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November 10, 2009: The Real Deal by Dean LeBaron, CFA, Walter Deemer and Mark Ungewitter... This enlightened paper is a MUST READ

"It is doubtful that long-term investors have any real intent of accepting a 2.5% yield over the next 30 years on Treasury securities having, if not default risk, substantial risk of price volatility. Accordingly, investors must believe that they will have the ability to hold these securities for a rewarding short-term holding period, and then sell them to someone else before prices drop. This is a mentality that we periodically observe in stocks during bubble periods, prior to massive corrections, but is one that we rarely observe in bonds." � John Hussman, Money Manager

February 24, 2010: Compliments of Bloomberg... Ballooning debt is likely to force several countries to default and the U.S. to cut spending, according to Harvard University Professor Kenneth Rogoff, who in 2008 predicted the failure of big American banks.

Following banking crises, �we usually see a bunch of sovereign defaults, say in a few years,� Rogoff, a former chief economist at the International Monetary Fund, said at a forum in Tokyo yesterday. �I predict we will again.�

The U.S. is likely to tighten monetary policy before cutting government spending, sending �shock waves� through financial markets, Rogoff said in an interview after the speech. Fiscal policy won�t be curbed until soaring bond yields trigger �very painful� tax increases and spending cuts, he said.

Global scrutiny of sovereign debt has risen after budget shortfalls of countries including Greece swelled in the wake of the worst global financial meltdown since the 1930s. The U.S. is facing an unprecedented $1.6 trillion budget deficit in the year ending Sept. 30, the government has forecast.

�Most countries have reached a point where it would be much wiser to phase out fiscal stimulus,� said Rogoff, who co-wrote a history of financial crises published in 2009. It would be better �to keep monetary policy soft and start gradually tightening fiscal policy even if it meant some inflation.�

Failed Marriage

Rogoff, 56, said he expects Greece will eventually be bailed out by the IMF rather than the European Union. Greece will probably announce an austerity program �in a few weeks� that will prompt the EU to provide a bridge loan which won�t be enough to save the country in the long run, he said.

�It�s like two people getting married and saying therefore they�re living happily ever after,� said Rogoff. �I don�t think Europe�s going to succeed.�

Investors will eventually demand higher interest rates to lend to countries around the world that have accumulated debt, including the U.S., he said. The IMF forecast in November that gross U.S. borrowings will amount to the equivalent of 99.5 percent of annual economic output in 2011. The U.K.�s will reach 94.1 percent and Japan�s will spiral to 204.3 percent.

January 15, 2010: The piece below is from a very astute analyst, Dr. John Hussman of the Hussman Funds...

There's no denying that the beliefs of investors have been far more important, in the intermediate term, than economic realities, which are revealed more slowly and sporadically. Yet despite the high level of bullishness here, the market has gained only a few percent beyond its September highs. Most of what we are seeing now is a tendency to make marginal new highs, back off slightly, and then recover that ground enough to register another marginal new high. As I've noted frequently, when market conditions are characterized by unfavorable valuations, overbought conditions, over bullish sentiment, and upward yield pressures, the market's tendency is exactly that - to make continued marginal new highs for some period of time, followed by abrupt and often steep losses virtually out of nowhere.

January 15, 2010: Compliments of Bloomberg... Japan�s top diplomatic priority is strengthening an alliance with a U.S. administration that is engaged in Asia and can help counter China�s military build-up, Foreign Minister Okada said in an interview.

"I knew our miliary-industrial complex needed a new enemy. For a while I thought it would be Russia. I was wrong. It's clearly going to be our largest creditor -- China. Hey, here's an idea; a big war would send millions of Americans back to work." Richard Russell

January 11, 2010: Investment Outlook... Let�s Get Fisical by Bill Gross

"To a suggestion that the government shall set its printing presses free and flood the country with fiat money, all our economic intelligence reacts with NO. Only those will say yes who are mentally or politically unsound. And if a government is obliged by vote of the unsound to do it, then everybody, including the unsound, will begin to hoard gold because gold is the one kind of money no government can make or dilute." �
- Garet Garrett, A Bubble That Broke the World, June, 1932

"Question: What has become of the American nation? Conceived with the vision of liberty and justice for all, we have descended in the clutches of corporate and other special interests to a second world state defined by K Street instead of Independence Square. Our government doesn�t work anymore, or perhaps more accurately, when it does, it works for special interests and not the American people. Washington consistently stoops to legislate 10,000-page perversions of healthcare, regulatory reform, defense, and budgetary mandates overflowing with earmarks that serve a monied minority as opposed to an all-too-silent majority. You don�t have to be Don Quixote to believe that legislators � and Presidents � often do not work for the benefit of their constituents: A recent NBC News/Wall Street Journal poll reported that over 65% of Americans trust their government to do the right thing �only some of the time� and a stunning 19% said �never.� What most politicians apparently are working for is to perpetuate their power � first via district gerrymandering, and then second by around-the-clock campaigning financed by special interest groups. If, by chance, they�re ever voted out of office, they have a home just down the street � at K Street � with six-figure incomes as a starting wage.

"What amazes me most of all is that politicians can be bought so cheaply. Public records show that combined labor, insurance, big pharma and related corporate interests spent just under $500 million last year on healthcare lobbying (not much of which went to politicians) for what is likely to be a $50-100 billion annual return. The fact is that American citizens have never been as divorced from their representatives � and if that description fits the Democratic Congress now in control � then it applies to Republicans as well � past and present. So you watch Fox, or is it MSNBC? O�Reilly or Olbermann? It doesn�t matter. You�re just being conned into rooting for a team that basically runs the same plays called by look-alike coaches on different sidelines. A �ballot box� pox on all their houses � Senators, Representatives and Presidents alike. There has been no change, there will be no change, until we the American people decide to publicly finance all national and local elections and ban the writing of even a $1 check for our favorite candidates.

"If 2008 was the year of financial crisis and 2009 the year of healing via monetary and fiscal stimulus packages, then 2010 appears likely to be the year of �exit strategies,� during which investors should consider economic fundamentals and asset markets that will soon be priced in a world less dominated by the government sector. If, in 2009, PIMCO recommended shaking hands with the government, we now ponder �which� government, and caution that the days of carefree check writing leading to debt issuance without limit or interest rate consequences may be numbered for all countries."

January 10, 2010:

"Chart of the Day produced the attached graph [below] that illustrates the percentage increase in the number of jobs for every decade since the 1940s (the data goes back to 1939). As shown, the number of jobs at the end of a decade has been anywhere from 20% to 38% greater than ten years prior. However, the decade just ended turned out to be the exception with essentially no job gains.This subpar job growth is particularly noteworthy due to the fact that the US population has increased by 10% in addition to a significant increase in global wealth during the same time frame."

January 6, 2010:
Robert Rubin Speaks�Former Secretary of the Treasury Robert Rubin, now co-chairman of the Council on Foreign relations, made some interesting comments recently on the state of the U.S. Government bond market and the effects which massive ongoing budget deficits may have. Here is the quote. �The United States faces projected 10-year federal budget deficits that seriously threaten its bond market, exchange rate, economy, and the economic future of every Americanworker and family. Those risks are exacerbated by the context of those deficits: a low household-savings rate, even after recent increases; large funding requirements for federal debt maturities every year; heavy overweighting of dollar-denominated assets in foreign portfolios; worsened fiscal prospects in the decades after the current 10-year budget period; and competing claims for capital to fund deficits in other countries. The conventional concern here is that private investment will be crowded out, which would result in a reduction of productivity, competitiveness,
and growth. In addition, the very early 1990s showed that unsound fiscal conditions can have a symbolic effect that broadly undermines business and consumer confidence. But finally, and far more dangerously,
our bond and currency markets could react with severe distress to fears about imbalances in the supply and demand for capital in the years ahead or about the possibilities of inflation. Those effects have been averted so far by a number of factors: large inflows of capital from abroad into Treasury securities; concerns about other major currencies; the low level of private demand for capital; and the psychological state of the market. But this cannot continue indefinitely, and change can occur with great force�and unpredictable
timing.�

January 4, 2010:
An act of desperation --

The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac. The Treasury Department said Thursday it removed the $400 billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair, and a senior Treasury official said losses are not expected to exceed the government's estimate this summer of $170 billion over 10 years. Treasury Department officials said it will now use a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors. Under the formula, financial support would increase according to how much each firm loses in a quarter. The cap in place at the end of 2012 would apply thereafter. By making the change before year-end, Treasury sidestepped the need for an OK from a bailout-weary Congress. While most analysts say the companies are unlikely to use the full $400 billion, Treasury officials said they decided to lift the caps to eliminate any uncertainty among investors about the government's commitments. But the timing of the announcement on a traditionally slow news day raised eyebrows. "The companies are nowhere close to using the $400 billion they had before, so why do this now?" said Bert Ely, a banking consultant in Alexandria, Va. "It's possible we may see some horrendous numbers for the fourth quarter and, thus 2009, and Treasury wants to calm the markets." - Yahoo News

January 4, 2010

Last day of the year quotes (spot gold).

2000 -- $273.60
2001 -- $279.00
2002 -- $348.20
2003 -- $416.10
2004 -- $438.40
2005 -- $518.90
2006 -- $638.00
2007 -- $838.00
2008 -- $889.00
2009 -- $1096.50

January 2, 2010:

December 31, 2009:

December 29, 2009: Richard Russell tells it like it is... " It's easy to be deceived by the near-term picture. By that I mean it's easy to lose perspective when you are struggling with the daily and even the weekly market action. Over the long-term, the big fundamental picture will often reveal itself. For instance, consider this. In January 2000, the Dow was selling for just over 11000. At the same time gold was selling for about $280 an ounce. Today the Dow is selling for about 10500, actually below its year 2000 price. Gold is selling for over 1100, four times its year 2000 price.
So what does that tell us? Gold has represented the standard for wealth for over 5000 years. Consequently the above tells us that the Dow and the stock market have failed to conserve our wealth."

December 2, 2009: Compliments of the UNIVERSITY OF CALIFORNIA PRESS, (1990) Historical Economics... Art or Science? by Charles P. Kindleberger,
Professor of Economics Emeritus, Massachusetts, Institute of Technology

December 1, 2009: Compliments of Richard Russell and The Dow Theory Letters... "Few Americans know of the betrayal that was plotted on Jekyll Island, Georgia"

November 29, 2009: Compliments of TheOilDrum.com... Dubai's Debt Troubles: Beginning of the Next Leg Down? by Gail the Actuary

November 27, 2009: Gold is about 52% higher than the peak weekly average price of January 1980. The US CPI is 177% higher, US M-2 Money Supply is 464% higher, and the S&P is 892% higher. I don't think it untoward to suggest gold is badly lagging a number of important yardsticks and at theses levels has some catching up to do." From Ian McAvity's DELIBERATIONS (Iris Ltd., PO Box 40097, Tucson, AZ 85717)

November 26, 2009:

November 25, 2009: Compliments of Reuters Beijing... Hold Your Nose: Garlic Is Best Investment in China

November 21, 2009:
Just in case there is still any confusion about the size of the Wall Street's lobby tsunami (and the implication of what happens to politicians' wallets without it),
here is a comprehensive overview by Bloomberg. In brief, as Shopyield points out:
Citigroup - 46 lobbyists
Chamber of Commerce - 46 lobbyists
American Bankers Association - 44 lobbyists
Prudential - 41 lobbyists
SIFMA - 36 lobbyists
Managed Funds Association - 31 lobbyists
Goldman Sachs - 29 lobbyists
American Insurance Association - 29 lobbyists
Charles Schwab - 28 lobbyists
Investment Company Institute - 28 lobbyists

Industry total = 1479 lobbyists
Consumer total = 58 lobbyists

November 20, 2009: If the U.S. dollar were back on the gold standard, notes Soci�t� G�n�rale analyst Dylan Grice, then gold would have to be priced at $7,648 an ounce in order to fully back all of the dollars in circulation. That calculation is based on the U.S. monetary base of nearly $2 trillion and U.S. government gold holdings of 261.5 million ounces.

November 19, 2009: Compliments of Global Research and Rabble.ca... Canada's Sub-Prime Mortgage Time Bomb by Murray Dobbin
Ottawa: The biggest sub-prime lender in the world MUST READ

November 16, 2009: Compliments of Prudentbear.com... Waiting for the train-wreck by Martin Hutchinson MUST READ

November 11, 2009: Compliments of Bloomberg... By Zijing Wu

Gold won�t fall below $1,000 an ounce again after rising 27 percent this year to a record as central banks print money to help fund budget deficits, said Marc Faber, publisher of the Gloom, Boom & Doom report.

The precious metal rose to all-time highs in New York and London today as the dollar weakened. The Dollar Index, a gauge of value against six other currencies, has declined 7.9 percent this year and today fell to a 15-month low. News last week of bullion purchases by the Indian and Sri Lankan governments raised speculation that other countries would follow suit.

�We will not see less than the $1,000 level again,� Faber said at a conference today in London. �Central banks are all the same. They are printers. Gold is maybe cheaper today than in 2001, given the interest rates. You have to own physical gold.�

China will keep buying resources including gold, he said.

�Its demand for commodities will go up and up and up,� he added. �Emerging economies will grow at the fastest pace.�

In contrast, Western countries will be lucky to avoid economic contraction, while the Federal Reserve will maintain interest rates near zero percent, he said.

November 14, 2009: The Wall Street Prayer...

Our Chairman,
Who Art At Goldman,
Blankfein Be Thy Name.
The Rally's Come. God's Work Be Done
On Earth, As There's No Fear Of Correction.

Give Us This Day Our Daily Gains,
And Bankrupt Our Competitors
As You Taught Lehman And Bear Their Lessons.
And Bring Us Not Under Indictment.
For Thine Is The Treasury,
The House And The Senate,
Forever And Ever.
Goldman

November 11, 2009: Compliments of Casey Research... How will Niagara Falls fit through a garden hose?

November 8, 2009:

November 8, 2009: Compliments of iTulip.com... Gold update: Gold over $1000 and still no gold bubble by Eric Janzen

November 6, 2009: Compliments of The Telegraph... Bank of England says financiers are fuelling an economic 'doom loop' by Edmund Conway, Economics Editor

October 24, 2009: MEMORANDUM FOR THE PRESIDENT: FROM: Arthur F. Burns; June 3, 1975 - NEW... MUST READ

October 15, 2009:

Fuels
Crude oil.....+78.5
Ethanol (gal.)..... +16.5%
Heating oil (gal.)..... +45.6
Natural gas.....-14.0
Unleaded gas.....+96.8

Metals
Gold.....+19.7
Silver.....+56.3
Platinum.....+45.1
Copper.....+111.2
Palladium.....+76.9

Agriculture
Cattle.....+0.8
Coffee.....+28.8
Corn.....-5.1
Cotton.....+35.7
Lumber.....+5.1
Orange Juice.....+67.6
Soybeans.....+2.5
Wheat.....-15.3

October 15, 2009: Below from the DailyTelegraph by the brilliant Ambrose Evans-Pritchard.

