-century antiques. These days, however, customers mainly have eyes for one product: the silver American Eagle.

“Silver’s hot. People want it. People don’t want to have money in the bank,” says Eric Streiner, the shop’s manager. Buyers include everyone from “business executives to lunatics”, he adds.

The same story is being repeated across the US. Silver has become the favoured investment of disaffected Americans. The recent wave of disenchantment with the economic stewardship of the country’s institutions – from the government and the Federal Reserve to big Wall Street banks – has sent demand skyrocketing.

With that, the price of silver has more than doubled since the Fed first raised the prospect of a second round of quantitative easing – effectively, printing money to prop up the economy – in late August. That has made it the best performing precious metal, with nominal prices rising to levels only seen during the height of the Hunt brothers’ famous squeeze in 1980.

Daniel Brebner, commodities analyst at Deutsche Bank, says silver investors “don’t like where their country is going – particularly in the US but elsewhere as well.

“They are looking at other political alternatives, but they’re also looking at diversifying away from conventional assets they’ve held in the past.”

Nowhere is the unbridled enthusiasm for silver clearer than at the level of coins and small bars – the type of product most accessible to smaller investors. All the world’s top mints are selling silver coins at record pace: the US Mint has sold 12.4m ounces of silver American Eagles in the first three months of the year – equivalent to about 6 per cent of quarterly global mine output.

David Madge, head of bullion sales at the Royal Canadian Mint, says sales of silver Maple Leaf coins “remain robust with demand still exceeding our supply”.

The level of demand means dealers are sold out of popular products. “Anything you can get right now you can sell,” says Michael Kramer, president of Manfra, Tordella & Brookes, a New York-based coin dealership. “If I want to, I can sell my [weekly] allocation in five minutes.”

The level of demand for products such as 100 ounce bars and silver American Eagles has caused premiums – the cost of particular products over and above the value of the metal they contain – to jump to the highest levels since 2008, dealers said.

Silver has even outshone gold, which shares its perceived quality as a hedge against the debasement of paper currencies. In part that is because the grey metal also has industrial characteristics, which mean it has benefited from the global economic rebound. More important, dealers say, is the perception that silver, with its lower headline price, may have further to rally than gold.

Jonathan Potts, managing director of Fidelitrade, another US bullion dealer, draws a parallel with equity markets, where some investors prefer to invest in cheaper stocks. “We’re seeing people from all walks of life, all income levels,” he says.

“A lot of people believe that silver has a lot more upside potential than gold right now.”

Industrial boom

It is not just investors that are driving silver demand higher, writes Jack Farchy.

Industrial use of silver, in everything from electrical circuits in mobile phones to plasma television screens, has risen sharply, accounting for more than half of total silver consumption.

According to forecasts from consultancy GFMS this week, industrial silver demand is set to rise 37 per cent between 2010 and 2015, with much of that coming from the use of silver in solar power cells, which is expected to double from 2010 levels.

Disenchanted Americans are not the only driver for silver’s rally. Consumption in other countries has also jumped, led by China and India. Over the past three years China has shifted from being a net exporter to a significant importer of the metal.

Nonetheless, many traders confess to bafflement at the strength of the grey metal, pointing to rising supply from mine production and growing scrap levels as factors that ought to damp price gains.

Some investors appear to be equally wary. According to Edel Tully of UBS, “while many market participants are impressed by silver’s industrial and retail demand, and are concerned about physical shortages, another portion believe there is too much speculative noise in the market right now”.

But for every investor or analyst concerned about silver’s fundamentals, there are plenty of others calling for much higher prices.

Mr Brebner of Deutsche Bank is expecting silver to average a record $50 a troy ounce next year, compared with current prices of $37. Others are even more bullish, calling for the ratio of gold to silver prices to fall in line with the relative abundance of the two metals in the earth’s crust – about 19:1 – or for silver to surpass its inflation-adjusted high of 1980, which stands at about $150.

For the time being, at least, the silver bugs are making more noise than their detractors.

On a recent call to discuss the results of Pan American Silver, the fourth-largest miner, one private investor’s comment was less a question than a rallying call: “With the entire United States of America, the states going bankrupt, which means they’ll have to unleash . . . QE3 because the Federal Reserve will not allow them to go [bankrupt], and [with] silver [above] $35, the sky is the limit.”

