muses of the moment

June 30, 2009

I had a good laugh today

OK, I totally lost it when I read this:

Bernanke clearly regarded the bill’s intent as hostile to the institution he represents:

“My concern about the legislation is that if the GAO is auditing not only the operational aspects of the programs and the details of the programs but making judgments about our policy decisions would effectively be a takeover of policy by the Congress and a repudiation of the Federal Reserve would be highly destructive to the stability of the financial system, the Dollar and our national economic situation.”

Ummm..the head of the Federal Reserve just admitted they are playing a huge shell game (their policy) and don’t have anything to back up what is on their books. The emperor has no clothes and he doesn’t even pretend anymore that he does. We are doomed. The dollar is DEAD. Get out now.

This financial crisis, the end of the dollar and the coming hyper-inflationary depression are all the expected result of a fiat currency and fractional reserve banking system. This has happened in other countries throughout history, this should not be a surprise to anyone.

Quote taken from  Bernanke Threatens Economic Collapse If Fed Audited– By Aaron Dykes

Click here for the complete article.

Oh, and by the way, the US Constitution says that Congress CAN audit the Fed.

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June 27, 2009

FDIC continues controlled bank implosion

Filed under: Bank bailout, Economic Crisis, FDIC, Safe banks, The Banking Crisis, The Financial Crisis — totallygroovygirlfriday @ 6:14 am

5 more banks implode on Friday:

FDIC official site

Are you protected?

This is the boiling frog process. No one is concerned until their bank goes under or the FDIC runs out of money. The banking system is broken.

June 25, 2009

“Do Not Allow the Wish to Father the Thought”

The title is a quote from William Peter Hamilton. It is to be remembered during these times.

Tim Wood over at financialsense.com gives an excellent explanation of the counter trends happening right now. Do not be fooled, the fundamentals have not changed.

He also summerizes the K-Wave Winter Cycle, as I have done in other posts….most items happening now.

For Full article….Tim Wood’s Market Observation

Here are some highlights:

Based on the technical and statistical work that I do, the data is telling me that pretty much all of the moves we have been seeing over the last 2 to 6 months, depending on which market you are looking at, are counter-trend moves. As a result of these counter-trend affairs, the powers that be continue to think that they have the problem under control. The average person on the street sees that the markets are rising and they, too, begin to think that the worst is behind us and that maybe the bail-outs and various stimulus packages are working. It is my opinion that this false optimism and the lust for things to return to “normal” is going to cost the average investor dearly once this counter-trend move concludes.

Think for yourself. Words to invest by:

Sound unbiased technical methods are the only way I know to navigate the ongoing financial disaster that we are dealing with. The politicians, Republican or Democrat, nor the mainstream media warned you of the previous declines because they did not know they were coming, and even if they did they would not have told you. Do you really think they would tell you anything any different this time around?

Things to expect during the Kondratieff Winter Cycle:

Guys, we are in the midst of Kondratieff Winter, not the beginning of a new bull market.

“Global Stock Markets Enter Extended Bear Markets”
This should be obvious to all.

“Trends During Winter: Stocks Down, Bonds Up, Commodities Down”
These longer-term trends remain intact and the recent moves to the contrary are counter-trend.

“Interest Rates Spike In Early Winter Then Decline Throughout”
In June 2004 the Discount rate was at 2.00%. By June 2006 it was at 6.25% and since August 2007 the Fed has been forced to cut the Discount rate back to .50%. So this too, fits.

“Economic Growth Slow or Negative During Much of Winter”
I doubt that many will argue that growth is now slow and in many cases negative.

“Commercial and Residential Real Estate Prices Fall”
This obviously began back in 2006 and there is still much more to come.

“Bankruptcies Accelerate and High Debt Eliminated by Bankruptcy”
This has obviously begun and is no doubt related to the housing and credit bubbles.

“Social Upheaval and Society Becomes Negative”
We are only just beginning to see this.

“Banking System Shaken and New One Introduced”
The banking system is now only beginning to be shaken. There should be much more to come.

“Free Market System Blamed and Socialist Solutions Offered”
This has not yet happened, but just wait.

“National Fascist Political Tendencies”
Just wait, there is much more to come.

“Debt Level Very Low After Defaults and Bankruptcy”
This has not happened.

“Trade Conflict Worsen”
This basically has not happened.

“View of the Future at a Low Ebb”
This has not happened as everyone seems to be looking for the bottom.

“New Work Ethics Develop Since Jobs are Scarce”
If I can assure you of one thing it is that this has not happened.

“Greed is Pruged from the System”
I can absolutely assure you that this has not happened yet.

“Real Estate Prices Find Bottom”
This has not happened.

“There is a Clean Economic Slate to Build On”
Not happened yet.

“Investors are Very Conservative and Risk Averse
Again, this has absolutely not occurred.

“Interest Rates and Prices Bottom”
Not happened.

“A New Economy Begins to Emerge”
Has not happened

“Stock Markets Reach Bottom and Begin New Bull Markets”
Again, we aren’t there yet.

Make sure your investments are set for the “winter cycle”.