You can date the end of dollar hegemony from China's decision last month to sell its first batch of sovereign bonds in Chinese yuan to foreigners.

Beijing does not need to raise money abroad since it has $2 trillion (�1.26 trillion) in reserves. The sole purpose is to prepare the way for the emergence of the yuan as a full-fledged global currency.

"It's the tolling of the bell," said Michael Power from Investec Asset Management. "We are only beginning to grasp the enormity and historical significance of what has happened."

It is this shift in China and other parts of rising Asia and Latin America that threatens dollar denomination, not the pricing of oil contracts. The markets were rattled yesterday by reports � since denied � that China, France, Japan, Russia, and Gulf states were plotting to replace the Greenback as the currency for commodity sales, but it makes little difference whether crude is sold in dollars, euros, or Venetian ducats.

What matters is where OPEC oil producers and rising export powers choose to invest their surpluses. If they cease to rotate this wealth into US Treasuries, mortgage bonds, and other US assets, the dollar must weaken over time.

"Everybody in the world is massively overweight the US dollar," said David Bloom, currency chief at HSBC. "As they invest a little here and little there in other currencies, or gold, it slowly erodes the dollar. It is like sterling after World War One. Everybody can see it's happening."

"In the US they have near zero rates, external deficits, and public debt sky-rocketing to 100pc of GDP, and on top of that they are printing money. It is the perfect storm for the dollar," he said.

October 13, 2009: Excerpt from the Dow Theory Letters... Compliments of Richard Russell
September 28, 2009:President Obama promises to cut spending in the US. But can he? Read this column out of Forbes by Bruce Bartlett, former Treasury Dept. economist -- "Whenever I write about the federal deficit, some nitwit always demands to know why we don't just cut spending," says Bruce Bartlett. "Here is the simple, if unsatisfying, answer. We can't. Nearly two-thirds of spending -- 62% is mandatory, entitlements and interest on the debt. The defense budget -- which will never be cut substantially, -- consumes more than half of what remains, leaving a total of $485 billion for everything else. Given a deficit of $459 billion last year, a balanced budget would require the elimination of virtually every single domestic program, including all social programs, education, highways, border patrols, air traffic control, and the FBI. The only alternative is to reduce mandatory spending on Medicare and Social Security -- and good luck with that. The elderly will fight anyone who tries to cut their benefits, even as they hypocritically demand fiscal responsibility. And seniors' political power will only get stronger, as baby boomers get old. Face it, if the US ever stops running a deficit, it won't be because Congress made massive cuts in federal spending. The votes aren't there, and never will be."

September 24, 2009: The Real (and Untold) G-20 Story by Byron King

I think that the big news will happen near the old coal mining town of Nemacolin.

About 70 miles southeast of Pittsburgh, near Uniontown (birthplace of George C. Marshall), the five-star resort at Nemacolin Woodlands is 100% booked. The Chinese are staying there. Just to be on the safe side, the state police are closing major roads for 10 miles in each direction. Access will be via helicopter to and from the Nemacolin airstrip. My informants tell me that quite a bit of the nitty-gritty of the G-20 will occur at remote Nemacolin, far from the street protesters who have showed up to camp in Pittsburgh.

My bet is that the biggest news to happen at the G-20 will happen there, but it won�t get reported, or won�t get reported in the way it deserves.

The news will be about how the Chinese and the International Monetary Fund have agreed on a sale of IMF gold to the Chinese state treasury. It�ll be 400 tonnes. It�ll increase Chinese state reserves by 40% overnight. The mainstream media will say nary a word.

But if you�re an Outstanding Investments reader, you know what I mean. I don�t even have to explain it to you. Yep. 400 tonnes. We�ll see.

September 23, 2009:

FROM THE MYTHICAL SCHULICH SCHOOL OF PUBLIC POLICY

Q. What is an Economic Stimulus payment?
A. It is money that the federal government will send to taxpayers.

Q. Where will the government get this money?
A. From taxpayers.

Q. So the government is giving me back my own money?
A. Only a smidgen.

Q. What is the purpose of this payment?
A. The plan is for you to use the money to purchase a high-definition TV set, thus stimulating the economy.

Q. But isn't that stimulating the economy of China ?
A.   Shut up.

Below is some helpful advice on how to best help the Canadian economy by spending your stimulus check wisely:

A. If you spend the stimulus money at Wal-Mart, the money will go to China .
B. If you spend it on gasoline, your money will go to the Arabs.
C. If you purchase a computer, it will go to India.
D. If you purchase fruit and vegetables, it will go to Mexico, Honduras and Guatemala .
E. If you buy a car, it will go to Japan or Korea.
F. If you purchase useless stuff, it will go to Taiwan
G. If you pay your credit cards off, or buy stock, it will go to management bonuses and they will hide it offshore.

Instead, keep the money in Canada by:

1      spending it at yard sales, or
2      going to ball games, or
3      spending it on prostitutes, or
4      beer or
5      tattoos.

(These are the only Canadian businesses still operating in Canada)

Conclusion:

Go to a ball game with a tattooed prostitute that you met at a yard sale and drink beer all day.

September, 2009:... something to think about as you move into weekend rejuvenate mode:

#1 It took over 2.75 years to rally 60% from the October 2002 lows... we did not see a 60% gain until July 2005. We've repeated that performance in less than 6.5 months in 2009!

#2 If the market rallies at the same pace in the future as it has the past 6.5 months, the market will surpass all time highs by February 2010. All time high on S&P 500 is 1565. If we repeat the same 60% gain of the past 6.5 months in the next 6.5 months (taking us to March 31st, 2010) we'd be at S&P 1715.

.... almost unbelievable .... amazing numbers!

September 18, 2009: Compliments of Mark... If the crisis is �over,� why do foreign investors continue to sell US agencies in favor of Treasuries?

September 17, 2009:
Foreign investors are abandoning the dollar in droves.

Anyone who buys long-term U.S. treasuries these days is virtually begging to get his head handed to him for three very simple reasons:

FIRST, long-term treasuries are paying bupkis. To many, tying up money for 30, long years in return for a paltry 4.2% yield isn�t an investment decision; it�s an IQ test.
SECOND, foreign investors aren�t blind, deaf or dumb: They know full well that U.S. deficits and debt are exploding. And they�re also keenly aware that Bernanke�s secret debt solution means the yield they earn in those treasuries will be worth much less with each passing year � as the dollar continues to fall in value.
AND THIRD, the sheer size of Washington�s debt has many foreign investors wondering if long-term U.S. treasuries really are a prudent investment in the first place. As our national debt continues to explode, so does the risk that at some point, Washington may have no choice but to default on that debt.

September 11, 2009: Compliments of Richard Russell... It's Friday, and the miracle -- gold finally blows past its manipulators to close above the psychological level of $1000. But wait -- the bonds are holding.
The Fed can continue to vomit out fiat currency until the bond market says, "Stop, that's enough."

September 7, 2009: Compliments of The Telegraph... Interest rates 'could rise sharply early next year'
Interest rates could start to rise early next year � and by more than in previous cycles, according to an economist at a City fund manager by Richard Evans

September 7, 2009: Compliments of The Telegraph... China, Bernanke, and the price of gold by Ambrose Evans-Pritchard - NEW

September 1, 2009: To listen to John Budden's Business@Night interview with John Embry on CFRA... Aired on 2/09/2009 - NEW

September 2, 2009: Let me get this straight -- Obama's health care plan will be written by a committee whose head says he doesn't understand it, passed by a Congress that hasn't read it, and whose members are exempts from it, signed by a president who smokes in secret, funded by a treasury chief who did not pay his taxes, overseen by a surgeon general who is obese, and financed by a country that is broke.

August 27, 2009: Compliments of Richard Russell

Niall Ferguson, MA, D.Phil., is Laurence A. Tisch Professor of History at Harvard University and William Ziegler Professor of Business Administration at Harvard Business School. He is also a Senior Research Fellow at Jesus College, Oxford University, and a Senior Fellow at the Hoover Institution, Stanford University.

I want to include a few paragraphs from a most important article by the brilliant Niall Ferguson, author of "The Ascent of Money, A Financial History of the world." Ferguson's article is about the coming "divorce" between the US and China. I believe the future of the world will revolve around the relationship of US and China. The Ferguson article appeared in Newsweek magazine (Aug. 21) and is entitled, "Chimerica Is Headed For Divorce." And I quote --

"Let's look at the numbers. China's holding of US Treasuries rose to $801.5 billion in May, an increase of 5% from the $763.5 billion in April. Call it $40 billion a month. And let's imagine the Chinese do that every month through this fiscal year. That would be a credit line to the US government of $480 billion. Given that the total US deficit is forecast to be about $2 trillion, that means the Chinese may finance less than a quarter of total Federal-government borrowing -- whereas a few years ago they were financing virtually the whole deficit.

"The trouble is that the Chinese clearly feel they have enough US government bonds. Their great anxiety is that the Obama administration's very lax fiscal policy, plus the Federal Reserve's policy of quantitative easing (in laymen's terms, printing money) are going to cause one of two things to happen: the price of US bonds could fall and/or the purchasing power of the dollar could fall. Either way, the Chinese lose. Their current strategy is to shift their purchases to the short end of the yield curve, buying Treasury bills instead of 10-year bonds. But that doesn't address the currency risk. In a best-selling book titled Currency Wars, Chinese economist Song Hongbing warned that the US has a bad habit of stiffing its creditors by letting the dollar slide. This, he points out, is what happened to the Japanese in the 1980s. First their currency strengthened against the dollar. Then their economy tanked.

"What is China's alternative if it seeks a divorce from America? Call it the empire option. Instead of continuing in this unhappy marriage, the Chinese can go it alone, counting on their growing economic might (according to Goldman Sachs, China's GDP could equal that of the US by 2027) to buy them global power in their own right. In some ways, they've already begun doing this. Their naval strategy clearly implies a challenge to US hegemony in the Asia-Pacific region. Their investments in African minerals and infrastructure look distinctly imperial too. And now the official line from Prime Minister Wen Jiaobao is to hasten the implementation of our 'going out' strategy and combine the utilization of foreign-exchange reserves with the 'going out' of our enterprises. That sounds like a Chinese campaign to buy foreign assets -- exchanging dodgy dollars for copper mines."

Russell Comment -- I believe the above is a brilliant look at our international future. No nation (the US) can be both the world's leader and world's biggest debtor. In his fight to thwart the bear market, Bernanke is sowing the seeds for the future demise of the United States. The law of unintended consequences is about to become operative.

A huge problem ahead is this -- will the dollar decline slowly, as it has been doing, or will the dollar crash, setting off a world crisis?

Prediction -- Where ever you are now will be your best situation for years to come. The trick ahead will be to hold on to what you have. I've been warning that a "hard rain is a'coming." So far, we've only experienced a drizzle.

August 26, 2009: Marc Faber on Lateline Business

August 26, 2009: SAN FRANCISCO (MarketWatch) -- An indicator of investor sentiment on Wednesday hit 2007 levels that some strategists say signal the recent U.S. stock rally may be ready for a pullback after a 16% run since mid-July. The Investors Intelligence Advisors Sentiment Index, which gauges the stock advice of about 150 newsletters and other paid market-advice outlets, said bulls jumped to 51.6% in the recent week, the highest since the end of 2007. Bears fell to 19.8%, the first time since October 2007 that the percentage fell below 20%. Earlier this week, Bank of America Securites-Merrill Lynch analyst Mary Ann Bartels said she was watching the bear percentage breaking 20% for signs of an intermediate market top.

August 17, 2009:

Compliments of Richard Russell... Yes, this is an historic time of change. Debt is piling ever-higher, deflation and world over-production are driving prices down, and many people fear that the "American way of life" is being lost.

Lost? How can it possibly be lost? Here are some figures from Barron's.

$180.7 billion -- Federal deficit for July.
$1.27 trillion -- Total deficit so far in 2009, a record.
$332.2 billion -- Government spending in July, a record for any month in US history.
$151 .5 billion -- US government receipts for the month of July.
5.6% -- decline in monthly receipts from a month ago.

How did it happen? Fiat money, Fed-created inflation, and spending beyond our means (yes, the government can spend far beyond its means too). All this has put us in a precarious position. Can more (enormous) spending get us out of this mess? Ah, that's the question that is currently putting the best minds in the nation at odds.

August 17, 2009:

My old friend, Ian McAvity, has continued Ham's study (Ian McAvity's Deliberations out of Toronto). In his latest report Ian writes, "Over the 4 years to September '07 when the meltdown began, nominal US GDP rose $2.86 trillion (25.8%). Total credit Market Debt increased by $14.85 trillion (44%) over those 16 quarters, this translated to $5.21 of new debt per every $1 of GDP. In the two years to September '08, it rose to $6.49 of new debt to $1 in GDP. Ballooning Federal debt to recapitalize banks isn't going to translate into resurgent growth in consumer spending. Off the mat, probably yes, but recovery is likely a long way off."

August 17, 2009:

HARRY Markopolos -- the whistleblower on Bernie Madoff who proved to be much smarter than the SEC -- says there are evildoers out there who will make the Ponzi scum "look like small-time." Markopolos gave a speech to 400 of the faithful at the Greek Orthodox Church in Southampton and predicted major scandals will soon be revealed about the unregulated, $600 trillion, credit-default swap market. "To put it in simple terms, it is like buying fire insurance policies from five different insurance companies on your neighbor's house and then burning down the house," he said. After his lecture, Hampton Sheet publisher Joan Jedell reports Markopolos was feted at a dinner at Nello Summertimes hosted by John Catsimatidis and his wife, Margo, who were joined by Al D'Amato and Greek shipping magnates Nicholas Zoullas and Spiros Milonas.

August 17, 2009:

August 6, 2009: A health observation by Richard Russell in his 85th year...

"Seriously, this is something I've been thinking about and something I've learned the hard way. When I had a stroke a year ago I realized that the brain controls EVERYTHING, breathing, typing, speech, walking, thinking, seeing, hearing, balance, and all the bodily functions.

It has occurred to me that when the brain atrophies, the body starts to wither. When the brain dies, the body dies. For this reason, I think the most healthful thing you can do is to exercise your brain. The body weakens when you stop exercising. In the same way, the brain weakens when you stop thinking. So read the papers, do puzzles, argue, learn, think a little, do whatever you have to -- in order to use your brain.