Jim Rickards - QE forever

Jim Rickards, Senior Managing Director for Market Intelligence at Omnis Inc, discusses the ongoing QE program, oil and Japan with Eric King of King World News.....listen here

Gerald Celente: Libya civil war none of US business

From: RTAmerica | Mar 25, 2011

There are increasing calls for more democracy and to end corruption throughout Africa and the Middle East, but the US targeted Libya to make a statement. Gerald Celente, the director of the Trends Research Institute says this is a chilling example of US hypocrisy. Killing people with bombs to solve the humanitarian crisis is absurd and ironic he notes. In addition, Americans are suffering from high unemployment and calling for cuts to government spending, yet the Pentagon is blowing away billions per week bombing Libya

Keiser Report: Pirates of the Digital Age

by on Mar 29, 2011

This time Max Keiser and co-host, Stacy Herbert, report on well-armed television presenters, bankrupt crusaders and a reign of terror in central banking. In the second half of the show, Max talks to Isa Blumi about Yemen, Libya and the militarization of borders.

Raw gold shortage in China

Inside Story: UK march for an alternative

Tuesday, March 29, 2011

Must watch video - End of America

World's Best News Show - Rap News

From: thejuicemedia | Mar 24, 2011
Rap News, Episode 7: It's 2011 and amid a flurry of political leaks and revelations, revolutions have rolled across North Africa and The Middle East. Join your host Robert Foster for long overdue analysis of these events, asking the question that's on everyone's lips -- where will revolution spark next? But when a news flash comes in from a special embedded correspondent, the episode takes an unprecedented turn, as that very question is answered in dramatic fashion. How will the world treat the latest courageous country to throw off the yoke of oppression? Is any cow sacred in this time of massive upheaval? Can there be any doubt that History Is Happening?

Buying Silver to Combat the Vampire Craze

From The Mogambo Guru:

Dominic Frisby of Money Morning newsletter quotes Nick Laird of Sharelynx as saying that the situation in silver is such that “since 1950, almost 925,000 tonnes have gone into demand with 570,000 tonnes of this having come from production. This leaves a shortfall of 350,000 tonnes, which has come from central bank sales, stockpiles and scrap. This deficit equals approximately 16 years of production.”

Even more surprisingly, as statistics go, the deficit in silver “is equal to the entire global production of silver in 1982!” which you’ll notice is already punctuated with an exclamation point, as everybody can see the exceptional, startling, scary nature of the statistic!

Jeff Clark, in his essay “How Much More Demand Can Silver Handle?” here at The Daily Reckoning, notes that “The numbers for silver demand are starting to make some market-watchers nervous. The US Mint sold over 6.4 million silver Eagles in January, more than any other month since the coin’s introduction in 1986.”

Well, playing the devil’s advocate, I say that “Maybe it’s because economic things are worse than at anytime since 1986, and there are so many more vampire-related things in the popular media than there were in 1986, so it is only natural to expect more people to be buying silver!”

Mr. Clark, obviously having been instructed to ignore me, ignores me, and goes on to trump my stupid theory with the awesome fact that “China’s net imports of silver quadrupled in 2010, to 122.6 million ounces, roughly 13.7% of global production.”

Already “mine production can’t meet worldwide demand,” and since I never hear of central banks dis-hoarding silver, nor of any stockpiles of silver being drawn down, maybe that is why he says, “the only way demand gets fulfilled is from scrap supply.”

As to what this means in precise dollars and cents, I don’t know, but he may be giving us a hint when he reminds us to “Remember that silver rose over 3,646% from trough to peak in the last precious metals bull market; it’s up about 630% in our current run. A return matching the 1970s advance would push the price to $152.”

From $33 an ounce to $152 an ounce? Wow! That seems like investing at its best, while the truth is that the gains in silver just get better from there, because the evil Federal Reserve is going to keep creating more and more money from there, which explains why I was spending more and more time alone in the Mogambo Big, Bad Bunker (MBBB) a few weeks ago, nervously watching the Federal Reserve creating another $28 billion in credit, which means that the Fed is creating more inflation in prices, which means that the time when people get desperate is not far away.

And this $28 billion in bank credit turned, seemingly magically but actually just a coincidental accounting thing, into $26 billion in cash with which to buy $26 billion in government debt! All in One Freaking Week (OFW)! Astounding!

The reason I bring this up is because it means, We’re Freaking Doomed (WFD) to die a horrible, horrible economic death because of inflation in prices that must necessarily result from all this creation of new money, which is obvious once you strip away all the confusing jargon, acres of spreadsheets and idiot editors rejecting your work with caustic comments like, “Utter trash” and, “Thank you for your recent submission. However, we have no present need for worthless ramblings of a paranoid lunatic.”

Paranoid lunatic, eh? Ha! Sharp Junior Mogambo Rangers (JMRs) are instantly on alert at a “dog that didn’t bark” – as in this case the sentence fragment “to die a horrible, horrible economic death because of inflation in prices that must necessarily result from all this creation of new money” did not end with an exclamation point, or two, or three, as would seem to be indicated.

