Obama spoke these words recently: "If these folks want a fight, it's a fight I'm ready to have," Obama told reporters at the White House on Thursday, flanked by his top economic advisers and legislators."
Now we'll see what his follow through is. If he breaks up the banks he's bound to make an awful lot of folks mad. Maybe they'll get over it quickly enough sunbathing on their yachts watching the US Military clear off all that beachfront property for them that they will soon be developing. That should cheer them up!
Anyway. Look at Geithner in the back. Does he look scared to you? He doesn't to me. He looks mad as hell. You know what he must be thinking, "Ohhhhhhh no. What am I going to tell my masters? They wanted an inside guy in the White House and they'll blame this on me for not "advising" "him" properly....(sneer). Throw in a hiss for good measure?
Seriously though, when any of ANY of these guys speak I just can't believe them. What will busting these banks up do anyway? I have an idea....that Shadow Banking system we used to have before the market blew up...yeah that one. They're going to reinvent it. Overnight. JPM and GS et al, are all right now spinning companies off to handle all their trading for them. They'll remain "banks" doing "bank" things like taking in boring deposits and giving out small loans...YAWN! But the beast they'll spawn off on us? Well, what else can they do to prop the markets up? The Fed needs a faucet to pour money out of and the banks have a cup that ne'er over-floweth.
One big problem they'll have though is it might be a good political stunt for Americans but the rest of the world might see it differently. Already the markets are off all over the world. Now world leaders get to see politicians duke it out with the banks in the media circus so the Democrats can toughen up their look after the health care debacle in an election year. Maybe they'll even accidentally accomplish something.
I just hope they take off the gloves. Hey, do we get free bread at the match?
An excellent article below. $17 is the lower band for the channel silver has been in. Anything under $17 is a steal and won't be around long.
The biggest danger to silver right now is a market crash. If that happens it's anyone's guess what silver will do. I predict the COMEX prices will crash and you will again see physical shortages of silver with big premiums.
Therefore, waiting for the prices to drop to buy silver will be a moot point because where will you buy it? I started buying silver at $18 just off of $21 and I promise you there was difficulty in even finding the stuff. Most places were sold out. The US Mint even suspended the production of certain coins and ELIMINATED the production of others...
Silver: The Race Is On Ed Zimmer
What do the following items tell you? Price of silver falls by nearly 5% in one day. In less than 11 days the available stock of silver to cover paper shorts falls by nearly 15%. In the first few minutes of oveseas trade, silver begins to recover it's losses.
The answer is that the race to own silver is on. From the US Government saying that it can't get enough blanks to make the silver eagle to the fact that silver stocks are continuing to decline rapidly since the first of the year, the signs are all pointing to an increase in the future. Allow me to point out what I am seeing and you can make up your own mind.
On Wednesday, January 20th, prices in New York for silver plummeted 4.7%, down 89 cents on the day. Yet the World Spot price not only stops the crash, but turns slightly positive in the first few minutes of trade. It would appear that traders outside the US have a different view of the value of the silver metal.
Tuesday, January 19th. the COMEX totals of silver on deposit shows 113 Moz of silver combined on deposit. While that is up slightly from the 112.6Moz in December, the numbers are seriously misleading. On the 8th of January, total stocks were at 111.5 Moz of which 54 Moz were registered to cover contract positions, 57 Moz was eligible to cover contracts, but were actually owned by someone who had them on deposit at a COMEX depository.
Just 11 days later, the stocks of registered silver have fallen to 47.4 Moz while the eligible stocks rose to 65 Moz. As of the 15th, over 128,000 silver contracts were open, amounting to a trade of more than 640 Moz with just 47 Moz available to cover demands for delivery. That's right, there is only physical silver to cover slightly more than 7% of the open silver contracts on the COMEX. Do the math -- 93% of the COMEX contracts can only be covered if the short side can find someone to sell them silver or the long is willing to settle in paper money for a paper silver contract.
Basically, nearly 15% of what was the available COMEX silver is now owned by someone. It only took 11 days for that much silver to disappear into personal hands. Only 47 Moz remains, at which point the shorts develope a new term for "naked short selling", because the only way they can then satisfiy the counterparties is to settle 1) Buy Silver on the open market to settle the demand for delivery or 2) force a settlement in cash, which is the same thing as a default.