Three major killers -- heart attacks, strokes, cancer. To avoid strokes, the most important thing is to keep you blood pressure down. One huge help is to avoid too much salt. In processed food bought at markets, and in restaurants almost everything is loaded with salt (sodium) or sugar or corn syrup. It's almost a scandal. Check the labels, if it's high in salt or sugar, don't buy it. Or as Jack Lalanne puts it, "If man made it, don't eat it." Or "If it tastes good, spit it out." Good advice.

Get a portable blood pressure device and check you blood pressure. And cut out that damn salt. Problem -- restaurant food it almost always loaded with salt. Tell your waiter, "leave out the salt." Sauces and gravies are almost always high in salt."

August 3, 2009: Compliments of DOW JONES NEWSWIRE... Natural Gas Futures Jump On Weather Forecasts, Storm Chances by Jason Womack

July 29, 2009: Secular Bear Market 1929 - 1949.... The Bubble Bursts:
July 29, 2009: Secular Bear Market 1966 - 1982... The Times They Are A-Changin':
July 29, 2009:July 29, 2009: Secular Bull Market 1982 - 1999... Ready Set GO!

July 28, 2009: Compliments of ZeroHedge.com... The End Of The End Of The Recession? by Tyler Durden
With Special Thanks To David Rosenberg, Chief Economist and Strategist, Gluskin Sheff + Associates, Inc.

July 24, 2009:

July 23, 2009: Chart of the Day

Today, several companies (i.e. Ford, eBay and AT&T) reported better than expected earnings and as a result the stock market rallied on the news. While some companies have reported better than expected earnings for Q2 2009, others have struggled. Today's chart provides some perspective on the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. Today's chart illustrates how earnings are expected (38% of S&P 500 companies have reported for Q2 2009) to have declined over 98% since peaking in Q3 2007, making this by far the largest decline on record (the data goes back to 1936). In fact, real earnings have dropped to a record low and if current estimates hold, Q3 2009 will see the first 12-month period during which S&P 500 earnings are negative.

Quote of the Day
"The engine which drives Enterprise is not Thrift, but Profit." - John Maynard Keynes

July 20, 2009: Compliments of TD Newcrest... Research Report on Gold

July 15, 2009: Compliments of Raymond James... Inflation or Deflation - Buy Gold

July 13, 2009: Rep. Kirk Says China Is Investing Away from Dollar... Bought Enough Gold to Fill Up Ft. Knox Twice- Must Watch

July 15, 2009:

Now, we know what went on at the G 8 Summit in Italy

April 27, 2009: Frost over the World - David Frost in conversation with Jim Rogers (aired February 13, 2009) NEW
April 22, 2008: Compliments of CNBC... Gold Heading Above $2,000 with Philip Manduca; ECU Group
April 18, 2009: Welcome to Mississauga... Rick Mercer with 88 year-old Mayor Hazel McCallion - MUST WATCH
April 15, 2009: Compliments of CNBC... Langone Weighs In On Housing & Banks
April 14, 2009: Compliments of CNBC... Bullish on Gold with Jurg Kiener, CEO of Swiss Asia Capital.
April 9, 2009: Compliments of CNBC...Golden Opportunities with Peter Munk
March 26,2009: Why the Meltdown Should Have Surprised No One - Peter Schiff
March 16, 2009: Compliments of Bloomberg... Marc Faber "In Thailand we grow good stuff"
March 14, 2009: Zapata George's Lesson 1: On the stock market
March 14, 2009: Zapata George's Lesson 2: 5 Rules of Investing
March 14, 2009: Compliments of ABC 20/20... Bailouts and Bull with John Stossel: The Economy
March 14, 2009: James Robertson� Working for a sane alternative interviewed by Fred Harrison
March 4, 2009: U.S. Economic Collapse Phase II: The Stimulus Scam or "Let Them Eat Pork." an interview with Jim Rogers
February 19, 2009: Compliments of CNBC... Santelli's Chicago Tea Party
February 17, 2009: Compliments of PBS Frontline... Inside The Meltdown (Watch The Full Program)
February 13, 2009: Bill Moyers PBS interview on the banking crisis
February 10, 2009: CSPAN Rep. Paul Kanjorski Reviews The Bailout Situation
February 9, 2009: Predicting Crisis: Dr. Doom and the Black Swan
February 5, 2008: Marc Faber; U S will default on debt or enter hyperinflation
January 19, 2009: Flo White's Money Bomb
January 8, 2008: Feel like flying?
December 25, 2008: Fred Thompson on the Economy
December 10, 2008: Sir Evelyn de Rothschild in discussion with CNBC's Maria Bartiromo
November 9, 2008: John Embry interviewed by BNN's Amanda Lang - U.S. Dollar Currency Collapse Within 30 Days - Gold Update

January 26, 2009:

(SEE: Roosevelt's erroneous nonsense below.)

Chart of the Day

Many investors continue to look to the early 1930s for some insight into the current economic/stock market environment. While there are significant differences (global economy, credit default swaps, TARP, FDIC, etc.) between the current environment and that what occurred in the early 1930s, there are also many similarities (bank failures, bankruptcies, severe market declines, etc.). For some perspective on the current stock market rally that began on March 9th, today's chart illustrates duration (calendar days) and magnitude (percent gain) of all significant Dow rallies that occurred during the 1929-1932 bear market (solid blue dots). For example, the bear market rally that began in November 1929 lasted 155 calendar days and resulted in a gain of 48%. As today's chart illustrates, the current Dow rally (hollow blue dot labeled you are here) is above average in both duration and magnitude relative to the average 1929-1932 bear market rally (hollow red dot). Compared to the current rally, only one 1929-1932 bear market rally was greater in both magnitude and duration and that was the first 1929-1932 bear market rally that began in November 1929.

Quote of the Day
"One thing is sure. We have to do something. We have to do the best we know how at the moment... If it doesn't turn out right, we can modify it as we go along." - Franklin D. Roosevelt

July 10, 2009: Compliments of Phil Spicer

You cannot multiply wealth by dividing it.

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving.

The government cannot give to anybody anything that the government does not first take from someone else.

When half of the people get the idea that they do not have to work because the other half is going to take care of them, and the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation.

