Saturday, December 12, 2009


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Merry Christmas!
There are two different opinions regarding to the emergence of this world, some people think this world with all live and all events would be a tiny part of the logical causal chain which started with the big bang, the others are convinced of it, that it is finally the fault of Adam and Eve because they have not observed the one holy law of God: "When the woman saw that the fruit of the tree was good for food and pleasing to the eye, and also desirable for gaining wisdom, she took some and ate it. She also gave some to her husband, who was with her . . ." According to this the big bang etc would be a willfully deception of God, because without the doubt in God it wouldn't be possible to test the faith and unbelief of mankind and the sense of this world would get lost. In contrast to the religious view, a causal chain out of cause and effect can not have a beginning recently not emerge out of nothing, this contradicts to the laws of science, therewith there's not only no cause before or for the big bang, but also no energy which would have been necessary for the big bang, even not a tiny disbalance between anything. If two fingers are pressed together then is nothing between them or rather no matter, of course the universe, the human himself and the bright world which surrounds the human not emerged out of the completely harmless nothing between two fingers or without God, this are simply stories which were invented by some humans and which are believed by children if they are told to them early enough, in the first states of the USA such stories were deleted already successfully from the curriculum, so that they weren't taught any more to the children in the schools!
If the big bang could have happened without God, practically everything could have emerged out of this, but this universe was build exactly so, that the suppositions for live are given, for example without voltage no brainwaves could flow, without radiation this world would be dark and ice-cold, without atoms and the possibility to build molecules live would be impossible, the same would be without many other chemical properties and reactions or without elements like oxygen or nitrogen or carbon or hydrogen or . . . , also the lost of time or movement or space or matter or the three states of matter or physical energy or chemical energy or different agencies or continuity or . . . would make live finally impossible. Without intelligence something absolute senseless would have emerged out of the big bang or out of nothing, but of course no live. Yes, the frightening recognition is, that this universe was constructed deliberately exactly so, that the suppositions for live and higher live are given!
For the alleged chemical evolution of live, a first living and survivable unicellular organism would have been necessary, but a just 10 �m large cell, a very complex, perfectly compound, three-dimensional puzzle or a survivable machine out of at least 10 quadrillion pieces (16 g/mol), atoms of different kind and attribute, impossibly could be washed together in an unrealistic puddle out of cytoplasm, be bound together in the same second by many different chemical processes into a flexible unit and get enliven also in the same moment, to start to breathe, to eat, to grow . . . and to produce randomly complete and living self-copies, which will grow up some day to intelligent structured humans. If we are honest we must admit, that even not only one single dead DNA strand could be washed together in a liquid or the belonging to copysystems, already the DNA strands of the first survivable cell must randomly have conformed exactly to the cell construction, beside this DNA strands are written in a very high programming language, until today nobody can understand how or by which encoding systems this codes get transcribed into commands, movements and material constructions. Also for all the different cell organelles or sub-systems of the first survivable cell, must have been directly there the belonging to copysystems or already the first cell division would have been impossible, but how high must be the technology of a material system which could copy itself, try to build a computer which could copy itself!
The functions of cells partially happen on the molecular and atomic level, if the dateless old atoms, out of which we and the cells are set together, would be as big as table tennis balls, an average human brain with exactly 1374 g would take in one time the whole planet earth with its diameter of 12700 km (the average molecular mass of cerebral tissue is 13,5 g/mol, the volume of a table tennis ball is 33,5 cm^3) and a 10 �m large unicellular organism out of 10 quadrillion atoms would take in the whole city Tokyo by a hight of more than 500 meters. If God would build a machine out of 10 quadrillion atoms of different kind and attribute, this machine wouldn't die any more after its commissioning, because it really would be able to breathe, to eat, to grow, to move . . . and to survive independently in its world and to divide itself many trillion times, to conquer the planet and to travel to the moon. If God would construct a machine with such properties, it would be so small, that we even couldn't see it with our multicellular eyes. We have got no idea about the intelligence of God the creator out of nothing, but surly it's not grateful to use the by God constructed brain to say, that a dirty puddle was the inventor of live.
A just 10 �m large unicellular organism is a very complex, perfectly compound, three-dimensional puzzle out of at least 10 quadrillion pieces of different kind and attribute, but a chemical evolution even wouldn't be able to wash correctly together a DNA string or a two-dimensional computer program character string out of 1000 signs, which is written with only 10 different letters, because with every sign, which will be attached after the first sign, the probability that the program was written correctly sinks by the factor 10, so the probability that a computer program out of 1000 signs will be written correctly by random or will be washed together in a dirty puddle is 10^1000 (a 1 with one thousand 0). In contrast to this today we know, that the whole universe contains less than 10^100 atoms totally and that it is less than 10^18 seconds old. If the universe would be 100 times smaller or younger, the chance that the chemical evolution really happened would be 100 times less, if the 1000 sign computer program would be 100 times shorter, the chance that the chemical evolution really happened would be 100 times bigger, so we can stroke out the zeros: 10^1000 - 10^100 - 10^18 = 10^882. We have reduced the whole universe to one atom and an age of one second through only 118 letters! So the iron proof for the absolute impossibility of a chemical evolution was written down!
The live in this world seems to be real, but its existence is only a wonder, so are we the causal chain out of nothing, a network in the dark which thinks about itself or are we made by an unimaginable high intelligence? Some humans will be happy for 100 years and some will be sad for 100 years, but when this life ends will the eternity begin, so why to life for a worthless dust particle when it comes about the entire universe.
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Dec 12.09 commentary..very important.