June 24, 2009

Controlled Bank Implosion

Filed under: Bank bailout, Economic Crisis, Safe banks, The Banking Crisis, The Federal Reserve — totallygroovygirlfriday @ 2:38 pm

It has been too quiet on the weekends at the FDIC, but they made up for it a little last weekend. Three more banks taken over.

As I have said before on this blog the systematic problems of the US Banking System have NOT been fixed. Creative accounting, backed by the FDIC, The Fed, and the Administration, is hiding the problem.

Expect ongoing banking problems.

Here is a little note from one of Jim Sinclair’s readers:

Jim,

I have a friend here.

This guy has several degrees in the financial realm and was just hired out of his already good job by the FDIC in CA to come down and shut banks down. He told me tonight at a goodbye meeting that bank seizures and shutdowns were going to get worse and that “this is the big one”. He has never heard of Jim Sinclair and knows nothing of the kind of talk that goes on here at JSMineset.

He is absolutely not given to hyperbole. Things are gonna’ get worse. Obama was so right; “You ain’t seen nothing yet.”

CIGA Bob

I do not think that there will be a national banking holiday (longer than a few days, with the except of another terrorist attack) as the US economic-financial system runs on 24-hour access to banking.

However, I would not rule out regional banking holidays, like say, in California. The State of California is getting ready to collapse. This is almost 20% of the US GDP.

The FDIC is in the process of a controlled takeover of troubled banks. And there are alot of them. If things get out of hand, there could be a banking holiday, but I think this will be a last resort.

Harry Schultz is concerned about US Embassies buying lots of local currency. However, I think that is a reaction to other nations not wanting the dollar, not a bank holiday or dollar debasement.

The US will replace the dollar only after the global community forces it and .80 is not low enough for force…yet.

No reason to panic (unless you are in California). Make sure your cash is spread over national, regional and local banks, so you may have access to some of it without disruption. This applies to business as well as personal accounts. And get out of CA bonds.

Is your cash protected? Do you have 2 or 3 banks in case 1 or 2 of them implodes? Remember the FDIC promises you will get your money, but they do not tell you when. No access to a million dollars in the bank is equal to NO dollars in the bank.

June 23, 2009

As I said, Hyperinflation is coming

John Williams at shadowstats.com sent out a flash update. You have to pay for the number detail to back up John’s warnings.

The US Dollar montery base has DOUBLED year over year. These extra dollars are slowly moving into prices, especially dollar-dominated commodities like oil. This trend is likely to continue.

The Fed will continue to purchase its own securities as they become less and less popular with the world, creating more US Dollars.

This non-demand driven inflation will continue to accelrate and hyperinflation will set in within a 12-month period.

Expect to see increasing inflation (in the real numbers, it’s 6% right now) by the end of the year and hyperinflation by next year.

Are your investments positioned for hyperinflation? Is your capital protected?

Hyperinflation will seem to come out of nowhere, there will be no time to prepare when it is clearly upon us.

June 22, 2009

What about those Bonds? (Updated)

Filed under: Odds 'n ends, US Government Debt — totallygroovygirlfriday @ 2:55 pm

The US media is strangely silent on those bonds confiscated between Italy and Switzerland.

I sure hope they are fake. Because, if they are real, then our government has been doing some under-the-table quantitative easing long before this crisis. $134 BILLION (in $500 million certificates) is some serious cash. If they are fake, how much more is out there? Fake or real, this is not good for the dollar and global confidence in the United States.

Here is an explanation and up to the minute coverage.

Market-ticker.org’s full article, The Saga of the Bearer Bonds.

Another article: US says they are fake……interesting.

Update from Marketticker…Resolution?

This is a very interesting story.

June 21, 2009

A Shift in Thinking

The current economic crisis is unlike anything this generation has experienced. It will require a shift in thinking.

Chris Martenson makes it his mission to help the baby boomers with that shift.

Listen to this wise sage:

What next?

My purpose in writing about the true source of material wealth and the impact of baby boomers on stocks, bonds, and housing prices is to prompt you to seriously consider the possibility that the economic activity of the last few decades is misleading. 

It is this disconnect between “how things were” and “how things actually work” that led me to make serious changes to my life.  It formed the basis for my deeply held belief that the next twenty years are going to be completely unlike the last twenty years.

If you are like me, your beliefs about “how things work” were shaped during an anomalous period which will not soon be replicated in our lifetimes – if ever.  It comprised a unique combination of demographics, geopolitical circumstances, a politicized Federal Reserve, supportive energy supplies, and corporatized media better suited to reinforcing consumer beliefs than delivering essential context.

In my estimation, this marks the beginning of a great leveling of expectations between what we promised ourselves and what reality can deliver.  We are in the opening stages of a grand play with many acts and even more plot twists.    

I intend this piece to give you one more tool in your toolbox that you could use in your discussions with your financial advisor, spouse, friends, or with whomever you regularly discuss our future financial prospects.

The final act in this play, I suspect, will be the destruction of the dollar, along with many other fiat currencies, as stores of wealth.  You still have time to begin maneuvering your wealth out of fiat (paper) currencies and into tangible expressions of wealth, but in my experience, most people won’t, until and unless their beliefs are in alignment with the necessary actions.  For most people, most especially me, sawing at the rope that anchors our beliefs in the past is a slow process, with progress being measured by the breaking of each individual strand.

