In
truly perverse fashion, only in America, the USDollar is rallying as a prelude to a US
financial system breakdown. Call it a blowoff top! The Wall Street carnival seems to celebrate anything to lift the USDollar, even recession and the death knell for USTreasurys. Nationalization is never a positive for
financial prospects. A powerful reversal comes when intervention ammunition
wanes and the reality of US bank system implosion returns. The rally could
reach the 82 mark, if the reversal pattern reaches full completion. The three
major factors pulling the US$
down are the bank losses, the housing decline, and the job loss situation. Nothing
has changed with these factors, except they have worsened!
My
position is unshakable. The financial structure of the Untied States is
besieged by powerful bankrupt insolvencies. 1) USGovt
federal deficits are exploding, from war, from handouts, from recession, from
bailouts. 2) US
trade deficits are chronic and have risen over $60 billion monthly, soon to
worsen from the US$
rise rendering harm to exports. 3) US
banks are insolvent, with congames the only force
forestalling bankruptcy as they continue to distort their balance sheets,
while showing inability to raise needed cash in their replenishment. 4) US
homeowners are now increasingly living with loans that reflect negative
equity, as the proportion sits around one third in such upside-down living
rooms. In the next few months, all four wrecked pillars will worsen
dramatically. Fundamentals drive the USDollar
lower. An assault on the USTreasurys will put the US$
into No Man’s Land.
The
most dangerous reaction investors can make now is to believe the USDollar has begun a major new upleg.
The second most dangerous reaction is to sell gold or silver into this climax
of fraud, manipulation,
bankruptcy, and protected larceny. The sun is soon to set on the Fascist
Business Model network. Those who put leverage into their portfolios have
forfeited their freedom to hold. The father of a friend down here in half
sunny, half rainy Costa Rica
just lost his $250k silver account. He had told me of his father’s
strong belief in silver and the wrecked US$ condition, but he was not even
aware that his father had a silver futures account, not physical silver
bullion or coins. He owned paper silver, bound by the illusion of wealth. Now
Dad has no silver at all, as he liquidated after a few margin calls. A piece
of the inheritance is gone. My Dad has significant bank deposits, which might
be under a different strain as banks drop like flies this winter. My advised
strategy since the beginning of the year has been to hold silver or gold in
physical form, for at least one third of accounts, maybe more.
The
uplift coming this autumn and
winter will be historic, as new chapters will be written on the global
financial rehabilitation and remake. The world is planning the post-US era,
amused by the celebration taking place on Wall Street. It will wind down soon
enough. The next chapter will be characterized by isolation, retribution, receivership,
dismissed government, overriding supply contracts, and redrawn lines.
LICENSE
TO STEAL
A
time limit has been granted, with high likelihood via order given by the most
powerful bank in the world. The US has been ordered to bring its
bonds home, to be buried under an avalanche of nationalized debt, foreign
vengeance, and bank system collapse. During that period of time, Wall
Street has been given a free ride, a blank check, a
certificate of impunity, to rig markets for their own gain, to pull credit
from client accounts for their own gain, to do whatever they can to force
liquidation of positions, to basically rape & pillage private accounts. The
fraud has been protected by
regulators at the Securities & Exchange Commission and the Commodity
Futures Trading Commission, each staffed by Wall Street mafiosi.
They are taking full benefit of the granted OPEN WINDOW TO STEAL, pulling
gold below 750 and pulling silver below 11. The total split, the bifurcation
described last week, has become even more laughable,
stark, and obvious of Wall Street corruption of the precious metals market. The
gold & silver owned (on paper) by folks has been taken. Since through
corruption of the precious metals market, where supply is largely
unavailable, call it theft, robbery, larceny. Call a spade a spade! Wall
Street loves an investor panic. Do not give it to them. What infuriates me is
the impunity. Wall Street firms have a license to corrupt markets and take
money from people and businesses, as they are forced into liquidation or
shrunk positions, often with credit pulled tactically. The regulators are
sitting on their hands, permitting it all during this
climax events of a fiesta. Banksters at the
BIS are taken care of banksters inside the Untied
States. A climax of theft is nearing an end.
THE
DOOR SHUTS VERY SOON
On
the week of September 15 thru 19, some initial events are anticipated to
occur. An important event schedule will be initiated. The party and
celebration and corrupt raids should come to an end abruptly. Many possible
events are offered in conjecture in the September Hat Trick Letter, due out
late this weekend. In all, 13 powerful shock wave events are suggested as
possible. Foreigners are watching the tainted party, viewing it as staged
atop the heavily listing Titanic vessel. The four pillars of insolvency, plus
the looming credit derivative roof crumple, seem not to matter. The entire
global playing field, related to commerce and finance, is soon to be reshaped,
with the Untied States becoming a bit player, or not invited. The turkey
carving is nigh.