The reason is that the long-forecasted inflation, which the use of an exclamation point would indicate as an impending calamity, is not only impending, but it is here, which does merit an exclamation point thusly!

I involuntarily looked around the bunker in a kind of scared paranoia when I read The 5-Minute Forecast boiling it down to, “Wholesale prices jumped 0.8% in January, according to the Bureau of Labor Statistics. The Producer Price Index has now jumped 3% over the last four months. And no, that’s not an annualized figure.”

Suddenly feeling nervous and paranoid again, The 5 continues, “Note that the PPI headline number is for ‘finished goods’ – stuff that’s ready to be sold direct to consumers. In the category of ‘crude goods,’ the figures are far worse – up 3.3% in January, and up a staggering 15.8% over the last four months.”

This is the ugly start of the price inflation horror that results from the horror of the Federal Reserve creating so excessively much money, and if ever there were a clearer signal to buy gold and silver with the last of your Federal Reserve Note money, I never heard of it.

And I am a guy who has heard many, many things over his lifetime that will curl your hair, or, if already curled, straighten, and I am not even talking about any of that REALLY scary stuff about genetic mutants being manufactured for the Pentagon (which is under control of UFOs from outer space) that are computer-controlled and can shoot laser beams (“zzzzt!”) out of their eyes.

And if that last stuff turns out to be true, too, then it will be just one more reason, on top of the other thousands of reasons, to buy gold, silver and oil, and which would perhaps add just that little bit extra jollity to your jaunty step as you realize, as you walk along, “Whee! This investing stuff is easy!”

Gold Replacing Dollar as World’s Reserve Currency?

From CNBC:

$105 per barrel oil. Cotton prices at record levels. Food prices at 2008 highs. Typically, such commodity price increases would send central banks running to the U.S. Dollar to secure the value of their savings. After all, the dollar has been the reserve currency since World War I.

But not this time.

Central banks are shedding dollars, reducing their holdings by about $9 billion in previous quarter, according to Nomura Securities’ Jens Nordvig, global head of G10 FX Strategy.

What are they buying instead? Gold

The yellow metal hit a fresh record high this morning, while the dollar index dropped to a 15-month low. The news had Fast Money’s Brian Kelly looking to add more gold and silver longs to his portfolio Thursday morning.

“What is working is gold, silver and oil” said Kanundrum Capital’s Kelly. “I wish I had more.”

Japan nuclear update - Latest helicopter footage of Fukushima

Tanks With NBC Air Filters Sent To Destroyed Reactors

By Bob Nichols
(San Francisco) -- The Japanese military has deployed two Type 74 Main Battle Tanks to the destroyed Fukushima Daiichi GE nuclear reactors. The 80,000 lb, or 36,363 kg, Type 74 Tanks are equipped with bull dozer blades and can be equipped with Nuclear, Biological and Chemical Warfare Protective kits.
The 720 HP tanks are expected to clear away rubble from the destroyed reactors; including thousands of tons of burning, highly radioactive old reactor cores stored on site. Internationally known Physicist Dr Paolo Scampa has calculated that 70 Billion Lethal Doses of radioactive particles have been released from the Fukushima Daiichi six reactor site. That is enough lethal radiation to kill everyone on Planet Earth 10 times over.
Dr Michio Kaku, a world famous physicist has recommended that the Japanese military implement the "Chernobyl Option" to entomb the four out of control reactors in Boron and Concrete. The Boron kills the Neutron life blood of the reactor cores.
Type 74 Tanks To Be Used For N-Plant Cleanup
Type 74 Main Battle Tank with dozer attachment. Photo via
According to the Daily Yomiuri, the GSDF is sending two Type 74 main battle tanks to the Fukushima Daiichi reactor to help clean up rubble and debris from the earthquake, tsunami, and explosions at the reactor site. The rubble and debris are hampering emergency efforts to repair the reactors. The GSDF is using tanks instead of bulldozers because the thick steel hull of the Type 74 is effective at blocking some radiation from the crew. The tanks also have NBC air filtration systems.
The article says that the tanks will be sent from Camp Komakado, which according to Wikipedia is the headquarters of the 1st Tank Battalion, as well as the 1st Armored Training Unit. Other sources on the Internet indicate that one Type 74 per tank company is equipped with a dozer blade, in which case the 1st Tank Battalion probably has three such tanks on hand.
Kyodo News Agency has a picture of one of the tanks chained to a tank transporter.
Type 74 with dozer attachment. Kyodo News Agency.

Fed Will Release Bank Loan Data

From Bloomberg:

The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view.