Good morning Ladies and Gentlemen:
Lots to cover today.
Gold closed down by 6.40 to 1119.40 at 1:30 Friday afternoon.  Ity proceeded to fall another 4.00 in access trading to 1115.40.
The gold traders on Friday's access market have no counterparties so they trade amongst themselves.
The silver market closed down by 9 cents to 17.08
Gold in the physical time zones continue to see brisk buying.  Once the physical buying is over, we see cartel raids of unbelieable proportions.
Friday we saw the comex release estimated volume for the gold trading at a phenonomal 226300 with zero switches.  That volume itself represented 22.6 million oz of gold or 31.%
of yearly gold production. 
During this 6 day raid period, the total comex gold trading was greater than 1.6 million contracts or 160 million oz of gold or 222% higher than yearly production.
The total open interest on gold comex declined slighly to 498000 from 501000.  This news was received by cartel members on Thursday night.  This necessitated another raid as it is imperative
for JPMorgan et al to remove all the speculators  from OI.  Because the regulators are paid to do nothing, this total fraud and manipulation will continue until a default will occur.
The silver comex got the same result, a drop of only 1000 contracts to 123400.
The COT report released after the market, is basis Tuesday.  One can see, the commercials slowly covering as they hit all the stop losses as the weaker longs vacate the arena:
The gold COT report revealed...

*The large spec long position fell by 6,360 contracts and their short position fell by 1,725.

*The commerical long position fell by 9,589 contracts, while their short position sank by 18,634.

*The small spec long position fell by 4,567 contracts, while their long position fell by 157 contracts.





Silver saw the same scenario play out..the commercials  covering their short positions and selling their winning long positions, knowing full well, a concerted short attack was upon them.


I will include the entire COT at the conclusion of my report.


I would like to go into the big news stories of the day.


The first one is probably the most important as it concerns, Ron Paul and the audit of the Fed.  The bill passed the HOuse of Representatives yesterday:


WASHINGTON (Reuters) - The House of Representatives approved the biggest changes in financial regulation since the Great Depression on Friday, marking a win for the Obama administration and top Democrats in Congress.


The sweeping bill, which will have to be reconciled with any measure the slower-moving Senate might eventually approve, aims to safeguard the financial system and ward off future crises of the type that punished the nation in the past year with its deepest recession since the 1930s.

