Wow! The billboard signals of extreme crisis are overwhelming. Three years of near 0% with no recovery. A full year of ample USTreasury and mortgage bond monetization with no recovery. Tons of cash aid deliveries to the big US banks with no recovery. Some key corporate nationalizations with no recovery. Oodles of errant stimulus programs with no recovery. Some important misdirection in home loan aid initiatives with no recovery. The US Federal Reserve admits it can do nothing more as a recovery remains elusive. The USGovt is paralyzed by disguised fascist warmongers opposed by disguised marxist collectivists, but intent on maintaining the status quo among bank fraud. An approved accounting fraud directive is kept in place to present a picture of bank solvency. Intermediate credit markets have come to a standstill. The US stock market is in tatters. The USTreasury Bond market is the only conventional rally at work. And with all these programs, developments, and events, the USEconomy moves toward a recession with relentless determination and purpose, In today's age of lying about price inflation by at least 5%, that means the recession is about to turn into a Minus 5% Recession after never exiting the recession recognized in 2009. The billboard messages are dire, ugly, dreadful, dangerous, and full of destruction, typical of systemic failure. Too bad the Keynesian textbooks do not have a chapter on banking system insolvency, or one quarter of the households living in negative equity, or central bank toxic paper pits, or global currency war, or confiscation of tyrant accounts. The ineffective monetary & fiscal policy has ushered in the nightmarish systemic failure. That is what is occurring.

Many Dire Marquee Messages

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Enduring Gold Consolidation

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

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

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

 

 

Gold falls to 6-1/2 week low on commodities sell-off

* Gold on track for biggest weekly drop since early March, 2009

* Recent volatility prompts caution on buying on dips

* G20 pledges bank support, eyed bolder euro fund

By Harpreet Bhal

LONDON, Sept 23 (Reuters) - Gold slid to a 6-1/2 week low on Friday, setting the stage for its sharpest weekly drop since March 2009, hit by a sell-off in the  commodities  complex and with some traders citing selling in the precious metal to cover losses in other asset classes.

At 1134 GMT, spot gold fell to a $1,705.89 a troy ounce, having earlier hit a fresh session low at $1,698.54 -- its lowest level since August 8, as commodities came under heavy pressure in the wake of a rebound in the dollar.

A stronger dollar puts pressure on gold as it makes commodities priced in the U.S. unit more expensive for holders of other  currencies.

Traders blamed gold's fall on distress selling by investors who have grown increasingly uncomfortable with the turmoil on the credit market and were looking to cover losses from other asset classes such as equities.

In an attempt to soothe investors,  finance  ministers and central bankers from the Group of 20 said they would take " all steps necessary" to calm the global financial system and said central banks were ready to provide liquidity.

But analysts said investors were likely to watch further developments on the global  economy  before piling further into gold, with the metal's recent volatility prompting some caution.

Gold hit a record high of $1,920.30 earlier this month. This week it has fallen almost 6 percent and is on track for its biggest weekly drop since early March, 2009. It is still up more than 20 percent in the year to date.

" When gold is volatile like this a lot of buyers just sit on their hands and watch. They get nervous. Price volatility is destructive for investors because it erodes their confidence," said Ross Norman of Sharps Pixley.

" People are looking for opportunities to buy into gold on dips. There's scope for upside here but I don't think it will race back towards $1,920 (an ounce)in a hurry."

U.S. gold  futures  GCcv1 shed more than 2 percent to $1,701 an ounce, the lowest since early August, and also headed towards its biggest weekly drop since early March, 2009.

SILVER NO SAFE HAVEN

Silver prices tracked losses in industrial metals. Spot silver fell 8 percent to $32.46 an ounce, its lowest since mid-May.

The Shanghai Gold Exchange will lift the daily trade limit for its silver forward contract to 12 percent from 10 percent from Sept. 26, it said in a statement on Friday

Meanwhile, holdings of the largest silver-backed exchange-traded-fund (ETF), New York's iShares Silver Trust fell 0.31 percent on Thursday from Wednesday.

" The latest price trend show that silver is still not regarded as a safe haven, but rather as a precious metal with an industrial character," Commerzbank analysts said in a note.

" We have a similar view and believe that while strong hands will soon take over the helm in the case of gold, silver could remain under pressure."

In platinum group metals, platinum slipped 2.4 percent to $1,638.99 an ounce, while spot palladium was flat at $640.49 an ounce. (Editing by  James Jukwey)

 

 

 

Marc Faber Warning - Bigger Financial Crisis on the Way

Depressed As A Nation? 80 Percent Of Americans Believe That We Are In A Recession Right Now

Rob Arnott - “In Worst Depression Since The Great Depression

 

Gold heads for third week of decline

 SINGAPORE, Sept 23 (Reuters) - Gold rebounded from
Thursday's drop of 2.6 percent but is headed for a third
straight week of decline as investors worried over slower growth
prospects sold the precious metal after losses in the equities
and commodities markets.	

 FUNDAMENTALS	

 * U.S. gold futures GCcv1 were at $1,749.20, up 0.4
percent by 0059 GMT, but traded below the key $1,800 level for a
seventh day.	

 * On Thursday, U.S. gold futures posted their steepest
losses in a month.	

 * Spot gold gained 0.4 percent to $1,742.99 an ounce
by 0046 GMT. Prices are up 17 percent so far this quarter, set
for the best-performing three-month period in 25 years.	

 *  Americans filed fewer new claims for jobless benefits
last week but the decline was not enough to dispel worries the
economy was dangerously close to falling into a new recession.
 	