You cannot multiply wealth by dividing it."

~~~~Dr. Adrian Rogers, 1931- 2005~~~

June 26, 2009:

Job of a lifetime

TRUE STORY:

Outside Bristol Zoo there is a car park for 150 cars and 8 coaches. There also used to be a very pleasant attendant with a ticket machine charging; cars �1 and coaches �5.

This parking attendant worked there for all of 25 years , then one day just didn't turn up for work...

"Ho hum", said Bristol Zoo Management - "better phone up the City Council and get them to send a new parking attendant" ......

"Err no", said the Council, "that car park is your responsibility" ...

"Err no", said Bristol Zoo Management, "the attendant was employed by the City Council, wasn't he?" .....

"Err NO!"

Sitting in his villa in Spain is a bloke who had been taking the car park fees amounting to an estimated �400 per day [obviously TAX-FREE] at Bristol Zoo for the last 25 years...

Works out to an estimated �3.65 million !

June 24, 2009 -- "If you think health care is expensive now, wait until you see what it costs when it's free." P.J. O'Rourke

June 23, 2009:

"So some Dutch teachers' union that a year before was
buying ultra-safe U.S. Treasury bonds in 2006 runs into a
Goldman salesman who offers them a different, "just as
safe" AAA-rated investment that, at the moment anyway,
just happens to be earning a much higher return than
treasuries. Next thing you know, a bunch of teachers in
Holland are betting their retirement nest eggs on a bunch of
meth addicted "homeowners" in Texas and Arizona.
This isn't really commerce, but much more like organized
crime: it was a gigantic fraud perpetrated on the economy
that wouldn't have been possible without accomplices in the
ratings agencies and regulators willing to turn a blind eye.
Imagine a meat company that bred ten billion rats, fattened
them on trash and sewage, ground their bodies into chuck,
and then sold it all as grade-A ground beef to McDonald's
and Burger King, right under the noses of the USDA: this is
exactly the same thing, only with debt instead of food.
We're eating it, they're counting the money." � Matt Taibbi

June 17, 2009: Compliments of Financial Times... Lex Column

Bond Bear Markets

�Bespoke Investment Group indentify seven US bond bear markets since 1977. On average, by the time the trigger for the definition of a bond bear market has been reached, about two-thirds of the eventual fall had taken place, and time-wise, the bear market was already four-fifths over.�

June 17, 2009: Compliments of Financial Times, Lex Column... Bond Bear Markets

�Bespoke Investment Group indentify seven US bond bear markets since 1977. On average, by the time the trigger for the definition of a bond bear market has been reached, about two-thirds of the eventual fall had taken place, and time-wise, the bear market was already four-fifths over.�

June 16, 2009: Chart of the day

While the stock market has rallied nicely since bottoming on March 9th, the economy continues to struggle. For some perspective on the current economic recession, today's chart illustrates the duration of all US recessions since 1900. As today's chart illustrates, the five longest recessions all began prior to 1930. The length of the current recession (now in its 18th month) is above average and the longest recession since the Great Depression.

Quote of the Day
"The hidden strength of the U.S. economy has always been the flexibility of our economy to devour the weakest and redeploy that financial and human capital to companies and industries that are great users of capital." - Tobin Smith

June 16, 2009:

Subject: Brilliant! How to fix the economy and make everyone happy! :)

This is from an article in the St. Petersburg Times Newspaper.

The Business Section asked readers for ideas on "How Would You Fix the
Economy?"  I think this guy nailed it!

Dear Mr. President:

Please find below my suggestion for fixing America 's economy.  Instead of giving billions of dollars to companies that will squander the money on lavish parties and unearned bonuses, use the following plan.
You can call it the Patriotic Retirement Plan:

There are about 40 million people over 50 in the work force.  Pay them $1 million a piece severance for early retirement with the following stipulations:

1) They MUST retire. Forty million job openings - Unemployment fixed.

2) They MUST buy a new American CAR. Forty million cars ordered - Auto Industry fixed.

3) They MUST either buy a house or pay off their mortgage - Housing Crisis fixed.

It can't get any easier than that!
If more money is needed, have all members of Congress and their constituents pay their taxes...

Financial Times, Lex Column, 12 June 2009

�Given that the US may have to borrow some $3,250bn this year, the increased worries that the US could face a buyer�s strike for its debt ...�

June 12, 2009: Compliments of Jim Sinclair... jsmineset.com

Dear Friends,

You know that information that comes to me has been reliable. You also know that the entire purpose of all of working here at JSMineset has been to get you through this safely. You also know that if we had not been here hundreds of thousands of people now holding gold would not be.

So please pay attention to the following.

I have heard rumors for some time, but today it was confirmed to me, that the Canadian mint�s present problems are not unique and that other depositories (vaults) have had an army of auditors descend on them in the last two weeks. Some of these depositories have names so famous that it would scare the hell out of you. The repercussions would be drastic if they turn out to be troubled.

Why take the risk?

I suggest to you now that you take delivery of all gold held in vaults and depositories on your behalf, but this time even from the most prestigious.

You can get delivery via armoured car service to your bank and utilize safe depository, spread over a few banks. You can insure your safe depository if you do not mind making your holdings public.

I believe that this recommendation is warranted, but also it will be the financial saviour of many.

Respectfully yours, Jim

May 18, 2009: MORNING NOTES... CANADA by Michael A. Berry, Ph.D.

May 14, 2009: Obama Budget Cuts Visualization - MUST WATCH

May 13, 2009: Compliments of Richard Russell...Off we go, into the wild red yonder -- President Obama, how could they have done this to you? You listened to the Wall Street crowd, and it's going to destroy your presidency. Why? The latest White House estimate for this year's deficit has been raised 5% from its earlier February estimate to the new estimate of (deep breath) $1.84 trillion. And the deficit for next year will be $1.25 trillion. That's over three trillion dollars in two years! Who in hell is going to buy all the securities that will have to be offered? "Who the gods would destroy, they first make mad." Welcome to mad America.

and

Manipulation -- As far as the Fed and the Treasury are concerned, this is an all-out WAR. They've put the viability of the United States at risk through creating trillions of dollars of debt. I believe this government will stop at nothing in their furious battle against the bear market and deflation. And if manipulation helps, they'll do it.

For decades I've heard stories and rumors about manipulation. I've always brushed those rumors aside. But this is a different world, and the nation is literally fighting for its life. People ask me, "Do you really believe the government would manipulate the markets?" My answer, "You bet I do, they're willing to do absolutely anything in their struggle to get the US economy back to 'normal' again."

May 12, 2009: Compliments of Richard Russell... I read about what's going on in the Fed and the Treasury, and I can't believe it. Friedman, former president of the powerful NY Fed, (he's also a director of Goldman) buys 52,600 shares of stock in Goldman Sachs, and he's accused of a conflict of interest. Friedman quits -- but where does he quit? Why I'll be damned, he quits his Fed job -- and chooses to remain a Goldman director. What a surprise!

It's now obvious that the Fed and the Treasury want, above all, to save the banks. Everything else is secondary. It's also increasingly obvious that the bankers own the nation and that Goldman Sachs runs the nation and the banks. The whole thing is so flagrant that my head spins. And what Goldman doesn't control, the Pentagon controls.

May 11, 2009:Today first class postage goes up from 42 cents to 44 cents. Gosh, I remember when it was three cents. The government runs the post office. What more to say? - Richard Russell

May 1, 2009: Compliments of Richard Russell... We may be seeing the end of the US auto industry. Chrysler has filed for bankruptcy. GM is now being run by the United Auto Workers and the US government, hardly an exciting combination. The deal. Let's say you own $220,000 of the old GM bonds. The government is "offering" to give 80% of the face value of your bonds to the UAW while giving you 45,000 shares of stock. At the same time, the government is offering stock to enough other people to dilute the value of those shares to about ten cents on the dollar or $4,500. By owning stock instead of bonds, you end up further back in the line for repayment in case GM files for bankruptcy. In all, not a juicy deal. Say "bye-bye" to the US auto industry.

April 24, 2009: Thanks to Virginia; intro is hers.

Hi,
The more one knows about finance, the more outrageous appear the dots connected by Eric Fry of Agora Publications. Is it not a smoking gun when Sec. of the Treasury Henry Paulson says, "We do not want a disclosable event"?
The cozy backdoor financing of banks with tax-payer bailouts run through [laundered by] AIG and the Federal Reserve deserve to be exposed before it can happen again. One would hope that the bailouts could be repudiated to recover some part of taxpayers' money. Probably the money is gone. But the perps should be indicted, tried and convicted. And the Federal Reserve should be abolished.
Through hard work and saving, the US economy can recover. But recovery won't happen so long as we are being stolen blind. V.

April 24, 2009: Compliments of The Rude Awakening... The Recovery That Isn�t by Eric J. Fry

April 24, 2009: 140 Years Of Bull And Bear Markets by Henry Blodget (April 6, 2009)

April 23, 2009 -- The IMF sees a 1.3% drop in global output this year. Furthermore, the IMF puts banks losses from the global financial crisis at $4.1 trillion.

Compliments of Richard Russell: Bill Gary has been writing his terrific commodity reports for 41 years. Bill has a great global vision, besides being an expert on commodities ("Price Perceptions" 800 231 - 0477). Bill's latest report was so fascinating and informative that I wanted my subscribers to see most of it (thanks Bill). Below some paragraphs from that latest "Price Perceptions."

CAN CHINA BUY THE WORLD? That's Bill's heading. Russell answer -- Sure they can, if fact, they're doing it.

Chinese premier, Wen Jiabao, fired the first warning shot last month, hinting that balance of world power was shifting. He Indicated China was tiring of owning US bonds. He said, "We have lent a huge amount of money to the US, so, of course,. we are concerned about the safety of our assets." China holds the world's largest monetary reserves, about $1.9 trillion, mostly in US dollar assets. The US is dependent on China continuing to buy US bonds to financed our historic growing deficits.

In recent months China's State Reserves Bureau, has been buying copper and other industrials metals. In January, China imported a record 329 tonnes of copper.In February they imported another record 375,000 tonnes. This is much more copper than they can readily use. It is becoming apparent China is diversifying away from the world's reserve currency, the US dollar, and investing in a multitude of other items.

Although it is well known China has aggressively invested in Africa to assure future supplies of metals and oil, it is not as widely known they are also investing heavily in Latin America. China is doubling a development fund in Venezuela to $12 billion in return for oil shipments expanding from 380,000 to 1,000,000 barrels per day. They also loaned $10 billion to Brazil's National Oil Company for offshore exploration in return for an agreement to ship 1,000 barrels a day to China.

Even more revealing are recent swap arrangements with South Korea, Malaysia, Indonesia, and Belarus. China made loans of 650 billion renminbi ($95 billion) to these nations in their own currency rather than dollars. Therefore, they will use the loans to import Chinese products rather than those of nations accepting only dollars.

More importantly, China is working on a swap of $10 billion in renminbi with Argentina. This will allow Argentina to avoid using scarce US dollars for imports and shift some import demand to China. It is apparent China is making these swaps as a way for the renminbi to eventually be used as an alternative reserve currency.

China is using some of their reserves to buy metals that can be stored for long periods of time and utilized in future years. They are also building a stockpile of soybeans, creating temporary demand and near term supply tightness. The Wall Street Journal reported this week that China also invested $52 billion last year in foreign acquisitions, two thirds of which were in natural resources. They have reportedly already invested $23 billion this year, nearly all in natural resources.

April 15, 2009: Simon Johnson, the former Chief Economist at the IMF and current professor at MIT�s Sloan School of Management:
"The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government�a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF�s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we�re running out of time."

Irreplacable Employees:

April 6, 2009: 'Some employees are simply irreplaceable. Take Michelle Obama: The University of Chicago Medical center hired her in 2002 to run "programs for community relations, neighborhood outreach, volunteer recruitment, staff diversity and minority contracting."

In 2005 the hospital raised her salary from $120,000 to $317,000 - nearly twice what her husband made as a Senator..

Oh, did we mention that her husband had just become a US Senator?   He sure had.   Requested a $1 Million earmark for the UC Medical Center, in fact.   Way to network Michelle! (And they say  Bozobitch was selling his Senate pick for ILL.)

But now that Mrs. Obama has resigned, the hospital says her position will remain unfilled.    How can that be, if the work she did was vital enough to be worth $317,000?

We can think of only one explanation:   Senator Roland Burris's wife wasn't interested.

---The Editors of National Review, writing in the Magazine's Feb 9 issue.'

Comment on the gold price movement

FROM CASEY RESEARCH REPORT: March 21, 2009

Prices have risen sharply since the Fed announced plans on Wednesday to buy $300 billion in longer-dated Treasuries, flooding the market with dollars. The move prompted a sharp drop in the U.S. currency and an increase in inflation fears.

"When you look at the gold market, there is a huge dynamic in place, which is an increasing loathing of currencies," said Nick Moore, an analyst at RBS Global Banking & Markets. "The only true currency, which is gold, is the beneficiary of that.�

"If central banks around the world are keen to avoid deflation, then by definition they must have inflation, and that plays straight into gold's hands," he added.

March 18, 2009: Will Obama, McCain, Dodd Return Contributions From AIG Employees?
AIG Gave More Than $630,000 During the 2008 Political Cycle by JONATHAN KARL

March 17, 2009: A Sand Fly�s thoughts from the Arctic

Sand Fly was social last night and ventured out to meet a few friends over dinner. Naturally, the economic state of affairs and more specifically, the market�s erosion of wealth was just one of the topics covered with great interest. It was a rather international crowd around the table, experienced investors keen to hear of new opportunities but there has recently been not only an erosion to their wealth, more critically, there has been a deep and I would say, irreparable, erosion of their confidence in the financial system and instruments that carried their faith for so many years. Last night, people spoke of investing in �real� businesses, new ideas and backing entrepreneurs with a vision and belief in their product. The consumer will emerge as a far more savvy creature and when he begins to spend again, he will be looking for value. There is indeed money out there looking to back a true and viable idea, with a proper business plan and a clearly defined market. It�s called back to basics. No derivatives, CDS or other financially engineered acronym to mask profits or losses. Whilst people may be losing their jobs, the opportunity is there for those with ideas and the drive to make them a reality. Like the phoenix rising from the ashes, new and real businesses will emerge, some as basic as pancakes and others that will test our imagination. The old model in many industries is broken. There has been a paradigm shift in consciousness that will bring about changes in distribution, efficiency, transparency and humanity. Values may even return as a priority. I just pray that a war doesn�t take us to this point but that the human spirit will rise to meet a new standard of conduct and respect in every aspect of our lives. Capitalism is alive and well, but there is no room for the greed and deceit perpetrated by those looking for the mega bonuses that came from simply trading worthless paper. It�s about making money the old fashioned way...earning it.

March 16, 2009: A Sand Fly�s thoughts from the Arctic

I went quiet for a few days....perhaps silenced by the market rally last week that CNBC and the White House would love for us to believe is the start of a new bull market. Could a sand fly�s wing flutter cause this wishful thinking to burst like a soap bubble under a hot sun? I am starting to feel an enormous sense of disgust for an industry that I spent a life time in. Jim Cramer, I always felt, was a menace to America, (especially those with healthy hearing) perhaps more so than Bernie Madoff because he actually made people believe they had a chance in the markets while he knew all along of the antics he and his fellow hedge fund managers played in the manipulation of the markets. He stupidly allowed himself to be video tapped spilling the beans thereby exposing himself for what he truly is. Did he think his confession would make him look �smart� in the eyes of his viewers? CNBC must be giving some serious thought by now to the notion that this clown must be taken off the air immediately, especially under the current market conditions. If the government can protect bankrupt bankers, doesn�t a broadcaster have a duty to protect the innocent viewers who are being led to believe they actually have a chance of surviving amidst the high speed traffic. Bravo to Jon Stewart for making Cramer squirm...made him look like Bernanke under the intense heat of a Congressional Hearing! Maybe Cramer can give up his TV show and graduate to Federal Reserve Chairman or better still, if we are really lucky, the whole lot of them can join Bernie in time for a closely supervised Thanksgiving dinner this Fall.

