Tuesday, April 19, 2011

Japan rethinks its economic centre

From: AlJazeeraEnglish | Apr 18, 2011

In the wake of the magnitude 9.0 earthquake that rocked Japan's Tohoku region on March 11, Japanese businesses are considering decentralising and moving away from Tokyo, where many expect the next "big one" will hit.

Inside Story: Siege of Misrata

Gerald Celente - Stop the Wars

This video was released on 22 March ~

America loves debt!

From: RTAmerica | Apr 13, 2011

US President Barack Obama says America needs to be more fiscally responsible. Ironically, Mr. Obama is also calling for an increase in national debt ceiling. Currently, the country is more than 14-trillion dollars in debt. According to the congressional budget office, nearly 200-billion dollars of interest was paid out to public debt holders in 2010. With its own accounting is such disarray, many say America has lost legitimacy to lead the world on economic issues.

US in ungovernable situation

From: RTAmerica | Apr 18, 2011

Four years ago then presidential candidate Barack Obama made lucrative promises to Americans. He wowed to stop the war in Afghanistan and thensome. Four years later, the war continues and the US is at war in yet another country -- Libya. Billions of dollars are being annually spent on military endeavors as social service and health care spending are cut. "Imagine a political system, where all the politicians are honest and tell us what's really going on. If they told you the truth, you would impeach them," says Caroline Heldman, who is a professor of Politics at the Occidental College. President Obama had a very ambitious agenda, so there is no surprise he has not been able to accomplish it, she explained.

Nobody is Smarter Than The Markets

By Bob Chapman:

Neither government nor anyone is smarter than the markets. As they say the trend is your friend. All you have to do is get on for the ride. It’s really as simple as that. The trick is picking the trend. We were fortunate enough to pick gold and silver in June of 2000. We went long and stayed long all those years only occasionally making a trade. Every time there was a correction we recommended further purchases.

It has been unfortunate that the US government, other central banks, including the Federal Reserve, chose to attempt to manipulate those markets. They did retard the progress of these two metals and they are still doing so, but in the end they will fail, because the markets are far bigger than they are and the collective wisdom of investors will always triumph over the narrow desires of petty elitists.

There certainly are two sides to every market. On one side you have the vested interests, who generally do not really understand the functions of gold and silver historically, they’ll never understand and don’t really care to understand. This might be called the establishment viewpoint. In fact the entrenchment is so deep that people who believe in gold and silver are scorned and some brokerage houses won’t even allow trades in gold and silver shares, coins and bullion. We ran into this problem as long ago as the early 1960s. In fact it forced us to become a principal of a firm as long ago as 1968. The rise of gold and silver threatens the status quo. If you see the values of gold and silver you threaten the fiat system and how it fleeces the investors.

Then we have those who should know better who attempt to out guess the precious metals market and in that process prove to be consistently wrong costing their subscribers and others losses and as important lost opportunities. All to often it is the pursuit of fame and challenging a market that cannot be challenged. Usually unfortunate decisions are due to a lack of knowledge or a penchant to sensationalize in order to capitalize. This often leads to some pretty dumb decisions. Over the last $500 move in gold, and $30.00 move in silver we have seen 96% of letter writers, economists and analysts render wrong decisions. We do not find that surprising, because most of them have never been in the belly of the beast nor do they know history, particularly economic and financial history.

For many years we have faced the deliberate and gradual destruction of our economic and financial system by those who want to be mega-rich and to implement world government. The global monetary system is being deliberately imploded, particularly in the US, UK and Europe, the regions of great success over the past 1,000 years. Creating and forcing an edge does not work. Such opportunities come naturally if you are doing the right thing and understand the history and reasons why things are happening the way they are. There is a big picture, but you have to understand all the facets that make the picture complete. Those who wallow in mediocrity can and do cost investors lots of money and lost opportunities.

Gold and silver are intimately intertwined in our lives as a standard and store of value, but there are those who have told us over the centuries that fiat money is better. History has proven over and over that is not true. Such thinking has destroyed many civilizations.

As we write we are at the end of another week of record prices for gold and silver. Every day we think of what could have been already and will eventually be. Yes, we predicted these prices long ago, but we never envisioned the actions by central banks and particularly the US government to destroy gold and silver markets. We knew they’d be unsuccessful, but 20 years of figuring was such a terrible waste of human energy. In August of 1988 we wrote about market manipulation in “Bull & Bear” and everyone thought we were insane. We proved to be right and at that time we didn’t even know there was an Executive Order called, “The President’s Working Group on Financial Markets.” This instrument in the misuse of power has been used by Wall Street, banking and government to destroy our free markets and will continue to do so, as long as we allow it to enrich the financial interests that for so long have controlled our nation.

We are seeing and have been seeing for years a flight from currencies and particularly a flight from the US dollar into gold and silver. That will continue as long as currencies remain fiat. Secret meetings are being held at this very moment by elitists to give the world another bogus fiat currency, as a world reserve currency.