The House voted 223-202 to pass the 1,279-page bill, which was hammered out in the months since last year's crisis convinced Democrats of an urgent need for reform. All of the chamber's Republicans and 27 Democrats voted against bill.

"This legislation brings us another important step closer to necessary, comprehensive financial reform that will create clear rules of the road, consistent and systematic enforcement of those rules, and a stronger, more stable financial system," President Barack Obama said in a statement.

The bill would create an inter-agency council to police systemic risk in the economy, crack down on hedge funds and credit rating agencies, set up a financial consumer watchdog agency, and expose Federal Reserve monetary policy to unprecedented congressional scrutiny, among other reforms.

Faced with a recession and multi-billion-dollar taxpayer bailouts of firms such as AIG and Citigroup Inc , started by the Bush administration, Obama and fellow Democrats have vigorously pushed for fundamental regulatory change.


Republicans and an army of lobbyists for banks and Wall Street firms, whose profits may be threatened, have fought back for months to weaken and delay reforms, criticizing what they call an unneeded and costly intrusion on business.

The battle will continue in the Senate, which is pursuing its own legislation -- more modest in some ways, more radical in others. Once a bill clears the Senate, the two chambers will have to agree on a compromise to send to Obama to become law.

The House bill faced a flood of amendments during floor debate this week, with mixed results for both sides.

In a win for the banking industry, the House voted to reject a measure that would have allowed bankruptcy judges to change the terms of mortgages for distressed homeowners.

Known as "mortgage cramdown," the measure was defeated in a 188-241 decision as a proposed amendment to the broader bill. The vote marked a reversal from the House's passage in March of a "cramdown" measure that later died in the Senate.

On another vote, Democrats beat back an attempt to weaken a key provision of the reforms bill -- the proposed creation of a Consumer Financial Protection Agency.

An amendment proposed creating instead a council of regulators, which the White House said would let banks and mortgage and credit card firms "continue to get away with the practices that helped cause the financial crisis."

In a setback for corporate good-governance activists, the House rejected an amendment that would have required small corporations with market capitalization of less than $75 million to get external reviews of their internal financial controls under regulations passed after the Enron fiasco.

The amendment concerned applying certain audits under the 2002 Sarbanes-Oxley laws to small firms. By rejecting the proposal, which was supported by senior Democrats, lawmakers left an earlier amendment in the bill that would permanently exempt small firms from complying with the rules for audits.


The House approved a section of the reforms bill on Thursday that would impose regulation for the first time on the $450 trillion over-the-counter derivatives market, including credit default swaps like those at the root of AIG's problems.

The bill "will increase transparency in the marketplace and reduce the systemic risk that over-the-counter derivatives can pose to the economy if left unchecked," said Democratic House Agriculture Committee Chairman Collin Peterson in a statement.

Regulators would be empowered to set position limits on financial and commodity-based derivatives, under the bill.

The House also backed an amendment from Democratic Representative Stephen Lynch to limit financial firms to 20 percent ownership stakes in OTC derivatives clearinghouses.

If ultimately approved, the Lynch measure could affect Wall Street giants that dominate OTC derivatives markets -- Goldman Sachs Group Inc, JPMorgan Chase & Co, Citigroup, Bank of America Corp and Morgan Stanley -- and exchange operators such as Nasdaq OMX.

In a rebuke to the Federal Reserve, the bill would open up monetary policy decisions to audits by congressional watchdogs. The central bank fought the provision, arguing it could imply politics can sway Fed decisions and spook the markets.

House Financial Services Committee Chairman Barney Frank said the Fed audit provision could go too far.

"The Fed could be audited," Frank told CNBC television. But he added, "The amendment that was adopted went too far ... It could give the perception that monetary policy is not going to be independent and that would have an inflationary effect."

In addition to systemic risk regulation and the CFPA, the broader House bill would give the government new powers over large banks and set up new protocols for dealing with large firms, known as "too big to fail," that get into trouble.

It would also impose new curbs on executive pay, strengthen protections for investors and, for the first time, set up a federal office to monitor the insurance industry.