March 14, 2009: Zapata George's Lesson 1: On the stock market
March 14, 2009: Zapata George's Lesson 2: 5 Rules of Investing

March 14, 2009: James Robertson� Working for a sane alternative interviewed by Fred Harrison

March 10, 2009: Compliments of UBS Investment Research... Q-Series�: Gold

March 10, 2009: Compliments of Platts� Banks were January net buyers of 1.1 million oz of gold: CPM

March 10, 2009: Amazing facts in the new world --

The true deficit of the federal government is a $65.5 trillion in total obligations. This exceeds the gross domestic product of the entire world.

Empty houses in the US now number about 14 million or one in nine homes.

At the forum in Davos, it was revealed the 40 percent of the world's wealth has been destroyed by the financial crisis so far.

The International Labor Organization now estimates that global unemployment in 2009 could increase to 198 million or 230 million in the worst case scenario.

In short, the biggest bubble of them all -- that the US dollar is "money" -- is about to pop. The US dollar is on the path to the fiat currency graveyard, and will soon get there.

The above facts and comments are courtesy of the McAlvany Intelligence Advisor, PO Box 84904, Phoenix, AZ. 85071.

March 9, 2009: Thanks to Richard Russell and compliments of The Financial Times�
Cry Wolf -- I just finished reading the full-page article by the brilliant and respected Martin Wolf, chief economist for the Financial Times. And I must say I was taken aback by Wolf's out-spoken bearishness (Wolf is read and debated by economists the world over). Here are a few sections from the Wolf article

"How did the world arrive here? A big part of the answer is that the era of liberalization contained seeds of its own downfall: this was also a period of massive growth in the scale and profitability of the financial sector, of frenetic financial innovation, of growing global macroeconomic imbalances, of huge household borrowing and of bubbles in asset prices.

"In the US, core of the global market economy and the center of the current storm, the aggregate debt of the financial sector jumped from 22 percent of gross domestic product in 1981 to 117 percent by the third quarter of 2008. In the UK, with its heavy reliance on financial activity, gross debt of the financial sector reached almost 250 percent of the GDP.

"We are witnessing the deepest, broadest and most dangerous financial crisis since the 1930s. . . .Among the possible outcomes of this shock are: massive and prolonged fiscal deficits in countries with large external deficits, as they try to sustain demand, a prolonged world recession, a brutal adjustment of the global balance of payments, a collapse of the dollar; soaring inflation, and a resort to protectionism. The transformation will surely go deepest in the financial sector itself. The proposition that sophisticated modern finance was able to transfer risk to those best able to manage it has failed. The paradigm is, instead, that risk has been transferred to those least able to understand it. As Mr. Volcker remarked during a speech last April. Simply stated -- for all its talented participants, for all its rich rewards -- has failed the test of the marketplace."

February 27, 2009: A Sand Fly�s thoughts from the Arctic

Being a sand fly, I am familiar with sand. Ever tried to dig a hole in sand? The grains of sand quickly shift and the hole is no longer a hole. It�s a little like money....money today, more than ever, shifts around the globe at the push of a button to find the best opportunity to replicate. If one were to think back to 10 or 15 years ago, countries like India or China were hardly on our radar let alone being considered serious players on the world economic stage. Yet today, we are in awe and perhaps secretly hope that their new found wealth and high growth rates may provide the safety cord that pulls the world out of this mess. One of India�s wealthiest provinces is Kerala, located on the south-western coast of the country. Cochin, it�s port, has been important thru recent centuries for its ship building, spice trading and general port of call for trade in the region linking India to the Middle East. It came as no surprise to read that Kerala is responsible for approximately 20% of India�s consumption of gold. There is a thriving goldsmith and diamond cutting industry in situ. Where as in the west, diamonds have been a girl�s best friend, in India, a woman�s gold bangles have been hers. But thanks to internet technology and the viral spread of ideas, new trends and fashion, the girls of Kerala are now turning their tastes to diamonds just as we are turning our taste buds to the splendour of curries. I can�t help but think that like the shifting grains of sand, more of them will be driving cars and more of us will be riding bicycles. All part of the great flattening of the world that we in the west may be tempted to shut our eyes to.

February 27, 2009: Compliments of Richard Russell's Dow Theory Letters... Is there any one chart that can describe the state the nation is in? I think it could be AIG, once our biggest insurance company. The stock was 103.75 in December, 2000. Today, AIG was selling for a dime a share. Maybe that says it all.

February 26, 2009: A Sand Fly�s thoughts from the Arctic

With the benefit of 36 hours to reflect on Obama�s State of the Union address on Tuesday night, it dawned on me just how much the American public is being drugged, numbed ....call it whatever. The congressional telecasts have now been reduced to TV show �entertainment� status and Obama�s address was no less of a blockbuster show than the Oscars, complete with standing ovations for every �wish� Obama added to the American wish list. Followed only by the post show Republican�s response delivered by Governor Jindal that was even more irrelevant than the red carpet analysis of what star wore what. Is anyone really observing what the greatest nation on earth has been reduced to?? No one dared to ask how the wish list was going to be funded during a period when America and the world face the biggest meltdown known to man..... not during the post speech analysis nor in the days after, for fear that reality may shatter the �feel good� pipe dream that they are trying to sell to America and the world. It reminded me of the days of early televangelist TV....put your hand on the TV screen and say �I believe�!!! The sugar coating on every announcement from Obama to Geithner to Bernacke is so thick and sweet that by the time Americans recover from their sugar high, their bank accounts will have been fleeced, they will have been raped and pillaged and the culprits will have retired on inflation indexed pensions behind gated communities with high walls and government sponsored security while America suckles on a new season of �Lost�.

February 25, 2009: Compliments of Richard Russell's Dow Theory Letters...
"Standard & Poor's reports that dividend cuts for the quarter a running at record rates. With the current quarter half over, this quarter's dividend cuts are already as high as last quarter's total cut.
Total equity losses across the globe are mind-blowing. The figure I hear is $30 trillion, and this doesn't include the much higher losses in real estate values, which I understand are running $60 trillion.
As an experiment, I looked up five of the major Dow Industrials stocks and checked their peak prices to the present. Check out this list --

GM high was $93.63, current 2.22

Citigroup high was 56.41, current 2.60

Bank of America, high was 54.90 current is 4.73.

Alcoa high was 47.29 current is 6.39.

GE high was 60 current is 9.08

I mean, I haven't seen losses like this since 1973-74. And remember, these are all formerly blue-chip top-grade corporate stocks. It's almost unbelievable."

February 24, 2009: Compliments of Richard Russell and The Dow Theory Letters...Notes and quotes -- Damn clever, these Chinese. They have accumulated almost $2 trillion in reserves, and now Chinese "hunting parties" are being organized to travel all over the world, buying up bargain real estate and dirt-cheap corporations. Chinese are also collecting gem quality diamonds and works of art. The Chinese are prodigious savers and save around 20% of their income. The Chinese government is encouraging its citizens to buy and hoard gold.

Recession vs. depression. Recessions are brought about when the Fed, in an effort to halt over-speculation and irrational exuberance, raises interest rates high enough so that the economy contracts. Depressions are a result of a collapse in the credit structure or some extremely negative manifestation in the economy.

February 24, 2009: GOOGLE it or follow this link. It will blow your mind. Read the article first..... http://www.usgs.gov/newsroom/article.asp?ID=1911

The U. S. Geological Service issued a report in April ('08) that only scientists and oil men knew was coming, but man was it big. It was a revised report (hadn't been updated since '95) on how much oil was in this area of the western 2/3 of North Dakota ; western South Dakota ; and extreme eastern Montana .... check THIS out:

The Bakken is the largest domestic oil discovery since Alaska 's Prudhoe Bay , and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable... at $107 a barrel, we're looking at a resource base worth more than $5.3 trillion.

'When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea.' says Terry Johnson, the Montana Legislature's financial analyst.

'This sizable find is now the highest-producing onshore oil field found in the past 56 years.' reports, The Pittsburgh Post Gazette. It's a formation known as the Williston Basin , but is more commonly referred to as the 'Bakken.' And it stretches from Northern Montana, through North Dakota and into Canada . For years, U. S. oil exploration has been considered a dead end. Even the 'Big Oil' companies gave up searching for majo r oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken's massive reserves... and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!

That's enough crude to fully fuel the American economy for 41 years straight.

And if THAT didn't throw you on the floor, then this next one should - because it's from TWO YEARS AGO!

U. S. Oil Discovery- Largest Reserve in the World!
Stansberry Report Online - 4/20/2006

Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction.

They reported this stunning news: We have more oil inside our borders, than all the other proven reserves on earth.

Here are the official estimates:

- 8-times as much oil as Saudi Arabia
- 18-times as much oil as Iraq
- 21-ti me s as much oil as Kuwait
- 22-times as much oil as Iran
- 500-times as much oil as Yemen

- and it's all right here in the Western United States ..

HOW can this BE? HOW can we NOT BE extracting this? Because the environmentalists and others have blocked all efforts to help America become independent of foreign oil!

James Bartis, lead researcher with the study says we've got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels untapped. That's more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.

----
Don't think 'OPEC' will drop its price - even with this find? Think again! It's all about the competitive marketplace, - it has to.
----
Got your attention/ire up yet? Hope so! Now, while you're thinking about it .. and hopefully P.O'd, do this:

Pass this along.. If you don't take a little time to do this, then you should stifle yourself the next time you want to complain about gas prices ... because by doing NOTHING, you've forfeited your right to complain.
--------
Now I just wonder what would happen in this country if every one of you sent this to every one in your address book.

Results of the assessment can be found at http://energy.usgs.gov

February 19, 2009: Compliments of Richard Russell's Dow Theory Letters...

Comments -- On January 20, Dow Jones removed all stocks in the Industrial Average that were below ten dollars in price. This removed C, BAC. GM, AA. Removing the weak financial (bank) stocks rendered the Dow stronger. Why didn't Dow Jones replace the stocks removed with other stocks? Well, historically, the D-J revises its averages every January.

I've never in 60 years of watching the market seen a battle like the current one to keep a Dow Theory bear signal from occurring. I've wondered what could possibly be going on. My guess -- certain large equity funds believe we're in a bear market, and they want time to unload some of their stocks. They're buying just enough big cap stocks near the end of the day to keep the Dow above 7552.29. Could this be what has been keeping the Dow above its November low. I wouldn't doubt it, after all, hundreds of billions are involved. And it would be legal.

February 10, 2009: LiveLeak has caught a scary moment of previously undisclosed insight by Paul Kanjorski where he reveals some facts that have not been captured by the media previously. At 2 minutes and 20 seconds in the video below, Democratic Representative Kanjorski explains how the Federal Reserve told Congress members about a "tremendous draw-down of money market accounts in the United States, to the tune of $550 billion dollars." According to Kanjorski, this electronic transfer occurred over the period of an hour or two. And it gets worse. Kanjorski paraphrases the following disclosure by Bernanke and Paulson (emphasis added):

On Thursday (Sept 18), at 11 in the morning the Federal Reserve noticed a tremendous draw-down of money market accounts in the U.S., to the tune of $550 billion was being drawn out in the matter of an hour or two. The Treasury opened up its window to help and pumped a $105 billion in the system and quickly realized that they could not stem the tide. We were having an electronic run on the banks. They decided to close the operation, close down the money accounts and announce a guarantee of $250,000 per account so there wouldn't be further panic out there.

If they had not done that, their estimation was that by 2pm that afternoon, $5.5 trillion would have been drawn out of the money market system of the U.S., would have collapsed the entire economy of the U.S., and within 24 hours the world economy would have collapsed... It would have been the end of our economic system and our political system as we know it...

We are no better off today than we were 3 months ago because we have a decrease in the equity positions of banks because other assets are going sour by the moment.

Interestingly, Kanjorski, and likely more and more Democrats, are starting to shift to the camp that more time is needed to make a correct decision this time (which may explain Geithner's decision to postpone the "bank-rescue" announcement by one day, to Tuesday), instead of rushing into another half-baked plan. Very scary stuff.

CSPAN Rep. Paul Kanjorski Reviews The Bailout Situation - MUST WATCH

February 5, 2009: Bloomberg ---- Bill Gross, co-chief investment officer of Pacific Investment Management Co. said the U.S. may slump into a �mini depression� unless policy makers spend trillions of dollars to spur growth.

�This economy needs support from the government, a check from the government in the trillions,� Gross said today in a Bloomberg Television interview from Pimco�s headquarters in Newport Beach, California. �There is a potential catastrophe if the U.S. government continues to focus on billions of dollars.�

President Barack Obama has proposed a stimulus package intended to spur growth estimated at as much as $900 billion. The U.S. economy shrank by 3.8 percent in the fourth quarter, the most since 1982 as consumer spending recorded the worst slide in the postwar era, the Commerce Department said last week.

Pimco won a Federal Reserve contract in December as one of the four managers of a $500 billion program to purchase mortgage-backed securities. The company was also one of the managers selected to run the Commercial Paper Funding Facility in October.

The Fed will have to step in and buy Treasuries, Gross said, to keep long-term interest rates low as the U.S. increases its debt sales to finance a growing budget deficit and stimulus programs. Central bank officials said Jan. 28 they were �prepared� to buy longer-term Treasuries.

Government borrowing will probably reach $2.5 trillion during the fiscal year ending Sept. 30, according to Goldman Sachs Group Inc.

Speculation has risen that China, which holds $681.9 billion of Treasuries as the single largest investor in U.S. debt, may stop or slow the purchases of U.S. debt as its own economic growth slows.

�To the extent that the Chinese and others do not have the necessary funds, someone has to buy them,� Gross said. �It is incumbent upon the Fed to step in. If they do, that will be a significant day in the bond market and the credit markets.�

January 26, 2009: Paul Krugman, Nobel prize winner, is both worried and bearish. He writes in today's NY Times, "Here's my nightmare scenario: It takes congress months to pass a stimulus plan, and the legislation that actually emerges is too cautious. As a result, the economy plunges for most of 2009 and when the plan finally starts to kick in, its only enough to slow the descent not stop it. Meanwhile, deflation is setting in, while businesses and consumers start to base their spending plans on the expectation of a permanently depressed economy-- well you can see where this is going."

"So this is our moment of truth. Will we in fact do what is necessary to prevent Great Depression II?"

January 28, 2009:Thanks to George... Slightly dated but very relevant

January 26, 2009: Russia -- The global economic slowdown and credit crunch have hit demand for Russian exports. Moscow's indexes have dropped 70% and left business cutting jobs in defense. The ruble has been devalued for the 13th time in two months. The world battle for exports, with the help of cheap currencies is on. They call it competitive devaluations, and the whole picture is not lost on gold. The move is starting -- to move to hard assets. The hardest of all assets is gold. Gold, in case you forget, is pure wealth, it's the only money with no debt against it or without a counter-partner. Gold needs no nation or central bank to attest, by fiat -- that it's money.

January 23, 2009: Compliments of Welling@Weeden... Unconventional Clues Contrary Troika Looks At History Searching For A Way Forward by Kate Welling

