27 March 2009

International Forecaster March 2009 (#7) - Gold, Silver, Economy + More

Treasury Secretary Timothy Geithner tells us we are in a recession that will last for some time. Ben Bernanke, Federal Reserve Chairman says the economy would bottom this year. We do not think Ben is right but even if he was right he didn’t tell us how long we would bump along the bottom. If the bottom is in sight and Citigroup, GE, Hartford Insurance Lincoln Insurance, AIG, GM and Chrysler, etc. won’t need any more government funding. In fact banks are telling us they are going to make money in the first quarter. If all this is so, why is Mr. Bernanke monetizing $300 billion of Treasuries. We notice he has made no statement regarding the secret monetization that has been going on for four months. Needless to say, that is another state secret. He might also explain why there was enormous call buying in bond futures options over the three days prior to the announcement on Wednesday. Obviously there was a major leak to the anointed on Wall Street.


While Ben Bernanke buys $300 billion in Treasuries he is contemplating another $300 billion. In fact there is an excellent chance that the $300 billion, or at least a large part of it, has already been spent. Between you and we, and the fence post, Ben will need at least $5 trillion for monetization. What is being done is to cover debt and save the financial system, not to revise the economy. At the same time, as you have gotten a taste of this week, the dollar was hit very hard. Also on the agenda is hyperinflation. We predicted this in 9/04 and here it is.

These policies will continue to extend the time line for a collapse. Even Alan Greenspan says $1 trillion is not enough to remedy the financial system and economic ills. Here we are on the threshold of going Weimar, as free trade and globalization, collapses perpetual currency devaluations take place and virulent inflation stalks the world, a hyperinflation that will destroy all but the very rich, who will in the end beg for their lives.

Mr. Bernanke knows all about Weimar, Argentina and other Latin experiments that were disasters. All similar to what we see in America today. Trying to overcome deflation with inflation is like shoveling sand against the tide. More and more holders of US Treasuries and new buyers are walking away just like they are walking away from Fannie Mae and Freddie Mac bonds.

The idiot builders are at it again. Lots of condos will hit the market this year, as Fannie Mae has added new restrictions. They won’t guarantee condo buildings where less than 70% have been sold, up from 51%. They won’t back loans for sales where 15% of current delinquencies on association fees or where more than 10% of units are owned by single-entity.

Bill Gross, Chief Investment Officer at PIMCO says the Fed’s purchase of Treasuries and toxic mortgage garbage will probably exceed $6 trillion.

As we have said before the so-called solutions are being performed by the same criminals who caused all these problems in the first place. All we see is compounding problems. It is incredible that the central bank has not been held accountable. Washington’s fiscal policy and the policies of the privately owned Fed are completely out of control. The only real objective of Treasury and the Fed is to save the cabal that really controls our existence and that is Wall Street, banking and insurance.

Our money Masters tell us there is little inflation and they supply us with bogus statistics to prove it. They tell us the trillions in guaranteed government debt will not cause inflation, which currently is 9% to 10%, and is headed toward Weimar proportions. In three months it will be two years since the beginning of the collapse. They talk about a short problem when it is already long term and it could last a score of years. None of the problems we have cited in the past have been adequately dealt with. It is all patch work and Rube Goldberg solutions. There is no longer a standard. The dollar is about to collapse and a basket of fiat currencies won’t do any better. Low interest rates compound the problem. Who wants to save? Inflation is 10% and interest is 2% or 3%. The whole marketplace is distorted by zero interest rates. This is all Ponzi finance and it can come to no good end.


The big Tocom gold shorts increased net shorts by 987 to 12,248, as they increased their new silver shorts by 34 to 42 contracts.

JP Morgan Chase has OTC derivatives in gold of $94.589 billion, or 99.392% of the total. This is from government reports. Six months have passed and the CFTC says they still are investigating. It is obvious there is manipulative concentration.

The CFTC reports in silver 88% of derivatives are controlled by two banks.

150% of annual production, as a result silver prices are long and few miners can make money due to the manipulation.


Bankruptcies in Hong Kong soared as the city’s recession deepened, reaching the highest level since the aftermath of the SARS epidemic in 2003.

There were 1,500 bankruptcy petitions filed in February, up from 1,266 in January, the Official Receiver’s Office said on its Web site yesterday. Filings last month were the highest since October 2003, after severe acute respiratory syndrome caused the city to slide into its last recession.

The economy will probably shrink 2 percent to 3 percent in 2009, after a 2.5 percent expansion last year, Financial Secretary John Tsang forecast in his budget speech on Feb. 25. Unemployment rose to 5 percent in the three months through February, the highest level in 32 months.

The number of bankruptcy petitions increased to 11,620 last year from 10,918 in 2007.

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