Banks stocks ended the day higher, with the KBW Banks index slightly outperforming the benchmark Dow Jones industrial average on broadly bullish trading.





You will note that this bill was an amendment to a previous bill.  The watered down version was defeated.

If the Fed is audited, it will take approximately 6 minutes to realize that fraud has occurred and that the entire gold supply at Fort Knox and other facilities have been sold or compromised.


Ron Paul has been talking with our key central administators over at GATA ( Bill Murphy and Chris Powell) lately.  On December 3 2009  Ron Paul issued a statement that he was going to

include gold manipulation and order the treasury and the Fed to stop meddling into this arena:


December 3 - Gold - $1217.40 up $5.30 - Silver $19.10 down 19 cents

I happened to catch Congressman Ron Paul on C-Span this morning ahead of the Bernanke confirmation hearings. He was talking about the Working Group on Financial Markets being a secret operation, one which benefits the Wall Street few at the expense of the many. He also emphasized the importance of getting the Fed audited via his bill before Congress. For the first time he specifically mentioned it was important for Americans to know what the Fed was doing in the gold market …. mentioning that some of America's gold many be gone due to gold "lending" operations.



This occured Friday afternoon by Ron Paul:


Jim Sinclair`s Commentary

This is going to open some interesting debate as we see the Treasury's response.

Paul Introduces Legislation Requiring Congressional Approval of Treasury Gold Dealings

Washington, DC: Congressman Ron Paul of Texas this week introduced legislation designed to curb the ability of the President or the Treasury Secretary to manipulate worldwide gold prices. The "Monetary Freedom and Accountability Act" restores proper congressional authority over gold policy by requiring that body to vote its approval before the President or Secretary buys or sells gold.

"The Constitution grants authority over monetary policy specifically to Congress alone, not to the executive or the administration," Paul stated. "Yet Congress has neglected its duty for decades, and now our foolish fiat money system is run without challenge exclusively by unelected Treasury and Fed bureaucrats. As a result, the Treasury has been able to engage in the buying and selling of gold to manipulate the worldwide market price. Gold is very important to markets and investors in America and across the globe, and Congress should not allow the administration to interfere in the gold market behind closed doors."

The private Gold Antitrust Action Committee held a press conference this week to discuss federal manipulation of gold markets. The group has uncovered evidence suggesting that the Federal Reserve and the Treasury department, operating through the Exchange-Stabilization fund and in cooperation with the International Monetary Fund, have been systematically working to deflate the price of gold. Because rising gold prices are seen by investors as a barometer of inflation, the Fed has purportedly suppressed prices to disguise the true nature of the financial bubble of the 1990s.

"The Fed wants all of us to think the stock market is not overvalued, and that credit and monetary expansion can create lasting prosperity," Paul concluded. "My bill will make it harder for the Fed and the Treasury to manipulate gold prices, which should always serve as an unbiased indicator of the true health of world markets."





This is the second time that this has been introduced.  The first time was in 2002 where nobody believed that the Fed/Treasury could do such a thing.

Times have changed.  If this legislation is passed, and the world discovers that the usa's gold supply is gone, you will proably see bankers face treason charges.


Watch out for this!!


Here is Bill Murphy's commentary on the Ron Paul bill BEFORE IT WAS PASSED:



Ron Paul's Fed-Bashing Wins Over Lawmakers Wary of Bank's Power

Dec. 9 (Bloomberg) -- For U.S. Representative Ron Paul, the ninth time may be the charm.

After fighting for decades to increase scrutiny of the Federal Reserve or abolish it, the Texas Republican's proposal requiring audits of the central bank's interest-rate decisions is getting traction.

The long-shot 2008 presidential candidate whose anti-tax, anti-government politics struck a chord with a swath of voters is again channeling public frustration with big government, bailouts and rising federal debt. And as Paul trains his sights on his favorite villain, the Fed, many in Congress are listening.