In reference to real money the silver trap JPMorgan Chase and HSBC have been trapped in is, in all probability, coming to a close. We see default somewhere between $48.00 and $60.00. The losses could be as high as $150 billion. No one knows how settlement will be carried out. There could be total default, partial default or the government could step in and supply the capital for a bailout. We do not know whether Congress or the people, will sit still for another bailout. Coming on the heels of other monetizing bailouts there could be real trouble over this monetization. JPM and HSBC could say they were just taking orders from the Fed and the Treasury and things went bad. They did this in the lawsuit a number of years ago brought by Blanchard where a secret deal was made to shut Blanchard up. It included not only JPM, but the Illuminist controlled Barrick Gold as well. If any of the three avenues of escape are used the result will be a devastating blow to the dollar.

There is no question that there is an acute silver shortage, so much so that rather than taking delivery of silver, that sellers such as JPM and HSBC don’t have, that bonuses from 25% to 80% are being offered. There is no question in our minds that the Fed has been behind all this and that is why there could be some kind of government bailout. You can see why Rep. Ron Paul and Senator Rand Paul want to audit and investigate the Fed. Is it any wonder the US dollar is falling and all currencies are rising versus the dollar, even the Mexican peso. Adding insult to injury the US created civil war in Libya and it is not going well. NATO forces are so inept that they are bombing the wrong troops. Then again we wouldn’t expect anything less then FUBAR. As a result the other Arab allies of the US, the petro dollar strongholds, are having second thoughts about the US and the dollar. They are buying gold, silver, commodities and of all things euros, in spite of Europe and the euro zones horrible financial condition. If the oil producing nations in the Middle East start using other currencies such as the euro for selling oil the dollar and the US will be in a world of hurt.

As silver breaks out to new highs gold does as well. Gold’s breakout is no surprise. The war over the last two years between gold and the dollar, as world reserve currency, has been won hands down by gold. Gold is now getting strength from the perception, that inflation is higher than official sources care to admit and that inflation is gaining upward momentum. The situation in the silver market and its unbelievable strength also has to be helping gold on the upside. Additional assistance is coming from the newsletter writers where the overwhelming majority has been telling readers to sell gold and silver or wait for a correction that never comes. From a contrarian viewpoint this is very bullish, because these nitwits are trying to sell subscriptions, have been wrong every year for five years. It is no wonder we are getting nasty reports of newsletters renewing subscriptions with a credit card on file when the subscriber does not want to renew. The subscribers do not have a phone number to call and when they email the box is always full. If any of you subscribers have experienced this let us know the details. If it persists we will start publishing the names of the fraudsters. Desperate people do desperate things.

Incidentally, if cover or default does not occur in silver there will be a quick explosion to $100.00. We will see just how insane these elitists really are. Such an event would quickly take gold to $2,400 to $3,000 an ounce. The physical market will lead the way and eventually the real market. Futures, options, derivatives and ETFs will become a non-factor due to corruption and probably stop trading unable to satisfy contracts. If that is allowed to happen gold and silver would fully assert themselves as the only real money, particularly gold. All currencies would visibly be compared to gold, as would inflation and finely people would have a real guideline of value. The faith and reliability of the Fed would be shunted to the background as Congress finally takes a hard look at what the Fed has been up to for so long. Major changes should be on the way, because finally it will be recognized that the Fed had created a systemic collapse of the monetary system that has affected the entire world. It will be recognized the Fed destroyed the financial system, but in that process supplied resources to keep insolvent institutions afloat, some of which just happened to own the Fed. Until those institutions are allowed to go bankrupt there can be no recovery. The system has to be purged. On the other hand for now the Fed has plans to continue quantitative easing and it still remains to be seen if Congress is serious about budgetary reductions. As long as the status quo remains in tack gold and silver will rise.

Gold and silver have again broken out to new higher ground. We believe these successes are being caused by a continued flight to quality that has been going on for 11 years. As we have said previously gold has proven over the past two years that it is the only international currency. Silver in shorter supply certainly in part is reflecting the JPM and HSBC positions. The new expediting factor for both metals is the specter of much higher inflation caused by QE1 and stimulus 1 for 2011, more added inflation from QE2 and stimulus 2 in 2012 and the recognition that QE3 is on the way.


Flash Crash To The Upside In Gold

By Harris Kupperman

Traders like to talk about panics or crashes--“The Panic of 1907” or “The Crash of 1929.” Usually crashes involve something dropping in price. I have this funny feeling that the panic of 2011 will be upwards. There has been a slow move into hard assets for years now. One by one, investors are beginning to understand the meaning of what the Federal Reserve intends to do to our currency. Even more importantly, investors are beginning to understand that most Western governments are effectively bankrupt. None of this should be news to anyone. What is shocking is our government’s blasé attitude to the mess it has created.

We are now wrapping up a very contentious period of debate about the budget. After threatening to shut down our government, both sides agreed to cut a few dollars and go on with the status quo. It reminded me of an insolvent company deciding to save money by eliminating free coffee. If I were a creditor to the US, I’d be in a blind panic. I think many people are suddenly realizing that the system is broken and no one has any desire to fix it.