January 23, 2009: Compliments of our friend CK... John, Greg: Compliments of CK... Please check the following picture and tell me what is wrong?

At EPS of 3.49, it is way below the good value point. The EPS will be at 7 if the earning drops by 50% which will be doubtful when all these infrastructure project is going to happen.

Best, CK Wong

CK's comments and authored materials in this communication could be freely distributed. CK Wong could be contacted at ck_wong@ieee.org or http://ck-wong.ca/

January 21, 2009:

Interesting table --
Official gold reserves -- as of 9/31/08
Tons (x1000)

US...............8,133.5
Germany .....3,413.1
France......... 2,540.9
Switzerland...1,064.1
Italy..............2,451.8
Japan ...........765.2
China ...........600.0
Russia ..........472.6
India.............357.7

January 20, 2009: With thanks to my friend CK...John, What is wrong with this picture

The USD is so strong that it has gone up 3% today. WTI has a swing of 20+%. I guess no Obama rally.

Note the Dow to oil ratio is down from the 230 to below 200. Dow to gold is also below 10.

Brent is only $3 over WTI and WTI after the fall in the morning is moving back higher.

I also send you the updated Como. When you position the cursor to a commodity, it shows you the high and low since it is up or last 24 hours.

Best, CK Wong

CK's comments and authored materials in this communication could be freely distributed. CK Wong could be contacted at ck_wong@ieee.org or http://ck-wong.ca/.

January 14, 2009:

The following is a quote from a op/ed piece from the November 24 WSJ.
It was written by Christopher Wood, equity strategist for CLSA Ltd. in Hong Kong. Chris is author of "The Bubble Economy, Japan's extraordinary Speculative Boom of the '80s and the Dramatic Bust of the '90s." In this respect, the present crisis in the West will ultimately end up discrediting mechanical monetarism- and with it the fiat paper-money system in general- as the US paper-dollar standard, in place since Richard Nixon broke the link with gold in 1971, finally disintegrates. The catalyst will be foreign creditors fleeing the dollar for gold. That will in turn lead to global recognition of the need for a vastly more disciplined global financial system and one where gold, the "barbarous relic" scorned by most modern central bankers, may well play a part."

January 7, 2009: Compliments of LeMetropoleCafe.com... Larry Summers

The Financial Times has a positive article about Larry Summers this morning. The bottom line is he is credited with the government intervening in the Peso crisis of 94 to avoid a financial calamity.

One of GATA�s greatest accomplishments is discovering Larry Summers theory on defeating Gibson�s paradox. (In an nutshell the theory is if government could suppress the price of Gold then it could lower interest rates and print as many $�s as so desired). GATA understands that Larry Summers core belief is he is smarter than the markets and can fool it with government intervention. I think Larry Summers strong dollar II will turn out to be a disaster, possibly here and now. During strong dollar 1 in the 90�s, Americans and the rest of the world had confidence in the U.S. financial system; the belief that Free Market Capitalism is the best economic system discovered by man was at the core of this belief. Liars can get away with lies when they have credibility. Once this credibility has been lost no one will ever believe the lie again. Credibility in Wall Street and Washington is no longer at the level of the 90�s; too many people know and do not trust government intervention. Larry Summers, Timothy Geithner, Ben Bernanke and the rest of Wall Street are now selling President elect Obama a theory that we can monetize the greatest creation in debt in American history without causing inflation. Without trust this policy is doomed. As investors look at the facts and realize that a 0-2% rate of return on Treasuries is absurd, money will seek better returns. As people lose confidence in the $ they will seek safety. They will quietly begin protecting themselves as they realize this is just one more lie from another administration who believes in deceiving the markets to protect Wall Street. The 15 year social experiment in fooling the markets will blow. As this happens I expect Larry Summers scam based on Gibson�s Paradox will blow; a currency crisis is the logical result of this failure. The charts are saying the $U.S. and U.S. Treasury market are beginning to fail. The strong $ policy has stocks, bonds and the $ rising with Gold and commodities falling. It looks like this is changing. The bottom line is the suppression in Gold, the elevation in Treasury Bonds and the elevation in the $U.S. will all reverse if I am right. It is now a game of musical chairs. Who will be left standing? The question is when? The charts will hold the answer.

January 7, 2009:

US CONGRESSIONAL BUDGET OFFICE FORECASTS RECORD FY09 BUDGET DEFICIT OF $1.186 TRILLION-SOURCE
* * * * *
REUTERS CBO'S BUDGET DEFICIT FORECASTS DO NOT INCLUDE ANY POTENTIAL ECONOMIC STIMULUS SPENDING
* * * * *
Obama warns about years of trillion-dollar deficits

January 5, 2009: Compliments of Barron�s� Pequot�s Wein Sees 33% Rise In S&P

December 25, 2008:

*How the US-Bailout Works!*

Young Chuck moved to Texas and bought a donkey from a farmer for $100.

The farmer agreed to deliver the donkey the next day.

The next day he drove up and said, "Sorry son, but I have some bad news, the donkey died."

Chuck: "Well, then just give me my money back."

Farmer: "Can't do that. I went and spent it already."

Chuck: "Ok, then, just bring me the dead donkey."

Farmer: "What ya gonna do with him?"

Chuck: "I'm going to raffle him off."

Farmer: "You can't raffle off a dead donkey!"

Chuck: "Sure I can, watch me! I just won't tell anybody he's dead."

A month later, the farmer met up with Chuck.

Farmer: "What happened with that dead donkey?"

Chuck: "I raffled him off. I sold 500 tickets at two dollars a piece and made a profit of $998."

Farmer: "Didn't anyone complain?"

Chuck: "Just the guy who won. So I gave him his two dollars back."

Chuck now works for Goldman Sachs

December 22, 2008: "Last week ABC News asked 16 of the banks that have received handouts from the Treasury Department's $700 billion TARP the same two direct questions. How have you used the money and how much have you spent on bonuses this year? Most banks refused to answer" (from the Sunday NY Times).

December 22, 2008: The following is from the Economist's special look ahead edition -- The World in 2009, page 142

"Nevertheless, a lot of debt has been accumulated in developed economies. There are only two ways to get rid of high debt; default on it or inflate it away. Defaults threaten a depression, which governments are determined to avoid. Hence their desire to assume or "socialize" private-sector debt. In the long run, they can repay that debt through higher taxes or inflation."

"The dilemma may become clear to government bond investors, for whom 2009 could be a turning point. Such bonds were a safe haven during the credit crunch. But lending money to profligate governments at 4 or 5% for 30 years may start to look like a bad deal. Instead of an equity-market crash, we could have a bond-market route by the end of 2009."

December 8, 2008:The US has made a new weapon that destroys people but keeps the building standing,. Its called the stock market - Jay Leno

December 6, 2008: FBR Capital Markets, in a Nov. 19 report, estimated that Goldman Sachs (ticker: GS), Morgan Stanley (MS), Citigroup (C), JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC), AIG (AIG) and GE Capital (GE) combined need $1 trillion to $1.2 trillion of equity capital to shore up their balance sheets so they can begin lending again. FBR estimates that the eight have $12.2 trillion in assets and just 3.4% of that -- $406 billion -- in tangible common capital. "The sheer size of the capital deficiency, coupled with the opaque nature of credit risk, will keep private capital sidelined... ." FBR says.

December 6, 2008: 1 year ago RBS paid $100bn for ABN Amro. For this amount it could now buy:
Citibank $22.5bn, Morgan Stanley $10.5bn, Goldman Sachs $21bn, Merrill Lynch $12.3bn, Deutsche Bank $13bn, Barclays $12.7bn
And still have $8bn in change......with which you would be able to pick up GM, Ford, Chrysler and the Honda F1 Team.

December 5, 2008: It was this week, actually yesterday in 1961, that Fidel Castro announced he was a Marxist and would turn Cuba into a communist country where the government would take over all of the major industries...or as we call that today, a bailout. "Courtesy: The White House Bulletin.

December 2, 2008: From yesterday's Financial Times -- "UN economists warn that the dollar is in for a hard landing next year... The UN team says that as the financial crisis spreads beyond the US there has been a massive shift of global financial assets into Treasury bills, driving their yields almost to zero, and pushing the dollar sharply higher. But at the same time the US's external debt has risen to new heights that could promote a dollar collapse.

"The report recommends a reform of the international reserve system away from almost exclusive reliance on the dollar and towards a globally backed multi-currency system."

December 3, 2008: Compliments of Richard Russell... Pascal and investing -- We both went to the same high school, Horace Mann School for Boys in Riverdale, NY. The great Peter Bernstein graduated from Horace Mann in 1938, I graduated in 1942. Peter wrote the book on risk -- the Book is entitled "Against the Gods, the Remarkable story of Risk (John Wiley & Sons).

I want to talk about risk, which plays no small part in investing. In order to understand risk, it is necessary to talk about consequences. And this leads to Pascal's theorem. Writes Peter Bernstein in his book --

"Sometimes we make decisions on the basis of past experience, out of experiments, we or others have conducted in the course of our lifetime. First we cannot conduct experiments that will prove either the existence or the absence of God. Our only alternative is to explore the future consequences of believing in God or rejecting God. Nor can we avert the issue. For by the mere act of living, we are forced to play this game.

Pascal explained that belief in God is not a decision. You cannot awaken one morning and declare, "Today I think I will decide to believe in God." You believe or you do not believe. The decision, therefore, is whether to choose to act in a manner that will lead to believing in God, like living with pious people and following a life of holy water and sacraments." The person who follows these precepts is wagering that God is. The person who cannot be bothered with that kind of thing is wagering that God is not.

The only way to choose between a bet that God exists and a bet that there is no God down the infinite distance of Pascal's coin-tossing game is to decide whether an outcome in which God exists is preferable -- more valuable in some sense -- than an outcome in which God does not exist, even though the probability may be 50-50. This insight conducts Pascal down the path on a decision -- a choice in which the outcome and the likelihood that it may occur will differ because the consequences of the two outcomes are different.

If God is not, whether you lead your life piously or sinfully, is immaterial. But suppose God is. Then if you bet against the existence of God by refusing to live a life of piety and sacrament, you run the risk of eternal damnation, the winner of the bet that God exists has the possibility of salvation. As salvation is clearly preferable to eternal damnation, the correct decision is to act on the basis that God is. "Which way should we incline?" The answer was obvious to Pascal.

Decisions -- OK, what has Pascal's theorem got to do with today's stock market? First, we are in a vicious primary bear market. No one on this earth knows how far down the Dow and the rest of the market might carry. The Dow could halt its descent at 7500 or above or it could sink to a level where the dividend yield on the Dow rises to 6% (this would entail the Dow crashing into the 5000s).

We can sit with our stocks, our full current portfolio and hope that the Dow and the stock market halts it's decline at 7500 or above. If we sell out all our stock here, and Dow 7500 turns out to be the final bottom, we will have done the "smart" thing or let's say we were lucky. But if we sit tight and the Dow goes to 5200, we must consider the CONSEQUENCES. We will have agonized as our portfolio is shattered and we will have sustained tragic losses.

So let's go back to Pascal --what are the consequences of our guessing wrong in this situation? We don't know the answer to the question -- "sit or flee?" The only thing we do know is the consequences of our making the wrong decision.

We must always ask this crucial question prior to making an investment decision. WHAT ARE THE CONSEQUENCES IF I AM WRONG.

December 2, 2008:

Most people can not even fathom how much a trillion dollars is! The following analogy will help!

ONE million dollars would equal a 4 inch high stack of 1000, $1000 bills (the sum total of 1000, 4 thousandths of an inch each in height pieces of paper stacked one on another) . How high of a stack of $1000 bills would ONE trillion dollars be?

Answer: A one trillion dollar stack COMPOSED OF $1000 bills would be 63.13 MILES HIGH (4 inches times 1000 times 1000)!

In the last 11 months, our government has added 7.6 TRILLION dollars in bailout money, equal to a 780 mile stack of $1000 dollar bills! United States combined debt is 67 trillion, equal to a 4230 mile stack of $1000 dollar bills! This is completely out of control!!!! We will soon be in either a total economic collapse or hyperinflation!!!

November 25, 2008: The following is from the great piece by Niall Ferguson appearing in the December Vanity Fair (page 190).

Introduction --"Not so long ago, the dollar stood for a sum of gold, and bankers knew the people they lent to." The author charts the emergence of an abstract, even absurd world -- call it Planet Finance --where mathematical models ignored both history and human nature, and value had no meaning.

"This year we have lived though something more than a financial crisis. We have witnessed the death of a planet. Call it Planet Finance. Two years ago, in 2006, the measured economic output of the entire world was worth about $48.6 trillion. The total market capitalization of the world's stock markets was $50.6 trillion, 4 percent larger. The total value of domestic and international bonds was $ 67.9 trillion, 40 percent larger. Planet Finance was beginning to dwarf Planet Earth.

"Planet Finance seemed to spin faster too. Every day $3.1 trillion changed hands in the foreign-exchange markets. Every month $5.8 trillion changed hands on global stock markets. And all the time new financial life-forms are evolving. The total annual issuance of mortgage-backed securities, including fancy new "collateralized debt obligations" (CDOs) rose to more than $1 trillion. The volume of "derivatives" -- contracts such as options and swaps -- grew even faster, so by the end of 2006 their notional value was just over $400 trillion."

"Before the 1980s, such things were virtually unknown. In the space of a few years the derivative population exploded. On Planet Finance, the securities outnumbered the people, the transactions outnumbered the relationships."

November 19, 2008: HOW BIG IS WAL-MART?

1. At Wal-Mart, Americans spend $36,000,000 every hour of every day.

2. This works out to $20,928 profit every minute!

3. Wal-Mart will sell more from January 1 to St. Patrick's Day (March 17th) than Target sells all year.

4. Wal-Mart is bigger than Home Depot + Kroger + Target + Sears + Costco + K-Mart combined.

5. Wal-Mart employs 1.6 million people and is the largest private employer. And most can't speak English.

6. Wal-Mart is the largest company in the history of the World.

7. Wal-Mart now sells more food than Kroger & Safeway combined, and keep in mind they did this in only 15 years.

8. During this same period, 31 Supermarket chains sought bankruptcy (including Winn-Dixie).

9. Wal-Mart now sells more food than any other store in the world.

10. Wal-Mart has approx 3,900 stores in the USA of which 1,906 are Super Centers; this is 1,000 more than it had 5 years ago.

11. This year, 7.2 billion different purchasing experiences will occur at a Wal-Mart store. (Earth's population is approximately 6.5 billion.)

12. 90% of all Americans live within 15 miles of a Wal-Mart.

13. Let Wal-Mart bail out Wall Street.

November 19, 2008: The cost of protection on Berkshire debt has jumped to 415 basis points from 140 basis points two months ago, according to CMA Datavision. That translates to $415,000 a year to protect $10 million for five years. The median for companies rated Baa3 was 348 basis points yesterday, according to data from Moody's capital markets research group. Credit-default swaps, used to hedge against losses or to speculate on the ability of companies to repay their debt, rise as investor confidence deteriorates.

November 6, 2008 -- "We've been in a recession, and it's going to get a lot worse. It's very easy to see unemployment going above 8 percent." Paul Krugman, Nobel Prize winner.

October 30, 2008: Compliments of TD Securities... The Teflon Maple Leaf by Eric Lascelles

October 27, 2008:

DRAFT LETTER TO THE BANK

Dear Sirs,

In view of what seems to be happening internationally with banks at the moment,
I was wondering if you could advise me on the following matter:

If one of my cheques is returned marked "insufficient funds," how do I know
whether that refers to me or to you?

Sincerely,
I. M. Ankshus

October 27, 2008: Compliments of The Wall Street Journal and with thanks to Seymour...THE COMING U.S. INFLATION MUST READ

"THIS PIECE FROM AN AMERICAN FRIEND GIVES A CLEAR PICTURE OF WHERE THE U.S. IS HEADING AND THE PRICE TO BE PAID FOR ALLOWING UNREGULATED HEDGE FUNDS AND DERIVATIVE ACTIVITY. THE NEXT COMMODITY BOOM WILL SET NEW PRICE RECORDS.
IT IS GALLING TO SEE THE U.S. DOLLAR SELL AT A HUGE PREMIUM.
I THINK OUR CANADIAN DOLLAR IS THE BEST BUY IN THE WORLD TODAY."

Best Regards, Seymour Schulich

Roubini Says `Panic' May Force Market Shutdown, Fund Failures

October 23, 2008: (Bloomberg) -- Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.

``We've reached a situation of sheer panic,' Roubini, who predicted the financial crisis in 2006, said at a conference in London today. ``There will be massive dumping of assets,' and ``hundreds of hedge funds are going to go bust,' he said�

October 19, 2008: Compliments of The Huffington Post� Treasury Blacks out Key Parts of Private Bailout Contracts by David Sirota