"We live in the age of the people demanding more transparency, and that came out of the failure of Congress to monitor the bailouts," Paul, 74, said in an interview. "I was able to tap into that."

Paul's message, once delivered mostly from the political margins, has found broader acceptance as many lawmakers blame the Fed for failing to curtail excesses that led to the financial crisis.

These lawmakers say that as the Fed's role has expanded, it hasn't sufficiently accounted for putting taxpayers' money at risk, including aid to companies such as Citigroup Inc. and American International Group Inc., both based in New York.

"He's ready with an argument that fits the moment," said Bruce Buchanan, a political scientist at the University of Texas in Austin. "It's an argument that used to seem extreme, but now seems reasonable given the view the Fed contributed to the financial meltdown by failing to exercise due oversight."

House Debate

The House is to start debate today on broader legislation overhauling U.S. financial rules. Included in it is Paul's proposal to remove the shield on congressional audits of monetary policy…



The usa issued two reports on the state of the usa economy and both were extremely good.


The first was on retail sales:



U.S. retail sales rise strongly in November

WASHINGTON, Dec 11 (Reuters) - Sales at U.S. retailers rose more than expected in November as consumers spent more on gasoline and a wide range of other goods, data showed on Friday, raising hopes of a self-sustaining economic recovery.

The Commerce Department said total retail sales increased 1.3 percent last month, the largest advance since August, after rising by a downwardly revised 1.1 percent in October. It was the second straight monthly gain. Sales in October were

Analysts polled by Reuters had forecast retail sales gaining 0.7 percent last month. Overall sales in November were boosted by strong receipts from gasoline stations, increased purchases of motor vehicles and parts, building materials and electronic goods among others. Gasoline sales surged 6 percent, the largest increase since June.

Compared to November last year, sales were up 1.9 percent, the first year-on-year gain since August 2008, a Commerce official said.

The data should help to ease concerns that the economy's recovery could falter because of lackluster consumer spending.

The economy resumed growing in the third quarter, fueled mostly by government spending.

With the labor market starting to stabilize and household wealth rising, there is growing optimism that consumer spending will soon pick up.

Excluding motor vehicles and parts, retail sales increased 1.2 percent in November, the largest increase since January, after being flat in October. Economists had expected a 0.4 percent increase.

Core retail sales excluding autos, gasoline and building materials rose 0.6 percent, advancing for a fifth straight month.

Sales of building materials climbed 1.5 percent last month, the biggest gain since April 2008, after falling 1.8 percent in October. Purchases of electronics and appliances jumped 2.8 percent, the largest increase since January.



Many people have written to me asking that I include both sides of the debate as to whether the economy is rising or going into the doldrums.

I do just that.  Now that I have reported to you on the strong Nov. sales items, how do I explain this:


Texas sales tax receipts plunged in October 
Posted Thursday, Dec. 10, 2009

Texas sales tax collections plunged in October over the same month in 2008, the state comptroller said.

Fort Worth's collections were off 17.3 percent, Arlington's 4.7 percent, Hurst's 11.8 percent and Southlake's 13.9 percent. Sales tax receipts are a major source of income for municipal budgets, and cities have already cut deeply.

The comptroller estimates that Texas' gross state product will decrease 1.7 percent this year.

"Texas is feeling the effects of the worldwide recession," Susan Combs, the state comptroller, said in her weekly economic update.


Tax receipts in  Texas are plummeting and they announce a huge usa surge?

How about this in California?  They are only in their 4th month and already they are in a budget shortfall of 800 million dollars. Remember a state cannot have a shortfall:


Thursday, December 10, 2009

Investing In Soverign Debt: Much Riskier Than You Think

A couple of weeks ago, I covered the topic of default as it pertained to California, Marko's Take: California's Crisis Deepens... Part 2. I did not, at that time, examine the history and likelihood of default of the debt of other countries. The information is STUNNING.