 For Chris Martenson’s “The Great Asset Bubble” complete article…visit his website.

June 20, 2009

LEAP E2020

LEAP/E2020 has put out another letter.

I like this trend-watching website. Although they are not always right on with intensity, they are spot on with type of trend and most timing. I like their analysis because it includes all of Europe zone as well as US. They are a good source for what the rest of the world thinks about the US financial crisis.

Read their full free article here. You can pay to get more detail.

Leap 2020 agree with other economists I trust that the “green shoots” and “recovery” is a bunch of spin.

The scary highlights:

At this stage of the global systemic crisis’ process of development, contrary to the dominant political and media stance today, the LEAP/E2020 team does not foresee any economic upsurge after summer 2009 (nor in the following 12 months) (1). On the contrary, because the origins of the crisis remain unaddressed, we estimate that the summer 2009 will be marked by the converging of three very destructive « rogue waves » (2), illustrating the aggravation of the crisis and entailing major upheaval by September/October 2009. As always since this crisis started, each region of the world will be affected neither at the same moment, nor in the same way (3). However, according to our researchers, all of them will be concerned by a significant deterioration in their situation by the end of summer 2009 (4).

In fact, these three waves do not appear in quick succession like the « sisters rogue waves ». They are even more dangerous because they are simultaneous, asynchronous and non-parallel. Hence their impact on the global system accentuates the risks because they hit at various angles, at different speeds and with varying strength. The only certain thing at this stage is that the international system has never been so weak and powerless to face such a situation.

These waves appear as follows: 

1. Wave of massive unemployment: Three different dates of impact according to the countries in America, Europe, Asia, the Middle East and Africa 

2. Wave of serial corporate bankruptcies: companies, banks, housing, states, counties, towns 

3. Wave of terminal crisis for the US Dollar, US T-Bond and GBP, and the return of inflation.

Make sure your investments and banking funds are as secure as possible. The next leg down is coming. If you were fooled before, do not be fooled again.

June 19, 2009

Don’t kill the messager, it doesn’t change the message

Reflexivity – the idea that people base their decisions on their own perception of a situation rather than on the reality. George Soros

Jim Sinclair’s commentary June 17, 2009 (bolded items are mine):

Flash Report :

It is my strong opinion that Bernanke is committed to not letting this up trend line break down, using all the power of the Fed in Quantitative Easing. That means the Fed will buy practically unlimited offerings at auction and in the market should it be necessary.

The problem is market, money and speculators can overwhelm all central banks combined should confidence be lost. Confidence has been maintained by an almost unlimited creation of new money.

Be assured consequences cannot be avoided. The long term uptrend line of the 28 year long bond market is the confidence line and therefore becomes the most important line ever drawn in an attempt to determine the future of an empire.

Nobody in their right mind wants what is coming, but airwaves and hot air is no mendicant. Failure to allow economics to take its natural course in bankruptcy of the deficient, central bank support for the OTC derivative vehicle by the previous Chairman and bubble making all brought this plague upon us.

Economic seer, Chris, (Chris Martenson) starts his presentations with the desire to be totally wrong but the conviction he is not.

Master Technician Alf (Alf Fields) takes no joy in what he sees but he sees it.

Nobody could have a more miserable circumstance than economic historian and master timer, Armstrong, (Martin Armstrong) but April 19th was dead on like many of his prediction. If he is wrong he will not remain wrong for more than a few weeks. I see him as calling one more time in the black of the bull eye.

 Jim Sinclair’s Commentary

 

Here is a scary chart, but don’t worry,clip-image0019 the Fed can drain all that money when necessary. Yeah, right.

Martin Armstrong’s Latest Letter June 12, 2009

Filed under: Economic Crisis, Long term investing, Martin Armstrong — Tags: — totallygroovygirlfriday @ 6:03 am

Click here to read full letter. By Martin Armstrong entitled “Is Fortuna Going to Change Course for Obama?” Released June 12, 2009.

Update:

My comments and the highlights:

Fortuna, the Roman goddess of fortune. Will she change her course for Obama? The short answer is no. No matter who was elected president in 2008, him or her was doomed by the current economic cycle.

The first section is a review of American history and England’s oppression of the Colonies prior to the Revolution. American Colonists were upset with the British Government because there was no rule of law in the Colonies (because they were just that colonies). British government could search homes and businesses (and take what they liked in the process). When the Colonies tried to complain and sue in British Courts, the cases were thrown out.

Martin Armstrong points out that Obama has now asked foreign countries (and therefore banks) to open records on Americans without due process. You can guess the conclusion.

Martin continues his argument that the absence of the Rule of Law in the United States will be its downfall and the timing of that fall will coincide with his Confidence Model.

The conclusion is the best read:

  • Economic crisis will continue and cause Obama to be a one-term president. The nation is not happy with Republicans either and therefore the possibility of a 3rd party in 2012 is strong.
  • High volatility in the markets will continue, 40% of trading is in ETFs.
  • The government will continue to sell debt, but soon the world will stop buying.
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