The justices today left intact a court order that gives the Fed five days to release the records, sought by Bloomberg News’s parent company, Bloomberg LP. The Clearing House Association LLC, a group of the nation’s largest commercial banks, had asked the Supreme Court to intervene.

“The board will fully comply with the court’s decision and is preparing to make the information available,” said David Skidmore, a spokesman for the Fed.

The order marks the first time a court has forced the Fed to reveal the names of banks that borrowed from its oldest lending program, the 98-year-old discount window. The disclosures, together with details of six bailout programs released by the central bank in December under a congressional mandate, would give taxpayers insight into the Fed’s unprecedented $3.5 trillion effort to stem the 2008 financial panic.

“I can’t recall that the Fed was ever sued and forced to release information” in its 98-year history, said Allan H. Meltzer, the author of three books on the U.S central bank and a professor at Carnegie Mellon University in on

Ron Paul Introduces Free Competition in Currency Act of 2011

From Coin News:

Congressman Ron Paul [R-TX] is seeking to end all taxes charged by federal, state and local governments on coins and bullion.

Rep. Paul introduced the Free Competition in Currency Act of 2011, H.R. 1098, in the United States House of Representatives on March 15, 2011.

The move to end the taxation is one of three parts to the bill and marks a continuation of an effort by Paul that can be traced back to previous Congressional sessions. Those attempts stalled, leaving Ron Paul little choice but to re-introduce the measures in the latest session of Congress.

If passed, the Free Competition in Currency Act would eliminate capital gains taxes on gold and silver coins which are levied at rates of up to 35% for short term and 28% for long-term. Also eliminated would be sales taxes charged by state and local governments on coin and bullion on

Silver Price Suppression: How, Why and Effect

By Rob Kirby:

This paper is written as a response to market observers who opine, “how can the price of precious metals be suppressed when their prices have empirically gone up 4 fold and more over the past 10 years?”

The following graph depicts the price performance of silver over the course of 2010, paying special attention to the change in silver derivatives positions at both J.P. Morgue and HSBC:

The U.S. Office of the Comptroller of the Currency [OCC] publishes quarterly data showing the change in aggregate derivatives data of reporting Commercial Banks:

When we juxtapose Q3/2010 precious metals aggregates against Q4/2010 – we can see that J.P. Morgue and HSBC cumulatively added roughly 4 billion in silver derivatives. We know these institutions are “short” because the Commitment of Traders Report [COTS] published weekly by the CFTC have perpetually shown the “Commercials” category to be short. J.P. Morgue and HSBC are “Commercials”.

What Could Have, Should Have But Wasn’t Allowed to Happen [thank you CFTC]:

While the price of silver did rise in Q4/2010 – in the absence of J.P. Morgue and HSBC piling on suppressive, paper, future short sales – the price rise would have undoubtedly been much steeper.

Conclusions: The price rise of silver in Q4/2010 would have been much steeper had J.P. Morgue and HSBC not “shellacked” the market with an additional, cumulative 4 billion in price-suppressive, paper short sales. Had these agents of the U.S. Federal Reserve not undertaken this market manipulation – the price of silver would have soared much higher, making the already weak U.S. Dollar look even more unattractive as a prudent vehicle for countries seeking diversification/safety of their reserve positions.

The CFTC is “owned” by the banks they are supposed to regulate. Instead of ensuring the sanctity of our capital markets, enforcing meaningful position limits, they aid-and-abet the banks in their price rigging [undoubtedly in the name of fiat preservation / National Security].

What is really occurring in precious metals-ville is that DEMAND for physical metal is now increasingly trumping the fraudulent, unlimited supply of paper metal [futures]. This is why “BEAT-DOWNS” in price – like the buck and half swoon depicted below [circled] on March 11, 2011 – no longer cause MASSIVE, LASTING breakdowns. A couple of years ago an engineered sell-off like the one depicted below would have decimated the silver market for months:

The real reason for the growing resilience in the metals markets is this: despite shills claiming that physical supply is no problem – institutional investors and national mints are having increasing difficulty sourcing physical metal.

In the past – smack downs in the price made investors wary and blunted demand. Today, investors are better informed and realize that smack downs in price when physical supplies are tight - are not only counter-intuitive, they’re a sign of desperation – and this brings buyers of physical metal “out of the woodwork”.

The game has fundamentally changed – but don’t tell the chartists – they’re still married to their Fibonacci retracements and buggy-whip, Bollinger bands.

With Central Banks continuing to increase the rate at which they create money out of thin air – we can logically expect this increased demand for physical precious metal to keep the price vectoring upward, to the right.