 MARKET NEWS	

 *  The dollar and yen held huge gains in Asia on Friday as
investors capitulated to their fears and bailed out of crowded
trades in commodities and growth-leveraged currencies for the 
perceived safety of Treasuries. 	

 * World stocks fell to 13-month lows on Thursday as weak
data from China crystallized investor fears of a global
recession one day after a grim economic outlook from the U.S.
Federal Reserve. 	

Stephen Leeb - China Gold Consumption Going Exponential

 

 

Gold falls as pre-Fed nerves trigger profit-taking

* Gold set for best quarter since 1986

*  China  silver imports slide 30 pct y/y -data

* Coming up: FOMC policy decision 1815 GMT

By  Amanda Cooper

LONDON, Sept 21 (Reuters) - Gold fell on Wednesday as investors booked profits on the metal's rally earlier in the day ahead of the outcome of a Federal Reserve policy meeting that many hope will confirm the central bank's strategy to kick-start U.S. growth.

The Federal Open Market Committee (FOMC) is widely expected to signal it will rebalance its portfolio of Treasury holdings in favour of longer-dated debt, which should help it anchor longer-dated interest rates, rather than embark on a another multi-billion round of government bond buying, or quantitative easing.

Gold has been a major beneficiary of the Fed's QE programmes, having gained more than 40 percent since the central bank's most recent round of bond buying, which ran from November 2010 to June this year.

While few in the market expect QE3, any measures that keep U.S. rates low in the face of a struggling  economy  should support gold in the longer run, although with market volatility running high, the bullion price will still be prone to such swings.

Spot gold was last down 0.6 percent on the day at $1,792.80 an ounce by 1355 GMT, after having risen earlier in the session by as much as 0.7 percent to $1,816.26.

So far this month, gold is down by 0.7 percent and set for its first monthly fall since June.

On a quarterly basis, it is set for its strongest gain since 1986 as consumers and investors alike remain undeterred by near-record highs.

" Once the Fed is out of the way, market players should focus more again on the euro zone debt crisis and whether or not  Greece  will default ... this should be very supportive again of gold and, besides, the latest demand data all point to very robust demand, that is sustainable demand, even at the current high prices," said Commerzbank analyst Daniel Briesemann.

Highlighting the bullishness, an annual survey of gold investors and analysts at the world's largest bullion traders event showed participants believe the price will rise beyond $2,000 an ounce in the next year, although it will not match the record-breaking 50 percent surge of the last 12 months.

With no let-up seen in the financial  markets  uncertainty that fanned the safe-haven investment spree, bullion is expected to rise to $2,019 an ounce by November 2012, according to an anonymous survey of delegates at the conclusion of the London Bullion Market Association's (LBMA) annual conference on Tuesday. That is about 12 percent above current levels.

ON FEDWATCH

In the latest sign that U.S. growth has stalled, new construction of U.S. homes fell more than expected in August, keeping pressure on President Barack Obama to do more to help the economy.

" Gold is back in a holding pattern and awaiting the outcome of the Federal Reserve policy meeting," said Ross Norman, director of Sharps Pixley.

" The gold market will be scrutinizing reports for any signs of further monetary easing which would give the green light for the market to move higher again and possibly back towards record highs at $1,920."

Silver rose by 1.0 percent to $40.06 an ounce, mimicking the steady tone of the gold market.

In fundamental news for silver, imports into key consumer China rose to two-month highs in August, but at 314,706 kg, they were down by a third year on year and below both the monthly average of 316,865 kg for this year and the 2010 monthly average of 436,777 kg.

The Chinese data also showed a 9 percent yearly rise in imports of palladium to five-month highs. The metal is used primarily in catalytic converters in gasoline-powered vehicles and China, home to the world's largest car market, is a key source of demand.Spot palladium was last up 0.1 percent on the day at $712.72 an ounce, while platinum pared earlier gains to trade flat at $1,770.24 an ounce. (Additional reporting by Rujun Shen in Singapore editing by  Jason Neely)

 

 

Gold hovers around $1,800 eyes on Fed

By Rujun Shen	

 SINGAPORE, Sept 21 (Reuters) - Gold prices hovered around
$1,800 an ounce on Wednesday supported by heightened fears of a
euro zone banking crisis and ahead of the result of a key U.S.
Federal Reserve meeting. 	

 FUNDAMENTALS	

 * Spot gold edged down 0.2 percent to $1,800 an ounce
by 0013 GMT, after a 1.4-percent rally from the previous
session.	

 * U.S. gold GCcv1 inched down 0.3 percent to $1,803.30.	

 * Standard &  Poor's cut Italy's credit rating on Tuesday in
a surprise move that increased strains on the debt-stressed euro
zone, and the International Monetary Fund said Europe's leaders
were failing to act decisively enough to resolve the crisis.
 	

 * Investors are waiting for a statement from the U.S.
Federal Reserve due at 1815 GMT, to see if the Fed would offer
more stimulus measures. 	

 * Gold's rally will extend beyond $2,000 an ounce in the
next year, but won't match the record-breaking 50 percent surge
of the last 12 months, according to an annual survey of gold
investors and analysts at the world's biggest bullion traders
event. 	

 MARKET NEWS	

 * U.S. stocks ended little changed on Tuesday as investors
waited to see if the U.S. Federal Reserve would offer more
economic stimulus and if Greece made progress in talks to avoid
a default. 	

 * The dollar index edged lower on Wednesday on
expectations the Fed would adopt further easing to stimulate a
slowing economy but analysts said such a move may not be
negative for the U.S. currency. 	

London Trader - Massive Physical Floor in the Gold Market

Original Source

 

 

Louise Yamada - Still Bullish Gold & Silver, Not Stocks