I would expect the registered stocks to rise slightly in the near term, as the drop in prices allows some recovery, IF there is silver to be purchased on the open market at levels needed by COMEX. Otherwise, the race to own silver is heating up. Joe Sixpack may not yet be waking up to the facts of silver, but it would appear that savvy traders have laid definative claim on 7 million ounces in just 11 days, you might want to consider your position before the checkered flag waves.
Disclosure: Long GLD, SLV, Physical Metal, retirement accounts
Ed Zimmer is a graduate of The School of the Ozarks (now known as College of the Ozarks) in Southwest Missouri. He spent 14 years in broadcast news in the Midwest covering, among other things, commodities. He is currently manager of a healthcare support facility doing over two million dollars a year in sales.
US ends limits on campaign funding The dissenting justices said limits on spending violated America's constitutional free-speech rights [AFP]
The US supreme court has ended limits on corporate spending for US political campaigns, which will effect this year's congressional races and the 2012 presidential contest.
The 5-4 ruling on Thursday was a defeat for the law's supporters who said that ending the limits would unleash a flood of corporate money into the political system to promote or defeat candidates.
The ruling by the conservative majority transformed the political landscape and the rules on how money can be spent in future presidential and congressional elections, which have already broken new spending records with each political cycle.
The justices on Thursday overturned supreme court precedents from 2003 and 1990 that upheld federal and state limits on independent expenditures by corporate treasuries to support or oppose candidates.
Writing for the majority, Justice Anthony Kennedy said the limits violated constitutional free-speech rights.
"We find no basis for the proposition that, in the context of political speech, the government may impose restrictions on certain disfavoured speakers," he wrote.
Al Jazeera's John Terrett explains how the court order will affect congressional elections The court's conservative majority, with the addition of Chief Justice John Roberts and Justice Samuel Alito, both Bush appointees, previously voted to limit or strike down parts of the law designed to regulate the role of money in politics and prevent corruption.
The court's four liberals, including its newest member, Justice Sonia Sotomayor, who was appointed by Obama, dissented.
In his sharply worded dissent, Justice John Paul Stevens said: "The court's ruling threatens to undermine the integrity of elected institutions across the nation."
The case began when a conservative group, Citizens United, made a 90-minute film called 'Hillary: The Movie' that was very critical of Hillary Clinton, now-secretary of state, as she sought the Democratic presidential nomination.
Citizens United wanted to air advertisements for the film and distribute it through video-on-demand services on local cable systems during the 2008 Democratic primary campaign.
But federal courts said the film looked and sounded like a long campaign advert, and therefore should be regulated like one.
Hillary: The Movie was advertised on the internet, sold on DVD and shown in a few theatres.
Campaign regulations do not apply to DVDs, theatres or the internet.
The court first heard arguments in March, then asked for another round of arguments about whether corporations and unions should be treated differently from individuals when it comes to campaign spending.
After a special argument session in September, the conservative justices gave every indication that they were going to take the steps they did on Thursday.
Results for last year now in, 31 Dec 2008 to 31 December 2009: S&P500 up 23.5%, Dow up 18.8%, Gold price up 20.8%, silver price up 35.6%, platinum price up 56.9%, palladium price up 118.4%, and US $ index down 5.2%...source.
Office of the Press Secretary For Immediate Release January 11, 2010 President Obama Signs Executive Order Establishing Council of Governors
Executive Order will Strengthen Further Partnership Between the Federal and State and Local Governments to Better Protect Our Nation
The President today signed an Executive Order (attached) establishing a Council of Governors to strengthen further the partnership between the Federal Government and State Governments to protect our Nation against all types of hazards. When appointed, the Council will be reviewing such matters as involving the National Guard of the various States; homeland defense; civil support; synchronization and integration of State and Federal military activities in the United States; and other matters of mutual interest pertaining to National Guard, homeland defense, and civil support activities.
The bipartisan Council will be composed of ten State Governors who will be selected by the President to serve two year terms. In selecting the Governors to the Council, the White House will solicit input from Governors and Governors’ associations. Once chosen, the Council will have no more than five members from the same party and represent the Nation as a whole.
Federal members of the Council include the Secretary of Defense, the Secretary of Homeland Security, the Assistant to the President for Homeland Security and Counterterrorism, the Assistant to the President for Intergovernmental Affairs and Public Engagement, the Assistant Secretary of Defense for Homeland Defense and Americas’ Security Affairs, the U.S. Northern Command Commander, the Commandant of the Coast Guard, and the Chief of the National Guard Bureau. The Secretary of Defense will designate an Executive Director for the Council.