For the past few months, gold has gone up, even while Fed officials have threatened to stop QE2 before it was scheduled to end. I think that’s telling. Gold knows what’s going on. People are slowly waking up to its charms.

Fear is a strange emotion. Normally, when people are scared, they sell assets for dollars. What does a crash look like where people sell dollars to buy gold? “Get me something to own that the government will not destroy!!” If you think your currency will be worthless, there’s almost no price that’s too high to pay for gold. In the past, there was always another currency that you could buy. Argentines had dozens of options each time their currency collapsed. What if there are no other options? All the currencies are now bad.

I realize that the concept of an upwards crash is strange to people. Look at what happened to the CBOE volatility index (VIX) from late 2007 until 2009. I think gold is about to do something very much like that. The days of slow and contained gold moves are over. We are about to see some real volatile action. What will people do if gold has a $100 one day move higher? Will they panic out of other asset classes to buy more?

2008 VIX spike

Everywhere I look, gold is one of the most hated asset classes—even though it is at multi-year highs. Gold futures open interest is down from highs a few months ago. Open interest in the Market Vectors Gold Miners ETF (GDX: NYSE) is near 2 year lows. These are products that traders use to get exposure. No one cares about gold yet. I think that the doubters are about to suddenly become believers.

A smart friend once told me that if you want to write about the market, you should never predict an event and a date simultaneously. I have always said that this bull market in gold will not end until there are $200 dollar up days in gold. You need something so shocking that it scares the politicians to stop acting stupid. I’m not saying that I know what gold will do next week, but I think we’re on the cusp of a real paradigm shift. Some time very soon, people will have no choice but to panic. We are getting very close to the first flash crash higher in gold. There will be plenty more flash crashes to follow.

Harris Kupperman


Jim Rickards - Gold, Silver, MENA & $US

A wide ranging discussion with Jim Rickards, Senior Managing Director for Market Intelligence at Omnis, Inc. and Eric King of King World News.......listen here

CrossTalk: Flat Broke!

From: RussiaToday | Apr 18, 2011

In this edition of Peter Lavelle's CrossTalk: Does the current budget war in Washington really matter anymore? After all, just look at the numbers and it is obvious the US is already bankrupt. Can Americans end their spending spree addiction and learn the science of saving? Shouldn't the government do the same? CT-ing with Martin Hennecke, Jeffrey Frankel and Joseph Weisenthal.

Robots in Japanese Reactors Find High Radiation

One of the World's biggest pension funds buys physical gold

From Gold Core:

Gold is increasingly being seen as the superior currency in a world of trillion dollar and euro deficits and bailouts. Indeed, the printing and electronic creation of billion and trillions of the major paper currencies is increasingly making gold and silver the currencies of last resort.

Governments and central banks are debasing currencies through bailouts, deficit spending and quantitative easing which is leading to a massive increase in the supply of fiat currencies. Precious metals are rare and finite and this is why major currencies are falling in value versus gold and silver.

One of the largest pension funds in the world, the University of Texas Investment Management Co (which manages the endowment for the Texas teachers pension fund), has realized this and has put 5% of the pension fund into gold bullion (see news).

Unusually, but likely to be seen more frequently in the coming weeks and months, the pension fund has opted to own physical bars worth nearly $1 billion dollars in allocated accounts.

The fund has previously expressed concerns about the counter party risk in ETFs. However, the reason given for opting for taking delivery of 100 oz gold bars in a warehouse was that if the holders of just 5 percent of COMEX futures contracts opted to take delivery of the metal, there wouldn’t be enough to cover the demand leading to a COMEX default.

The risk of a COMEX default increases by the day and appears to be moving from the realms of the “conspiracy theory” to that of “of course we knew it would happen, it stands to reason and was inevitable”.

A COMEX default would have serious ramifications for the dollar and all fiat currencies as it would further erode trust in central banks, fiat currencies and today’s monetary system.

Marc Faber - We are in a contest for the ugliest currency

Toyota resumes production at all domestic plants

Expect the Palladium prices to recover as the Japanese "Just in Time" inventory system restarts and resumes drawing down physical palladium for the manufacture of catalytic convertors.

From NHK World:

Toyota Motor has resumed production at all its assembly plants in Japan.

Production resumed on Monday at 11 Toyota plants, including 2 affiliated companies in Miyagi and Iwate Prefectures. Those are 2 of the 3 prefectures in eastern Japan that were hardest-hit by the March 11th earthquake and tsunami.

The disaster damaged the factories of auto parts makers in the region, and caused the suspension of production at almost all of Toyota's domestic assembly plants.

On March 28th, 2 weeks after the disaster, production resumed for 3 hybrid models at 2 plants of affiliated makers in Aichi and Fukuoka Prefectures in western Japan.
On Monday, employees arrived at a factory in Toyota City in Aichi, well before the start of operations at 6 AM.

One of them said he is happy that the assembly line will be operating again and that he will do his best to provide excellent cars. Another man said he is still concerned as operations will be half the usual level.

Daily output is expected to stay at around 6,000 units for the time being, which is half the usual number, as uncertainty remains involving the supply of parts.