When
the events begin to unfold, one event will lead to another. Just like the
Iraq War, a schedule does not adhere to a calendar, but rather to events. One
event leads to released new pressures, factors to be made clear, obstacles to
be removed (possibly forcibly), and the next event unfolds. My view of the
sequence very simple is to reveal the big picture, RECEIVERSHIP &
DEFAULT. The gold & silver prices will rocket higher. Part of the
event schedule, down the road in time, not at an early stage, is the launch of the gold-backed Russian currency and the
gold-backed Gulf dinar. These are not new news items, but well advertised and
fully ignored by a dismissive US failing financial fortress. The gold &
silver prices have become laughable.
Very little supply was available in the low 800s for gold. Very little supply
was available at 13 for silver. Now prices are lower. One should try to
imagine the building rage by angry foreign owners of physical gold &
silver, who look at the price schemes dominated by paperhangers on Wall
Street, who use the printing press and electronic switchboards to create new
counterfeit supply to sell. Foreigners seek justice, to stem the corruption,
to stem the threat to global stability, both financially and militarily. Do
Americans have much of any idea of the foreign perspective? Do they know
about violated NATO treaties, and poking the Russian bear with sharp sticks
repeatedly? Americans are soon to be given a fresh course in receivership. The
opening salvo was Fannie Mae and the fat little brother Freddie Mac. Never in
modern history has a widened pattern of nationalization been favorable to a currency!
Note
that the Credit Default Swap on
the USTreasury Bond itself has moved up 3.5 basis
points in the last week to a record 18 basis points. In April it was 6 bpts. This is record
territory. German Bund CDSwap protection costs only
8 bpts. The USTBonds have
suffered from greater risk after assuming the Fannie & Freddie risk. The
risk of USTBond default
is next. Watch the CDSwap continue to rise, as the
rest of the bailout candidates knock at the door. The precedent has been set.
The door is open. The die has been cast toward deep decay of socialism. Add
to insolvency exported fraud and
aggressive military behavior, and the prescription for foreign reaction is huge. It is
coming!
US
BANKS READY FOR NEXT SHOCK
The
end of the third quarter is coming, less than three weeks away. In Q2 the investment
community was told that first quarter bank losses were the peak. Early in Q3,
the investment community was told that again, bank losses had peaked, the
worst behind us, the solutions have been forged. What a continuing crock! As
we come toward the end of Q3, losses previewed by JPMorgan and Lehman
Brothers will serve as opening salvos. Much worse news comes. Over a month
ago, my chart analysis suggested the BKX bank stock pattern might soon reveal
a pennant pause pattern as the
quarterly end approached. We are here. The triangle pennant is forming,
although it is a clear one. While all eyes are on Lehman, the big failure is
likely to be Merrill Lynch. Both firms have failed to find idiots in SKorea to bail them out. The discovery phase was way too
ugly, and they were too smart. Next the banksters
from New York
will turn to severe accounting distortions, sleight of hand, and other
devious deceptions. The Lehman quarterly report was the biggest disaster
imaginable, even though it was loaded with garbage methodology laced with hokus pokus. The last resort is
liquidation, the dread by Wall Street banksters,
since one failure could easily result in another rapidly. A liquidation fire
sale of Lehman assets lies directly ahead, a huge
threat to the congame. The Wall Street firms, since
the Bear Stearns kill job, are all aligned in similar fashion, long US$, long
USTBonds, short gold, short silver. A liquidation would force a big move in the reverse
direction.
The
latest economic myths are two: the USDollar is
stronger and price inflation is gone. Neither is true. The foreign currencies
have moved down, as their economies have slowed, as their own bank distress
is evident. The US$
is a giant beneficiary of global debt liquidation, hardly a strength. The
US$
rally is actually a signal of its imminent implosion or disappearance.
As for price inflation, it is raging at 12.5% from the 2Q2008 according to
Shadow Govt Statistics. The official heavily distorted CPI has posted back to
back months above 5%. Suppressing the gold price via paper games does not
constitute a repeal of price inflation. The biggest story on the price
inflation front is the nationalization bailout of Fannie & Freddie
mortgage giants. Even with no additional bailout beneficiaries (losers) such
as General Motors or airline firms
or even Citigroup, the price inflation inside the USEconomy
will be magnificent next year. Some analysts expect the doctored CPI to rise
above the 10% level.
Higher
prices could come from storm effects. Hurricane Gustav inflicted some damage,
but nothing significant. Hurricane Ike heads toward the heart of the oil
platforms in the Gulf of Mexico, due to hit
this weekend. Storm surge waves of over 15 feet (five meters) are
forecast between Galveston and Houston Texas.
Next year, look for a parade of lawsuits to be delivered as further tidal
wave assaults on Wall Street. The
Auction Rate Security case, successfully won, was just the beginning. In one
year, look for most Wall Street firms to disappear. They have no business
left, only managing liquidation, directing accounting fraud, and soliciting sucker bagholders
to donate to their corrupt cause. This
picture aint New
York City, but it don’t
look good.
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Jim Willie CB
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