The Council of Governors will provide an invaluable Senior Administration forum for exchanging views with State and local officials on strengthening our National resilience and the homeland defense and civil support challenges facing our Nation today and in the future.
The formation of the Council of Governors was required by the Fiscal Year 2008 National Defense Authorization Act which stated, “The President shall establish a bipartisan Council of Governors to advise the Secretary of Defense, the Secretary of Homeland Security, and the White House Homeland Security Council on matters related to the National Guard and civil support missions.” (NDAA FY2008, Sec 1822)
Keep one thing in mind: this is not the ‘70’s! I keep hearing that, “We’ve been here before”, “Inflation is normal”, “Gold went to $850 and then the bottom dropped out”…… and so on.
A few things are different this time around.
1) There are over 2 billion more people on the planet than in the 70’s.
2) There’s a CRAP load more “currency per person” and all asset classes are highly leveraged.
3) There is more debt and other financial instruments than there is GDP in the world. Multiples and multiples. So much so that even taking 10 years of the world’s GDP wouldn’t cover all the monetary obligations of the world.
4) Gold buying in the 70’s was a novelty. Citizens (that is, the FREE citizens of the USA) were not permitted to buy gold from 1933 until 1975. So it makes perfect sense that when the WORLD went to strictly using fiat currency in ’71 and gold became legal to buy people would do so. People literally thought the world would fall apart back then because of the currency concerns. Gold got run up and met the amount of money in the US on a xdollar/ounce basis. When it became apparent that fiat currencies were here to stay for however long, the bottom fell out. There were other reasons as well such as Central Banks selling gold into the market to flood it with gold and intentionally bring the price down.
Anyone who would tell you that inflation is normal and acceptable and tells you that this is all a rerun of a past non-event probably has a lot to lose if the current economic system should fall into jeopardy.
December was a busy month for me therefore I didn't get much posting done.
However, I feel this piece is fitting as we bring in the New Year with an idea of what's to come in our country.
Ever since we terminated the Bretton Woods agreement and severed the ties the dollar has with gold, our nation has struggled to convince the rest of the world that the dollar is actually worth something.
Committing ourselves to a strictly fiat currency, we assured the world that the value of the dollar would be the labor of the citizens themselves. The government would tax our labor and pay back it's debts to the world. That works great as long as people have jobs and the Gov doesn't spend more than our labor can possibly pay for. Which is of course the case today for all thinking men to see. The governments debt obligations are greater than all the world's combined GDP's. A couple of times over. Labor wasn't cutting it. They needed to add more to the pot to sweeten the deal.
Next, we started acquiring rights to the world's oil vis a vis our large oil corporations with the backing of the US Military. You know, those people dying in foreign lands to secure oil for us so we can gas up our Hummers in order to hit Taco Bell at 3:00 A.M. in the morning. Brave souls, thank you so much. But I don't eat fast food...the iPod's great though!
This was bitter sweet for the whole world, hard for them to swallow. By the time we were well into the 70's and moving on into the 80's, fiat currency had a strong foot hold on the economies of the world. Our military was not to be reckoned with, nor was our oil. So our dollar had new value, labor and oil and a little bit of arm twisting here and there; like Bruno would do.
But the government kept spending. And now it appears that as unemployment is rising and the worlds largest oil fields are declining in production the world is starting to question whether or not the US government will be able to meet all of it's debt obligations. We know this is happening because of the declining purchase of Treasury notes by foreign entities. They require more value. When the labor force is diminished and the oil is drying up, what else have you got? Gold? Nah, we most likely leased all that out and besides, we printed up so much money that the price of gold would go so high, governments of the world would have to jump through rings of fire to get people to use the stuff again.
Hey! We've got land! We've got lots and lots of land that those pesky, foreign creditors might be interested in. Only one problem. What to do with it? And oh, there's so many houses on all that land. Wait, wait, light bulb moment! The value of the currency comes from labor and taxes and oil (we could probably add opium from Afghanistan but I'll leave that alone). If the government could figure out a way to add all the homes in America (or most anyway) onto their balance sheet, they wouldn't have to worry about the value of Treasuries anymore, you could just sell stock in Fannie Mae and Freddie Mac because that's an excellent revenue source for the government. So as foreign governments buy less Treasuries we can entice them with something that actually has value, homes. A tangible asset unlike a Treasury which is simply a promise.
So as your children were nestled all snug in their beds, while visions of sugar-plums danced in their heads, Congress confirmed mortgages were dead and the move they made next, filled me with dread.