Got physical yet?

Rob Kirby

The Reality Detached American

Is Spain Next?


Most Americans have no idea just how bad the financial problems over in Europe are right now. The truth is that the entire European financial system is teetering on the brink of disaster. Ireland and Greece have already received bailouts and Portugal, Spain, Italy, France and Belgium are all drowning in an ocean of unsustainable debt. Sovereign credit ratings all over Europe have being slashed in recent months. For example, a while back Moodys Investors Service cut Ireland's bond rating by five levels. Up until now Europe has weathered all of this financial instability fairly well, but now huge new financial problems in Portugal threaten to send the European debt crisis spinning out of control.

The Prime Minister of Portugal, Jose Socrates, resigned on Wednesday after the major opposition parties banded together to vote down the austerity measures that he was requesting. The package of budget cuts and tax increases was intended to get Portugal's horrible debt crisis under control. Prior to the vote, the prime minister warned that he would no longer be able to run the country if the austerity package was not passed.

Now there are all kinds of questions about what is going to happen to Portugal. At this point most financial authorities in Europe seem to be assuming that Portugal is going to need a bailout.

Today, Standard & Poor's reduced the credit rating of long-term Portuguese government debt from "A-" to "BBB". Standard & Poor's is also warning that the credit rating may be cut further if negotiations for a bailout do not go well.

Without a bailout, it seems almost certain that Portugal will default.

Interest rates on Portuguese government debt have risen to unsustainable levels. The yield on 10-year Portuguese bonds hit 7.78% on Friday. That was the highest it has been since Portugal joined the euro.

Authorities in Portugal are publicly saying that they simply cannot afford to pay that kind of interest. Unfortunately for them, it appears that Portugal is going to be forced to issue more bonds by June at the very latest.

So how much would a bailout of Portugal cost?

Well, according to one estimate, it would probably be in the neighborhood of 70 billion euros.

That isn't going to sink Europe.

However, the concern is that the crisis in Portugal could have a domino effect.

There is increasing worry in Europe that Portugal's neighbor, Spain, could also need a bailout. But a bailout of Spain would potentially be so large that it would cause a financial nightmare for Europe.

The following is how a recent article in the Wall Street Journal sized up the problem....

Portugal's admission that it will probably need a financial bailout raises a question that will shape the outcome of the euro zone's debt crisis: Is Spain next?

The cost of saving Spain, a 1.1 trillion ($1.56 trillion) economy, would dwarf previous bailouts and could test the financial strength of Europe as a whole.

The truth is that the rest of Europe simply does not have the kind of financial muscle necessary to continue putting together huge bailouts indefinitely. If Spain does go down, it is going to put a massive amount of strain on the rest of the continent.

There are other financial problems simmering in Europe right now as well.

According to a recent Business Insider article, the financial problems in Ireland are also creating a lot of concern at the moment....

Ireland's banks are likely to need another $39 billion in support, which would use up 80% of its current bailout funds.

Ireland is a financial basket case right about now. Confidence in Irish debt is rapidly evaporating. In fact, the yield on 10-year Irish bonds recently hit 10.12%.


But that is nothing compared to what Greece is being forced to pay.

The yield on 10-year Greek bonds recently reached an astounding 12.58%.

There are persistent rumors that Greece is going to need yet another bailout. The truth is that Germany and the other European nations that are coming up with the cash for these bailouts are just pouring their money into financial black holes.

Nations like Greece and Ireland are just money pits at this point.

As I have written about previously, the financial collapse of Europe has basically become inevitable. The EU can keep coming up with bailout plan after bailout plan, but they are only putting off the crash for a while.

Eventually a point will come when all of the balls simply cannot be kept up in the air anymore.

So what is going to happen once that point is reached?

Well, many believe that we could actually see the end of the euro and potentially even the break up of the European Union.

Of course top politicians in Europe will fight tooth and nail to keep that from happening, but the truth is that at some point we are going to see some incredibly challenging financial problems in Europe. How the EU responds to the crisis is going to be extremely interesting to watch.

So many people talk about the death of the U.S. dollar, but the truth is that we could very easily see a financial collapse and a major currency crisis in Europe prior to the collapse of the dollar. Europe is in really, really bad shape right now.

Of course it doesn't help that the entire world is so incredibly unstable right now. The disaster in Japan, the war in Libya, the revolutions across the Middle East and the surging price of oil all threaten to throw the global economy into turmoil.

As I discussed in a previous article, people need to start preparing for economic disaster. The entire global financial system is coming apart. The U.S. economy is crumbling, Europe is dealing with an unprecedented debt crisis and Japan has just been struck with the worst economic disaster that it has seen since World War 2.