Introducing... BailoutSleuth.com - New

October 15, 2008: Bloomberg.com--"The Federal Reserve Bank of Philadelphia's General Economic Index plunged to minus 37.5 this month, less than forecast and the lowest reading since October 1990, from 3.8 in September. Negative readings signal contraction. The index averaged 5.1 last year." The announcement hit the market hard, pushing the Dow down 380 points on top of news of a strike at Boeing and extensive hurricane damage. These factors have accounted for the most significant drop in domestic production since 1974.

October 15, 2008:Volatility remains absurdly high, volume is tremendous, and we should lay very low and see how this market behaves. Remember, we will be looking to invest with the primary trend of the market as soon as it reveals itself to us -- do not be tempted to get in and out of the frenetic market we are witnessing. As old Charles Dow said, "Exercise enough patience for six men."

October 13, 2008: Richard Russell's wisdom on 'Loss'� Compliments of the Dow Theory Letters

October 10, 2008: This story has just been mentioned on Bloomberg TV that Perth mint has people lining up in the street trying to buy gold and they have put on extra staff

October 10, 2008: Compliments of LeMetropoleCafe.com..."Of note, GE announced that it has access to the Fed window, and it is working on the mechanics. GE also stated that it would utilize the facility for potentially up to $60bn."

October 10, 2008: Compliments of LeMetropoleCafe.com...
"Added up a few things in a tired mind last night.

1. Europe has seen its citizens buying physical gold in great numbers for the last two weeks.

2. Wednesday the Central Banks stopped rolling over gold leases. "Send us back our metal."

3. Thursday the Central Banks ordered banks to stop selling gold to the public.

So maybe the people who leased out the gold found out that there was no gold to be had to send back to the banks? So counting leased gold as part of inventory just went up in smoke? Are the Central Banks in huge trouble in their accounting departments?"

October 10, 2008: Compliments of LeMetropoleCafe.com... DJ Final Lehman Debt Recovery Rate 8.625c vs Initial 9.75c

October 9, 2008: Andrew Jackson et al

October 8, 2008: Compliments of LeMetropoleCafe.com... THE FED NOW OWNS THE WORLD'S LARGEST INSURANCE COMPANY --
BUT WHO OWNS THE FED? by Ellen Brown

Lehman Investment Bankers Protest.

October 6, 2008: Compliments of Colin J. Seymour... 1927-1933 Chart of Pompous Prognosticators

October 6, 2008: Compliments of The Telegraph... Germany takes hot seat as Europe falls into the abyss
We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars by Ambrose Evans-Pritchard

October 3, 2008: Compliments of The New York Times... Agency�s �04 Rule Let Banks Pile Up New Debt by STEPHEN LABATON

Hitler Gets A Margin Call
This should make your day. Classics! The Last Laugh - Bird and Fortune - Subprime and The Admirals Interview and Iraq Oil and Conservative MP and Army

August 2008: Compliments of Vanity Fair... Bringing Down Bear Stearns by Bryan Burrough - MUST READ
May 2008: Compliments of Harpers Magazine... Numbers racket: Why the economy is worse than we know by Kevin P. Phillips

July 2008: Of Maes and Macs: From Ridiculous to Sublime by Eric Sprott and Sasha Solunac

Warren Buffett�s Gen Re Experience

When Warren Buffett bought Gen Re, the large re‐insurer, five years ago, he presciently made the decision to reduce their exposure to credit default swaps. It took them four years to
reduce the number of contracts from 23,218 to just 197 at the end of 2006. "We lost over $400 million on contracts that were supposedly 'safe and properly priced' and we did it in a leisurely way in a benign market," says Mr. Buffett. "If we had to unwind it today in one month, who knows what would have happened?" (The Wall Street Journal)

October 6, 2008: Compliments of Barron's... Confidence Index
(High-grade index divided by intermediate-grade index; decline in latter vs. former generally indicates rising confidence, pointing to higher stocks.)

Last Week Prev. Week Yr Ago Week
68.4 69.3 85.0

October 3, 2008:Compliments of LeMetropoleCafe.com... MARKET FORCE ANALYSIS FLASH by Adrian Douglas

October 2, 2008: Richard Russell "Is that shrewd old devil Warren Buffett loading up on any bargain companies these days (you know, he loves to buy the whole company)? Not a chance. A week ago Buffett invested five billion in Goldman's preferred stock paying him 10% or $500 million a year. Then a few days ago Buffett put $3 billion into GE's preferred stock and get this --- the GE preferred stock pays 10% and can be bought back by GE after three years but only via a penalty of 10%. Buffett also received warrants to buy GE stock at any time in the next five years at the huge bargain price of 22.25 a share. It seems, everyone wants the magic name of Buffett as an investor in their company, and Buffett is driving hard bargains. Between his Goldman and GE preferred stock, Buffett will receive $800 million a year, money he can use for further compounding or buying other companies. Warren knows how to make money and compound, when everybody is panicking, it's Buffett to the rescue with brutal deals for the seller."

October 1, 2008 (Bloomberg) -- U.S. auto sales tumbled 27 percent in September as the credit crisis and slowing economy dragged the industry to its worst month since 1991, when George H.W. Bush was president.

October 1, 2008:

From the front page of today's Financial Times: "Investors today are demanding "unprecedented" amount of actual bullion bars and coins and moving them into their own vaults as fears about the global financial system deepen."

Industry executives and bankers at the London Bullion Market Association annual meeting said the extent of the move into physical gold was unforeseen and driven by the very rich.

"There's been an enormous pick-up in investment demand. I have never seen a market like this in my 33-year career," said Jeremy Charles, chairman of the LBMA, the gold refineries cannot produce enough bars."

The move comes as fear grows among investors over the losses of investment vehicles previously considered almost risk-free such as money funds. Philip Garner, associate director of precious metals at HSCM added that investors were not flying into gold simply because they saw it as a haven amid Wall Street's woes, "It is a flight into gold because it is a physical asset."

October 1, 2008:

If you had purchased $1,000 of Delta Air Lines stock one year ago, you would have $49 left.

With Fannie Mae, you would have $2.50 left of the original $1,000

With AIG, you would have less than $15 left.

But, if you had purchased $1,000 worth of beer one year ago, drunk all of the beer, then turned in the cans for the aluminum recycling refund, you would have $214 cash.

Based on the above, the best current investment advice is to drink heavily and recycle.

Its called the 401-Keg

September 29, 2008: Compliments of Dow Theory Letters... Is there anything more prescient and sophisticated than the stock market? Yes, there is, and it's the bond market. But how can we know what the bond market is thinking? There is a way -- it's called the Confidence Index (CI), which is a figure posted every week in Barron's. The CI is a ratio of the YIELDS on the highest-grade bonds and the YIELDS on medium-grade bonds. The bond market is obsessed with safety and the return of the money is considered more important than the return on their money. When the bond market feels confident, it moves toward the higher yields of the less-safe medium-grade bonds. When the bond market doesn't like what it sees ahead, it moves toward the safety and lower yields of the highest-grade bonds.

As bond buyers move to the safety of the highest-grade bonds, the CI declines. When bond buyers move to the higher and less-safe yields of medium-grade bonds, the CI rises.

Below are some CI numbers along with the dates. Many years ago the CI had a wide following. The old formula we used was that the CI projects the stock market trend two to four months into the future.

2007 --
May 25 - 87.1 -- A high CI number showing great confidence.
June 29 - 86.4 -- Confidence slipping.
July 27 - 82.8 -- Confidence still declining.
August 31 - 83.6
Sept. 28 - 85.0
Oct. 26 - 81.8 -- Getting worse.
Nov. 30 - 78.7 -- Dropping below 80, a bad sign.

2008 --
Jan. 25 - 76.1 -- The ominous declining trend of the CI continues.
Feb. 29 - 74.0
Mar. 28 - 72.3 -- New low in the CI.
April 23 - 73.8
May 20 - 75.0
June 22 - 72.6
July 25 - 71.6 -- Another low -- no comment needed; danger flashing.
Aug. 29 - 68.5 -- Under 70 often signals a recession.
Sept. 19 - 74.1 -- A slight improvement.
Sept. 26 - 69.3 -- This is the latest statistic, and it's an ominous new low. The bond market is still opting for the highest-grade bonds and thereby willing to sacrifice yields. On the latest numbers, the bond market is "saying" that the economy will be worse in the period of two to four months ahead. This is a caution signal for all buyers of stocks.

This is all you need to know about the gold and silver markets at the moment:

September 29, 2008:... (Bloomberg) -- U.S. Treasury Secretary Henry Paulson will use all the tools at our disposal' to protect financial markets after the House of Representatives rejected his $700 billion rescue plan, his spokeswoman said...

September 29, 2008: Compliments of The Dow Theory Letters...
The dollar situation has reached an amazing paradox. On the one hand, the nation's enormous level of debts requires dollars to carry the debts (remember my warning --"the huge level of debts amounts to a synthetic short against the dollar?) Thus this morning we see a higher US Dollar. Ironically the same time there are doubts about the very viability of the dollar (which is why gold is up against a stronger dollar). Meanwhile, the stock market sinks in the face of the Bernanke-Paulson plan for the government to buy up the toxic mortgages.

September 29, 2008: Gold -- European banks have reduced their sales of gold to the lowest levels in a decade. Much of the selling by European banks took place between October and December, last year (from today's Financial Times).

Below a chart of three years of weekly gold. Gold has climbed back above its (blue) 50-week moving average, and RSI is above 50 and is trending up. At the bottom of the chart MACD is about to turn up, and the histograms are approaching zero. The Full Stochastic at the very bottom of the chart is moving up and oversold bottom and appear to be heading up.

September 26, 2008: Presidential candidate Ron Paul (he believes in the Constitution) on the bailout. Whew...read on.

Financial institutions are "designated as financial agents of the Government." This is the New Deal to end all New Deals.

Then there's this: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency." Translation: the Secretary can buy up whatever junk debt he wants to, burden the American people with it, and be subject to no one in the process.

There goes your country.

Even some so-called free-market economists are calling all this "sadly necessary." Sad, yes. Necessary? Don't make me laugh.

Our one-party system is complicit in yet another crime against the American people. The two major party candidates for president themselves initially indicated their strong support for bailouts of this kind - another example of the big choice we're supposedly presented with this November: yes or yes. Now, with a backlash brewing, they're not quite sure what their views are. A sad display, really.

Although the present bailout package is almost certainly not the end of the political atrocities we'll witness in connection with the crisis, time is short. Congress may vote as soon as tomorrow. With a Rasmussen poll finding support for the bailout at an anemic seven percent, some members of Congress are afraid to vote for it. Call them! Let them hear from you! Tell them you will never vote for anyone who supports this atrocity.

The issue boils down to this: do we care about freedom? Do we care about responsibility and accountability? Do we care that our government and media have been bought and paid for? Do we care that average Americans are about to be looted in order to subsidize the fattest of cats on Wall Street and in government? Do we care?

When the chips are down, will we stand up and fight, even if it means standing up against every stripe of fashionable opinion in politics and the media?

Times like these have a way of telling us what kind of a people we are, and what kind of country we shall be.

In liberty,

Ron Paul

September 26, 2008: Rumor has it that when the Titanic first hit the iceberg, some passengers engaged in a snowball fight on the

deck...clearly missing the message. Today is not so dissimilar.

September 24, 2008: Compliments of LeMetropoleCafe.com... Frankly, we're surprised, that gold is not already at $2,000 an ounce," declared Citigroup analysts John H. Hill and Graham Wark.

In an analysis published Wednesday, Hill and Wark suggested, "Gold appears to be entering a powerful new phrase of investment demand tied to safe-haven and monetization themes."

Citigroup metals analysts ask why gold is not already at $2,000/oz

"We have been surprised that gold has been so heretofore quiet, and have expected a much strong and more immediate response to the government takeover of GSE [Government Sponsored Enterprises]/mortgage insurance entities, and broker-deal bankruptcies," they wrote. "It is notable that hard-core goldbugs have been proven correct in the decade-long contention that an overwhelmingly vast and complex pool of nested financial derivatives would ultimately result in cascading defaults and ruin for major portions of the banking system. Frankly, we're surprised that gold is not already at $2,000 per ounce."

September 20, 2008: Industrials: Biggest 2 day rally since 1929

Thanks to Igor... The second comment below the chart reminds us that after the 2 day rally was an 86% decline.
Of course the printing presses weren't running at warp speed then. But I can't see profits and employment returning magically.
The charts tell me that this is likely a dead cat bounce.

September 18, 2008: From Richard Russell's Dow Theory Letters...

Hi Richard
Although I am only 53 I have vivid memories of the 1973-74 horror show. I was in first year of university and my dad was in his 40's - a successful entrepreneur and a stock market freshman with a deep pocketbook. He thought margin was the way to maximize profits. Eager bankers and brokers agreed. I knew things were bad when I phoned home only to get a drunken madman (Dad after receiving a margin call). I asked to speak to Mom. She said dad had lost x Dollars that day. After hanging up I went for a walk in the small university town. As I passed a GM dealership I looked at the window sticker on a new Caddy. This put Dad's day in perspective... a 3-4 Caddy day. When I later asked Dad what a margin call was he replied that it was God's way of telling you that you were wrong, and then he just walked away. 73-74 included a lot of Caddy days for my poor Daddy. That bear did more than break my dad financially, it broke his spirit. When the market turned he lacked the will and tools($$$) to go back into the markets. Had he begun his investment experience in 1980 instead of 1973 you would not be reading this E-mail. Lesson learned .... never take the big hit financially... you will never recover.

My Mom, now 87, called today to see how my investments were doing, afraid history would repeat itself. Luckily, following your advice, I am just fine. She wondered if she should sell her Maple Leaf and Krugerrands after today's gold move. I said keep them in your safety deposit box....just in case. Maybe the last man standing with gold theory will include Mom.

I enjoy your daily writings and value your advice. To truly understand markets you have to live through a complete cycle and have to personally experienced the best and worst the bull and bear can muster. Take enough rest time to get better. I think you have a least one more "Greatest Call" left in you.

Your student and faithful subscriber

Blake
P. Creek, Alberta

September 17, 2008:

Scoreboard --- Markets - Percentage of Change for this year
Index 2008
Dow Industrials -16.6%
Mumbai -33.4%
Toronto -11.6%
Singapore -29.0%
Stockholm -25.2%
Sydney -25.3%
Frankfurt -26.1%
Paris -27.2%
Milan -30.4%
Johan. (Comp.) -13.7%
Zurich -18.0%
Brussels -30.3%
London -22.2%
Amsterdam -28.0%
Mexico City -16.7%
Japan (Nikkei) -24.2%
Hong Kong -34.2%
Seoul -26.9%
Shanghai B -65.9%

September 17, 2008: Compliments of Bloomberg... SEC Stiffens Short-Selling Rules Amid Market Turmoil
by Jesse Westbrook and Edgar Ortega

September 17, 2008: Compliments of Bloomberg... Russian Emergency Funding Fails to Halt Stock Rout
by Alex Nicholson and William Mauldin

September 8, 2008: Compliments of Barron's... What $300-a-Barrel Oil Will Mean for You
Interview with Charles Maxwell, Senior Energy Analyst, Weeden & Co.By LAWRENCE C. STRAUSS

September 2, 2008: Change in sentiment -- Do you remember a month ago when the analysts were predicting oil at $200 or even $400 a barrel? Today's heading in the Financial Times, "OIL PRICE OF $100 A BARREL ON HORIZON."

September 4, 2008: Compliments of the New York Times... China�s Central Bank Is Short of Capital by KEITH BRADSHER

September 2, 2008: The Phony Express by Eric Sprott and Sasha Solunac

August 28, 2008: Compliments of The Sovereign Society and thanks to Hagen...
Get this... In the last year � you were more likely to light up a poker table in Vegas � or die in a car wreck � than make money investing in a U.S. mutual fund.
According to Morningstar � just 17 public funds achieved a positive return.
17 out of 2,100 � to be exact!
And yet month after month, millions of Americans pour cash into these money pits.
Where are these funds � and the market � headed next?
I don't know... you don't know... and the guys earning seven figures on Wall Street clearly don't know. (Heck, they're the ones running the funds aground!)
Wall Street's Fundamental Flaw
Most people think you can only choose one side of the coin: Go long or go short.
But they're just plain wrong.
Sure � you can buy a stock � or short one to kingdom come. If you're right, you get ALL the upside. But what if you're wrong?

Then you're in trouble.
Let's be honest � a lot of people ARE in trouble. 99% of all public mutual funds have gone down the tubes. Billions of dollars have been lost � simply because investors trusted their nest eggs to so-called "professionals" on The Street.
They might as well have gone to the track � pushed their savings through the window � and bet it all on a 123-to-1 long shot.
That's one way to invest � if you're looking to boost your blood pressure.