They passed a bill on Christmas Eve, when NO ONE in the world was watching, that would back stop an unlimited amount of bad debt written off by Fannie and Freddie. Being that the Gov seized both companies in 2008, if your note is held by Fannie or Freddie, you are now another revenue source for the Gov. If you lose your home, the Gov now owns your home. That is until they can sell it again to another revenue source in proper commie pinko fashion. And that person will never pay their mortgage off because the Gov will make sure you lose your job in x number of years and force you to foreclose, keeping that asset on their books forever more.
I'm going to list the article here in it's entirety lest Bloomberg decides to pull it, which they've been known to do....
U.S. to Lose $400 Billion on Fannie, Freddie, Wallison Says
Dec. 31 (Bloomberg) -- Taxpayer losses from supporting Fannie Mae and Freddie Mac will top $400 billion, according to Peter Wallison, a former general counsel at the Treasury who is now a fellow at the American Enterprise Institute.
“The situation is they are losing gobs of money, up to $400 billion in mortgages,” Wallison said in a Bloomberg Television interview. The Treasury Department recognized last week that losses will be more than $400 billion when it raised its limit on federal support for the two government-sponsored enterprises, he said.
The U.S. seized the two mortgage financiers in 2008 as the government struggled to prevent a meltdown of the financial system. The debt of Fannie Mae, Freddie Mac and the Federal Home Loan Banks grew an average of $184 billion annually from 1998 to 2008, helping fuel a bubble that drove home prices up by 107 percent between 2000 and mid-2006, according to the S&P/Case- Shiller home-price index.
The Treasury said on Dec. 24 it would provide an unlimited amount of assistance to the companies as needed for the next three years to alleviate market concern that the government lifeline for Fannie Mae and Freddie Mac, the largest source of money for U.S. home loans, could lapse or be exhausted.
Lax regulation of Fannie Mae and Freddie Mac led to the mortgage companies taking on too many risky loans, Wallison said.
“It turns out it was impossible to regulate them,” he said. “They were too powerful.” He said no one knows how much will be needed to keep the companies solvent.
From 1990 to 1999, Wallison served on the board of directors of MGIC Investment Corp., the largest U.S. mortgage insurer, including a stint on the audit committee, according to Bloomberg data and company filings.
The continued government support of Fannie Mae and Freddie Mac makes buying their debt a good investment, Wallison said.
“It was always safe to buy these notes,” he said. The U.S. government was always going to stand behind them. They’re as good as Treasury notes.”
To contact the reporter on this story: Matthew Leising in New York at firstname.lastname@example.org.
So this guy, Wallison, former counsel for the Treasury, says the Gov was always going to stand behind them (Fannie and Freddie) even though at one point in time they were privately held?
Sorry but does anyone else here smell a set up? This appears to be years in the making.
What can we take from this? Well, it seems evident to me that the Federal Reserve is anticipating either a significant decline in the purchases of Treasuries or they are expecting to need a whole lot more money to fund their deficits. You see, as the trade deficits shrink throughout the world as Americans buy less, foreign governments have less money to buy Treasuries with. But if they can entice the average investor and large institutions to invest in equities like Fannie and Freddie, maybe, just maybe they can make up for the difference in revenue.
Moral of the story, Treasuries are dead. If you have 'em, sell 'em. The only real question here is, to what extent are the Treasuries dead? And here's something to watch out for and you heard it here first.
Will the Gov wipe out the existing share and bond holders in order to compensate current Treasury Note holders with Fannie and Freddie stock once the Gov defaults on them and crushes the currency? Seems to be heading that way in my thinking.
Protect yourselves from these madmen. It's the four B's time. Bullion, bullets, bible and beans.
At the very least, prepare yourselves for the Treasury Tidal Wave coming our way. Get some silver and gold to protect yourselves from the devastating hyperinflation coming our way. Nearly guaranteed at this point.
My background post BS was recruiting engineers for the automotive industry and then I moved on to finance. I had started investing for the first time during the .com boom and did quite well in very short order, thank you. And just as fast got burned. Being in finance I HAD to learn the markets in order to communicate with my high profile clients. Way leads to way and losses outweighing gains led me to understand how rigged the markets are. That's what led me to silver. That's now my goal, to teach others what I have learned.
All information provided on this blog are the personal opinion of the author. I am not a financial advisor nor do I promote the use of them save a very select few. All individuals are responsible for thier own decisions and I encourage all individuals to make decisions based on their own due diligence pertinent to their needs and comfort level. Knowledge just may be your salvation.