Most Americans don't pay much attention to what is going on in Portugal (or in the rest of Europe for that matter), but they should. The world is more interconnected than ever, and if Europe experiences a financial meltdown it will have dramatic consequences for the United States as well.

The financial crash of 2008 swept the entire globe and virtually every nation on earth was deeply affected. The next wave of the financial crisis is also going to be felt globally.

We live in one of the most interesting times in the history of the world.

Are you prepared for what is about to happen?

Sunday, March 27, 2011

Japan nuclear update

Protesters break into bank, clash with cops as London march turns violent

Jim Wille on Gold and Japan

By Jim Willie:

The entire world struggles to determine the fallout effects of the Japanese earthquake and tsunami, along with the ensuing problems. The effects are so pervasive, so profound, so critical, that it is no wonder the news networks focus on two things only. They have switched emphasis to the Libyan civil war, a pitched battle to retain a tyrant and his larcenous rule. But the news stories out of Japan focus 98% on their Fukushima nuclear complex, with hardly a peep about the long list of other economic and financial effects. This article will focus on what they leave out, dutifully reporting amidst the purposeful new vacuum in a grand distraction. The Japanese factor in early 2011 will turn out to be the most important factor to influence major global economies and the financial markets since the death of the US banking system in September 2008. Gold investors should not 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 central banker pact not only endorses the monetary hyper-inflation by the USFed, it extends it globally with a loud ring. What comes next is a global inflationary recession with gusto and power. The path had already been clearly entered, but now it is fully engaged with a jet assist. Great confusion comes, equal to the harmful momentum from numerous fronts.

The impact is comprehensive and profound as several important triggers have been hit simultaneously. Economic fallout is greatest inside Japan itself. The financial impact is greatest with the United States and Japan. A point to never lose sight of in the last two weeks is that the USGovt manages a monetary nuclear reactor that is also in core meltdown, with USTreasury Bonds as the fuel rods whose radiation has a USDollar odor. The accelerating piles of debt and money have been routinely spread systematically in a grand complicated coordinated reaction, the core of which is the United States. Watch for any interruption to the massive flow of funds into the reactor, which the G-7 central bankers were keenly aware of last week, but without mention. As with all asset bubbles, the required funds grows exponentially to maintain the asset bubble, here the USTreasury Bond. The reactor cannot lose its flow, or else a meltdown occurs. An interruption had begun, was addressed, but they will not be capable of replacing it except with more toxic money, the fiat funds. The pressure on the USFed will be shared across the major central bank offices. The inflation engineers and high priests who preach on asset bubbles will face enormous challenges to avoid a nuclear financial core meltdown. They will not succeed, and Gold & Silver will be the meter for the failed efforts that lead to meltdown. Both precious metals will double in price in the next few years. Nothing is fixed and Mother Nature just kicked the elite bankers in the shins, or a point one meter higher if the truth be told.

The recession will be deeper from the supply chain disruption and higher cost structure. The monetary inflation will be more uniform and with greater volume. The major currencies within the global monetary system will suffer much more debasement, as value erodes badly. At the same time, the boogeyman image of the US Federal Reserve will be mitigated by the full chorus of central bankers eagerly coming to the Yen currency rescue. Witness Global Quantitative Easing with extreme force, the printing presses in high gear straining to produce enough funny money to build seawalls strong enough to withstand the destructive tsunami. Wreckage from previous overwhelmed platforms has begun after three decades of funny money abuse, whose waves of busted bubbles and failed assets have been doling out powerful blows for over three years. Witness the Global QE, as all major nations will help the USFed to print money, wreck currencies, destroy capital, ruin businesses, and cause an easily recognized price inflation. Of course, they will continue to aid the elite bankers who are mostly responsible for ruin. Notice how the USDollar continued to decline, going below the 76 support level for the DX index. Despite the weak futile pathetic rebound, the DX index remains the former support under 76. Three imagines come to mind on the destructive forces: a gattling gun, a daisy chain centrifuge, and overhead office building spray.

The amazing storm will contain a nasty paradox, as the Yen currency will not stop rising. Japan as a nation will lose the ability to purchase foreign assets, a means by which they could keep their currency down. A vicious cycle has begun to take shape. Inflation will originate from the four corners of the earth, come in many forms, and have staggering effect on both the global recession and global price inflation. Assets and incomes will go into worse decline, while commodities including Gold & Silver rise powerful. Actually, Gold & Silver are money, the great anti-bubble. The USTreasury Bond will be under absolute siege for months until a climax conclusion in the near future. Consider the following major effects and forces, presented in an order to reflect their importance, not their flow of domino effects in sequential destruction. For those who grow weary of Jackass comments about destruction and ruin, it is time to wake up to reality as the nightmare persists during the waking hours. Darwin is at work, removing the failures from the gene pool, including those who refuse to acknowledge the unfolding disaster and fail to take proper defensive action. Nature is very busy challenging the managers of the earth. The people must defend and salvage their life savings before it is forfeited to a unique combination of natural asset bubble wreckage forces and syndicate planned duplicity, swindles, and seizures. Beware of false messages.