August 22, 2008: Compliments of the Wall Street Journal... Washington Is Quietly Repudiating Its Debts by Gerald P. O'Driscoll Jr.

August 19, 2008: Compliments of The Globe and Mail... Large U.S. bank will fold: Ex-IMF economist by Jan Dahinten

August 18, 2008: Compliments of Richard Russell... Balance an excerpt from the Dow Theory Letters

August 18, 2008: Compliments of Barron's... A Bull on Energy, a Bear on Nearly Everything Else by ROBIN GOLDWYN BLUMENTHAL

August 12, 2008: Compliments of The Telegraph... Stage two of the gold bull market is just beginning by Ambrose Evans-Pritchard

August 8, 2008: I just received the latest issue (August 18) of Fortune magazine. On the cover is a picture of Meredith Whitney, currently the hottest analyst in the nation (she called the credit meltdown a year ago before anyone else knew what was going on). So what's her verdict now? Here it is, fresh out of Fortune --

"Whereas her peers keep searching for some sort of light at the end of the tunnel, Whitney thinks the tunnel is about to collapse. Bank stock investors will get crushed if they jump back in now, she contends because the banks are facing much bigger credit losses than what they've reported so far. Moreover, Whitney is convinced that the economy is about to sink into an "early 1980s-style" recession that will devastate the 10% of the population that became over-extended during the housing boom. "It feels like I'm at the epicenter of the biggest financial crisis in history," says Whitney.

August 8, 2008: Compliments of Grant's Interest Rate Observer..."A rough measure of broad money in the world's 20 largest economies is growing at near 20%, year-over-year, in dollar terms"

August 4, 2008: Richard Russell... "Some items to be noted. According to this week's Barron',earnings on the Dow are now a negative 81.34. The Dow is running at a net loss! This means that the price/earnings ratio for the Dow is infinity. Nothing times nothing = nothing.

It's happened before. For instance, in July 1932 the earnings on the Dow were negative and the P/E for the Dow went to infinity. The Dow in July 1932 sold to a low of 41.22. The Dow started up in July 1932 and continued to 194 in 1937. That was an advance of 373% beginning from a level at which Dow earnings were actually negative or below zero. Could we be there again?

I'm not saying that we're in for a repeat of the 1932-37 bull market. I'm just saying that occasionally great buying areas occur during times of seemingly disastrous statistics."

August 4, 2008: Populations -- One out of every five persons on the planet earth lives in China. One out of every eight persons in the United States lives in California.

August 3, 2008:

Scoreboard -- Changes in 2008 so far --

Aluminum up 23.4%
Copper up 14.2%
Gold up 5.2%
Platinum up 3.7%
Silver up 11.8%

August 3, 2008: Compliments of LeMetropolecafe.com... Henry Paulson has lost the control over US finance, economy
by F. William Engdahl

August 1, 2008: Investment Round table from Business Times Singapore - "Making sense of the bear market"

Chart of the day (31/07//2008)

Compliments of Michael Hyman... The blue line is inflation in the US using the 1980 calculation, before it was dramatically manipulated, the recent Bush administration is the red line

July 31, 2008: Compliments of Richard Russell...

Gresham's law is commonly stated as follows -- "Bad money drives out good money." In the sense that the "good money," the intrinsic money, is hoarded, hidden, taken off the market.

Gresham's law is named after Sir Thomas Gresham (1519-1579) an English Financier in Tudor times.

All modern money is "bad money" in the Gresham sense, since the only reason fiat money is money is because the government deems it to be money. In other words, it's money by government fiat.

Today, fiat money (Federal Reserve Notes) has entirely replaced commodity or Constitutional money. Fiat money has driven out gold and silver coins and also intrinsic money.

I'm looking at an actual bill, series of 1922, that says "Ten Dollars in Gold Coin." On the bottom of the bill it states, "Payable to the bearer on demand." I'm looking at another actual bill, series of 1923, that says "One Silver Dollar." Across the bottom it says, "Payable to the bearer on demand." Both of these bills are history, they are antiques and collectors items.

Thus, Gresham's law still lives, as valid today as when it was when it was put forth in the 1500s. Bad money has again driven out good (intrinsic) money.

July 29, 2008: Compliments of Richard Russell...

Global Scoreboard -- percentage gained or lost so far this year --

INDEX
S&P 500 -13.97%
Frankfurt DAX -20.68%
London FTSE 100 -17.62%
Hong Kong Hang Seng -19.97%
Paris CAC-40 -23.04%
Tokyo Nikkei 225 -14.03%

ASIA
Seoul Composite -17.39%
Singapore Straits Times -16.71%
Sydney All Ordinaries -23.33%
Taipei Taipex -17.54%
Shanghai Shanghai B -41.60%

July 28, 2008: Compliments of the Washington Post and thanks to Seymour... China's Cars, Accelerating A Global Demand for Fuel - MUST READ
by Ariana Eunjung Cha

July 22, 2008: Gold Bullion Essential Facts by Anthony S. Fell - MUST READ

July 19, 2008: Compliments of the Wall Street Journal... Why No Outrage? by James Grant - MUST READ

June 2008: Compliments of Absolute Return... Eric Sprott Survivalist by Barry Cohen

July 24, 2008:

These paragraphs from the August GQ magazine tell you why --

"Oil is the fluid foundation of globalized society and has also contributed mightily to the increase of the global population. After the Second World War (lost by the Germans in no small part because they ran low on gasoline), the spread of petroleum-derived industrial fertilizers caused agricultural yields to double between 1947-1979 -- the world population did the same - and today we are in the ironic position of trying to supplement the oil supply with biofuels reliant on petroleum from fertilizer.

"Petroleum also serves as the primary feedstock for an array of petrochemicals capable, as the word plastic implies, of assuming almost any shape and consistency: I am writing this on a plastic keyboard and you are reading it on a page printed with plastic-based ink while poor people wearing plastic sandals are elsewhere carrying water in plastic jugs.

"According to a recent study, the historical ratio of U.S. economic growth to increased petroleum use is a tidy one-to-one, which naturally leads you to wonder what a peak and decline in petroleum use would do to our habitual prosperity. The moment you see the Die Off graph, you get the idea: If the availability of fossil fuels, which have done so much to increase the productivity of people and nature alike, were to drop off, mightn't this tip everything else into a swoon?"

July 24, 2008:

I hadn�t seen Forstmann�s name in years. He once lorded over one of the world�s most famous private equity firms, Forstmann Little. For a time, it was, as the Journal notes, �the most successful private equity firm in the world, renowned for both its outsized returns and its caution.� When things got a little too crazy, Forstmann chose not to play. For two years, he sat on $2 billion of uninvested funds. That�s discipline you don�t find often, in any era.

Ted Forstmann�s caution saved his firm a lot of pain when the private equity market collapsed later. As the interview made plain, old Forstmann has that bad feeling again. �Buffett once told me,� he said, �there are thee �I�s� in every cycle. The �innovator,� that�s the first �I.� After the innovator comes the �imitator.� And after the imitator in the cycle comes the �idiot.�� We�re in the idiot phase now, he says.

July 21, 2008: An excerpt from LeMetropoleCafe.com... NEW YORK, July 21, 2008: (Reuters) - Senior Goldman Sachs Group Inc investment banker Kendrick Wilson will take a leave of absence to advise U.S. Treasury Secretary Henry Paulson on the nation's banking crisis, people familiar with the matter said on Monday.

Wilson, a vice chairman of investment banking and chairman of Goldman's financial institutions business, has played a key role advising banks on capital raising and reorganizations.

He is expected to help address the crisis gripping banks, Wall Street firms and mortgage lenders, the sources said. He is expected to serve without pay through January, when President George W. Bush's second term ends.

Goldman declined to comment on the matter. Treasury officials were not immediately available.

Wilson, 61, joined Goldman in 1998 and was a leading dealmaker during the bank merger boom of the late 1990s. Previously he was a vice chairman and head of investment banking at Lazard, Freres & Co, which he left amid a period of management turmoil at the partnership.

He was president of Ranieri & Co from 1988 to 1989, a firm set up by famed mortgage securities banker Lewis Ranieri. He was a senior executive vice president for now-defunct brokerage E.F. Hutton in 1987.

The Dartmouth College graduate served in the Vietnam War as a U.S. Special Forces officer�

-END-

Paulson is a Dartmouth man too. As Adrian notes�

Bill,

Banker Leaves Goldman Sachs To Aid Paulson

The GS South Office continues to expand!

QUOTE

While a number of details still must be worked out, Mr. Wilson, 61 years old, is expected to serve without pay, in a period through January, the people familiar with the matter said. President George W. Bush made a personal call to Mr. Wilson in recent days, asking him to assist Mr. Paulson.

END

Being on the inside is so lucrative you don�t need a salary!
Cheers
Adrian

Wilson has been called in to assist Paulson because the markets are a mess behind the scenes.

It is remarkable how many Goldman Sachs honchos end up at the U.S. Treasury in some capacity. GS is like a junior varsity pipeline for the varsity. There can be no doubt the quid pro quo here is a pipeline of information back to GS about financial conditions and the markets. Can there be any wonder why Goldman Sachs out trades the world quarter after quarter?

The odds of the market going lower from here are high and that the bulk of the correction is over. As the US stock market sinks, along with the real estate market, gold and silver are going to become increasingly attractive investments to many who never thought about them before.

July 18, 2008:

Scoreboard -- year to date.

Crude up 34.7%
Ethanol up 5.9%
Heating oil up 41.7%
Natural gas up 40.9%
Unleaded gas up 27.4%

Aluminum up 31.8%
Copper up 23.4%
Gold up 16.2%
Platinum up 24.5%
Silver up 26.2%

Cattle up 1.0%
Corn up 38.4%
Cotton up 2.9%
Lumber up 4.7%
Orange Juice up 13.2%
Soybeans up 26.9%
Wheat down 8.5%

July 16, 2008: Compliments of our good friend Larry Jeddeloh of the TIS Group; strategist and technician extraordinaire...
No institutional or wealthy individual investor (who wants to stay wealthy) should be without Larry's superb research.

July 15, 2008: Compliments of Ron Rosen, who writes the Rosen Market Timing Letter...
"This world has been functioning for decades on faith and trust in paper money and the politicians backing it. One day, hopefully, citizens of the world will know better than to trust their politicians with anything that vaguely resembles money. The pain associated with this learning lesson is in the process of being hammered home. There may be some violent corrections on the way up to the ultimate destination for gold, silver, and their shares. However, the percentage of the price corrections should remain relatively normal. As the climb in price becomes more extensive and violent, the corrections may become shorter in time consumed. A �blowoff� is what the precious metals complex is in the process of beginning.

"The gold market chart of 1978 closely resembles the gold market chart of 2008. The patterns, once a breakout above a previous multi-year high occurred, are nearly identical. If you compare the first seven months after the breakout to a new all time high occurred in 1978 to the first seven months after the breakout to a new all time high occurred in 2008 you will see nearly identical patterns. In 1978 gold rose from the breakout price of $192 to the ultimate high of $873. That was an increase of 450%. If the current gold breakout from the $850 high increases by 450% the ultimate high will be $3,825.00. However, we are living in more dangerous financial times than existed in the 1978 to 1980 period."

July 15, 2008: (Bloomberg) -- The dollar declined to a record low against the euro on speculation Federal Reserve Chairman Bernanke and Treasury Secretary Paulson will say credit-market losses are hurting U.S. economic growth.

The currency also weakened to the lowest level in more than a month against the Japanese yen and to a 25-year low versus the Australian dollar on concern confidence in the debt of Fannie Mae and Freddie Mac will wane even after the U.S. government pledged support for the two-largest buyers of home loans. The pound surpassed $2 for the first time since July 1 after U.K. inflation quickened to the fastest pace in at least 11 years.

July 14, 2008:
Score Board -- Year to date -- All Down with a bow to globalization --
Index
S&P 500 -15.59%
Frankfurt Dax -23.73%
London FTSE 100 -18.51%
Hong Kong Hang S -20.24%
Paris CAC-40 -26.96%
Tokyo Nikkei 225 -14.82%

ASIA
Seoul Composite -17.37%
Singapore Straits Times -15.55%
Sydney All Ordinaries -21.07%
Taipei Taipex -14.83%
Shanghai Shanghai B (China) -39.94%

July 11, 2008:

Dow vs. Gold -- The ratio between the Dow and gold has hit a new low. Today, one share of the Dow will buy only 11.44 ounces of gold -- that's down from 43.75 ounces back in July 1999. In other words, since mid-1999 the Dow has lost 73.8% of its value in terms of real money -- gold. Talk about a silent and insidious bear market, you're looking at one.

July 9, 2008: (Bloomberg) -- Fannie Mae paid a record yield over benchmark rates on $3 billion of two-year notes amid concern that the U.S. mortgage-finance company doesn't have enough capital to weather the biggest housing slump since the Great Depression.

November 6, 2007: (Bloomberg interview with Kathleen Hays) "This is worse than the S&L crisis. This is the first time - this is the worst credit bubble we've ever had in American history. No - ever in American history have people been able to buy a house with no money down, never. That's never happened anytime in the world. So, we have the worst credit bubble. It's going to take a long time to work its way out. You don't cure a bubble in five or six months... It takes five or six years."

Jim Rogers

July 7, 2008: Again, from the Telegraph. Very important in conservative circles.

Of all the leaders, only Stephen Harper - the talented but curiously neglected Canadian prime minister - is able to point to a popular and successful record in office.
Some will regard it as alarming that, in current times, world leadership should rest with Canada. But the Canadian Tories are a model of how to behave during a downturn.
They have kept spending in check and reduced taxes. They are playing their full role in world affairs, notably in Afghanistan.
Rather than canting about saving the world (Mr Harper, in his quiet and courteous way, is a Kyoto-sceptic) they have addressed themselves to curing remediable ills and, above all, to putting their own affairs in order.
If the rest of the world had comported itself with similar modesty and prudence, we might not be in this mess

June 12, 2008: Compliments of The Diplomat... Agenda; Smash and grab The Diplomat Analytic Unit

July 3, 2008: (Bloomberg) -- When President George W. Bush went to his first Group of Eight summit in 2001, a dominant issue was the dollar -- the strong dollar, that is. The U.S. currency was on a record-setting streak, and the free-marketeering president wasn't going to stand in the way.

On the eve of Bush's last G-8 appearance, the dollar's gyrations are again in the crossfire. This time, it is a weak currency, upended by slumping growth, a housing recession and record gas prices, that is gnawing away at the world economy.

The dollar's 41 percent drop against the euro during Bush's term writes the economic epitaph of an administration that set out to restore American preeminence. Instead, Bush heads to Japan next week for his final international summit with diminished leverage as Russian and Chinese influence grows.

July 3, 2008: Scoreboard so far in 2008 for commodities -- (all items below are plus except for pork bellies and wheat).

Aluminum (lb.) 36.7%
Cattle (lb.) 8.12%
Coffee (lb.) 12.7%
Copper (lb.) 34.5%
Corn (bushel) 64.4%
CRB index 32.0%
Ethanol (gal.) 20.8%
Gasoline, unleaded (gal.) 43.4%
Gold (troy oz.) 13.2%
Lumber (1,000 bd. ft.) 3.1%
Natural gas (Btu) 78.9%
Oil, heating (gal.) 54.0%
Oil, lt. swt. crude (barrel) 49.6%
Platinum (troy oz.) 35.7%
Pork bellies (lb.) -19.7%
Silver (troy oz.) 23.9%
Soybeans (bushel) 37.3%
Wheat (bushel) -2.2%

July 3, 2008 -- July 3 (Bloomberg) -- When President George W. Bush went to his first Group of Eight summit in 2001, a dominant issue was the dollar -- the strong dollar, that is. The U.S. currency was on a record-setting streak, and the free-marketeering president wasn't going to stand in the way.
On the eve of Bush's last G-8 appearance, the dollar's gyrations are again in the crossfire. This time, it is a weak currency, upended by slumping growth, a housing recession and record gas prices, that is gnawing away at the world economy.
The dollar's 41 percent drop against the euro during Bush's term writes the economic epitaph of an administration that set out to restore American preeminence. Instead, Bush heads to Japan next week for his final international summit with diminished leverage as Russian and Chinese influence grows.

July 2, 2008: Had you invested and held on since 1980 you would have done best again in the S&P and worst in silver and gold.
But wait, does that mean that gold and silver are now going to catch up to some of the other items?
After all, the S&P is selling at twelve times its 1980 price while gold is only 1.4 times its 1980 price.

Today, these items cost X times as much as in 1950; Y times as much as in 1967, and Z times as much as in 1980:

Gasoline 16 times 1950; 12 times 1967; 3.3 times 1980
Crude oil 49 times 1950; 45 times 1967; 3.6 times 1980
Gold 25 times 1950; 25 times 1967; 1.4 times 1980
Silver 21 times 1950; 9 times 1967; about the same as 1980
Surfboards 13 times 1950; 7 times 1967; 3 times 1980
Homes 28 times 1950; 12 times 1967; 4.3 times 1980
Income 18 times 1950; 7 times 1967; 2.8 times 1980
S & P 500 77 times 1950; 15 times 1967; 12 times 1980
CPI 9 times 1950; 7 times 1967; 2.6 times 1980

July 2, 2008:

Scoreboard -- year to date:

S&P down 12.5%
Frankfurt DAX down 21.7%
London FTSE down 15.1%
Hong Kong Hang Seng down 20.5%
Paris CAC down 22.6%
Tokyo Nikkei down 12.0%

Seoul Composite down 12.1%
Singapore Straits down 16.1%
Sydney All Ordindary down 18.0%
Tapei Telex down 12.9%
Shanghai Shanghai B down 42.6%.