  • The trade was to borrow near 0% Japanese Yen and fund USTBonds and US Stocks for many years. Still amazing that many elite analysts have never heard of it. The Japanese situation hastens the fast retreat. The late sellers will be ruined.
  • The reversal unwind of the Yen Carry Trade appears to be entering its third and possibly final phase. The unwind has required over 12 years to complete. The YCTrade took 15 to 20 years to build into the largest, most powerful, and significant financial engine of multi-$trillion phony wealth the world has ever witnessed. Japan might next face a liquidation similar to what the United States has suffered.
  • The nation of Japan will not recover from the Yen Carry Trade unwind, which will be relentless. Its creation and sustained operation kept the Japanese Industrial Miracle going for three decades. It has finished, and run its course.
  • The YCTrade unwind is to be assured by the heavy Japanese selling of USTreasurys by the a wide assortment of Japanese financial entities. 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.


  • Call it the EMERGENCY G-7 YEN SELLING PACT or coordinated Japanese support, no matter. It will become the biggest, most grandiose coordinated monetary initiative in modern history.
  • 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. They can rescue the Yen, but not the USDollar, the new toilet paper with green embroidery.
  • 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. Huge amounts of money will be handed through the New York Fed window, directly from the Printing Pre$$, a process well underway.
  • 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. The USFed is somewhat off the hook for its monetary inflation and the associated destructive effects. The major central banks have blessed the inflation as a necessity, with urgency.
  • 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. If sovereign bonds have been on the defensive in the last year or more, watch how central bankers will be on the defensive in upcoming months. They manage an exploit of wealth, control the power centers, oversee failure, and dole out poverty even as they corrupt markets.


  • Tremendous emergency funds have been appropriated and set aside by the Japanese Govt for financial market rescue & support. More funds have been devoted for relief efforts, worker crews, earthquake & tsunami cleanup, body retrieval & searches, and reconstruction. The price will be even larger than reconstruction & relief efforts. A total national meltdown is being averted, or delayed.
  • 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 total amount is reported to be 55.6 trillion Yen, equal to almost US$700.
  • No expense will be spared, as the flood of money will follow the tsunami flood waters. The price tag grows 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.


  • Given the overloaded saturated debt situation in Japan, many assets must be sold in order to raise cash, mostly foreign. Without sales of existing actual assets, the size of the crisis and its funding aftermath would produce significant and immediate price inflation.
  • Japan will sell a large hoard of USTreasury Bonds, USAgency Bonds, and possibly US Corporate Bonds. They will sell EuroBonds and UKGilts. They will sell anything that does not bear a Japan label. If they could, they would sell assets behind the Somali and Yemeni sovereign wealth funds.
  • 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 and more.
  • An unintended consequence is for a pinprick of the USTBond asset bubble, which has been puffed for over two years. Unlimited funds will be made available to offset the USTBond dumps in an emergency setting.


  • Compounding the current situation with flow of funds is the annual migration. 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 calling home of funds from Europe, England, Asia, and 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. Bad timing!


  • 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, the major commodities will be in enormous demand. This demand at the margin will have an aggravated effect on price.
  • 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 rebuilding efforts.
  • Already, critical supply shortages have been reported. They include industries not in Japan. The demand will be across the board, including food, which has an immediate effect on survival.


  • 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 region to the north where the nuclear reactor damage occurred is the site of a concentrated food growing farms.
  • The price effect on several items within the commodity array will be sizeable and noticeably attributed to Japan. Global relief efforts will only aggravate the price effects.


  • 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. The tangible response of purchase at the margin will have an intense effect. The shortages are widespread already, also to be aggravated.
  • 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. So they sell assets.
  • 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. Japan has rapidly crossed the bridge from deflation to inflation.


  • 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 industrial factor will be perplexing, powerful, and paradoxical. Most consensus thinking will be wrong.
  • As the Japanese trade deficit worsens, and gains publicity, it will result in a Yen that rises to confuse many analysts. The Yen will rise with surprising gusto and power, invited more coordinated global actions. The central bankers will be on the defensive. Diverse Japanese entities will be in a race to sell foreign assets, as the Yen rise intensifies.
  • Japan will lose the funds from trade surplus used to purchase foreign assets, useful in keeping the Yen currency down. The suppression tool will vanish!!
  • The lost surplus is a direct result of the rise of Chinese industry, aided by Japanese firms in important technology transfer. The newly arriving trade deficit could easily become a permanent fixture, and its funding will render damage side by side to the high government debt burden. Japan will suffer from broad deficits. Industry damage comes.
  • The collateral damage to the global economy will be vast supply chain damage, both from interrupted supply and higher cost supply. As Japan slides into an inflationary recession, as industrial suppliers are strained, some will go out of business and shut down unless they receive subsidies. Those subsidies might actually come from foreign companies, who must save their suppliers that cannot be replaced easily or at all.
  • Just today a friend from an upscale condominium complex reported that a certain device to maintain water & sewer levels in his complex had broken. Its replacement must come from Japan. The vendor said it will come at an indefinite future time. Ditto for General Motors on parts and thousands of other businesses that are dependent upon the high quality and reliable supply chain from Japanese industries.


  • With all the newly created money from Japan in direct inflation, with all the USTBond sales to undermine the USDollar, with the coordinated central bank assistance in USDollar creation, with all the commodity demand in reconstruction, the overall effect on demand for Gold & Silver will be positive and powerful but a little delayed. A giant tsunami lift has begun in precious metals prices.
  • 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 rally might have started this week, as the evidence is just too plain and simple to the thinking man. A price breakout is seen in both monetary metals. The distractions from Wall Street and the lapdog US press must be ignored.
  • 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 the EuroZone all printing money, global monetary hyper-inflation cannot be avoided. It will be endorsed and welcomed. Gold & Silver will react.
  • Attempts to deal with the economic breakdown and industrial disruptions will contribute to global systemic price inflation, which has already been initiated. Gold & Silver will react.
  • Holdouts on expecting the monetary system to recover, and fiat paper currencies to stabilize, and the banking sector to revive, and the housing market to bounce back, they will totally give up and surrender. They will enter into Gold and especially Silver. Better late than never.
  • Confirmation has come that mining firms are bypassing the COMEX. They choose to sell Gold & Silver mining output to investment funds like the Sprott Fund. The COMEX will find itself in increasing isolation. Their artificially low price paid for metal has sparked a wide reaction. Unknown is the amount paid in premiums over spot prices by the funds in order to facilitate the purchases. The premium prices indicate the true price, not the nonsensical price discovery at the COMEX under suppression, cash settlement, and other crooked devices.
  • A quantum jump, threshold leap, and paradigm shift has taken place. The Japan incident with its staggering financial fallout represents in my opinion the most important and influential factor in global finance since the US banking system death in September 2008, complete with distraction, possibly even cover-up.


See the March Gold & Currency reports within the Hat Trick Letter after placing a subscription order. A more full analysis of the rapidly deteriorating Yen Carry Trade is provided in the proprietary Gold report. This carry trade is so critical, so devastating to currency markets, such a grand threat to the USTreasury Bond bubble, that the G-7 Finance Ministers did not address it, cite its unwind, or give it any mention. Their Yen Selling Pact was all about preventing a system blowout at the USDollar nuclear reactor. Their pact was a disguised USDollar rescue doomed to failure. They must have discussed the Yen Carry Trade unwind effect at half the meeting. The Japanese fallout could be the exogenous force that breaks the USTBond bubble. It will take time. At the least they have lit a gigantic bonfire under Gold & Silver markets, where precious little metals exists in the COMEX or LBMA. The global financial crisis is spreading in a horrible contagion. Big powerful price breakouts are to be expected for Gold & Silver in the coming weeks and months. They notice the grand debasement of money, even if for emergency purposes.

The USFed is no longer isolated in the monetary hyper-inflation. However, even as a group central banks cannot stop what comes, the ruin of fiat paper, both the currencies and the sovereign debt that supports the global monetary system. In fact, their group central bank actions intensify the ruin of money itself from prolific debasement. The meter, the measuring device on the wall, is the Gold & Silver price. Today, each metal registered new record high prices for the last couple decades. By year end, look for a Gold price around $1550 to $1600 and a Silver price at least $50. Gains in silver will triple gains in Gold. The quantum jump really means that enormous breath-taking huge upward moves can and should be expected. Do not be surprised if the Gold price rises $50 in a single day, or the Silver price to rise by $2.00 on a single day, in the near future. A systemic breakdown is occurring, in the Weimarization of the USDollar. Last Thursday, the world went Weimar. Gold noticed, and its scout Silver pulls the golden bridle bit.

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 . For personal questions about subscriptions, contact him at