The idea for this piece originally occured as the result of a report by David Faber on CNBC yesterday. What was most interesting about his report was how
often soverign defaults occur. For example, in data presented going all the way back to 1800, there have been 4 separate periods in which "the percentage of countries either in default or restructuring their debt" has risen to as high as 40%!

Despite the world's current economic woes, that figure stands at a "mere" 20% today. But, that number is rising, especially in light of problems reported regarding Dubai, which I believe are far more significant than they originally appeared.

Moody's, a very highly recognized credit rating agency, has published a study as to various statistics regarding sovereign defaults, which primarily covers the period from 1983-2006. It also provides some limited information going back to 1949. The study covers 103 countries from the 1949 starting date. The information revealed is STARTLING.

For example, in 1983 there were NO nations assigned a "junk" status. But, by 2000, that number had reached 38%! In 2006, the number remained high at 36%.

According to Moody's, one country has even defaulted TWICE. Ukraine defaulted in both 1998 and 2000.

Historically, sovereign issuers, assigned a non-investment-grade rating, have a 25% likelihood of defaulting within 10 years of issuance. As to corporate issuers, which ought to possess a MUCH higher probability of default, the corresponding probabiltiy is barely higher at 32.6%.

Finally, once a country does default, the loss suffered by the holder is calculated by Moody's to be about HALF of the original value.

So, if you're thinking about investing in sovereign debt, all I can say is "caveat emptor" or, buyer beware!

I hope you found this essay useful and informative. If you have any comments, pro or con. or have additional information of relevance, I'd love to become aware of it in the comments section immediately below this piece.

I will again be covering Gold tomorrow, given that the sharp correction has caused many people to declare the so-called bubble has burst.



Please take the reporting by Fed officials with a grain of salt.


Speaking of phony numbers, here is a great article on the misreporting of last weeks job's numbers:


The November Jobs Report 

By: Sol Palha, Tactical Investor

-- Posted Friday, 11 December 2009 | Digg This ArticleDigg It! | Share this article | Source: 

A reporter interviewing A.J. Muste, who during the Vietnam War stood in front of the White House night after night with a candle, one rainy night asked, Mr. Muste, do you really think you are going to change the policies of this country by standing out here alone at night with a candle? Muste replied, Oh, I don't do it to change the country, I do it so the country won't change me.

Andrea Ayvazian



The Government's report appears to be suspect. Jim Rogers openly states that all government statistics are blatant lies.  Our belief is that the numbers are manipulated but the degree and depth of the manipulation is increasingly and becoming more open.


ADP conducts are much broader based and more in-depth survey and this survey is based on hard facts. They reported private pay roll losses of 169,000 for November.  The monster Job employment index which measures on line job demand also dropped. These two reports completely dispute the sudden drop in unemployment from 10.2 to 10% and also make one question the government's claims that only 11,000 jobs were shed in Nov.  To make matters worse, the government revised the Oct numbers to 111,000 from 190,000 and September's numbers were revised to 139,000 from 219,000.   Why did it take them almost 3 months to get the facts straight and then how could they be off by such a wide margin?  Something is not quite right.  Now economists are using these readjusted numbers to paint a rosier picture.


If one examines the number of long term unemployed individuals one finds that their numbers are growing. This number grew by 293,000 pushing the total to over 6 million.  Anyone looking for a job for over 27 weeks or more falls under this category.  According to the New York Times, the unofficial employment rate is 17.5%


In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous recorded high was 17.1 percent, in December 1982. This includes the officially unemployed, who have looked for work in the last four weeks. It also includes discouraged workers, who have looked in the past year, as well as millions of part-time workers who want to be working full time. Full Story


A jobless recovery is not one that is sustainable, especially if the stimulus for that recovery was based on borrowed dollars. It would have been okay if the government was running a massive surplus like China and then used its surplus to stimulate a recovery.  Making matters worse is that this money was used to bail out the same institutions that caused this problem in the 1st place. In China this money has been deployed to build new roads, bridges, etc.; essentially, the money is being used to build up China's infrastructure, and at the same time it provides thousands of jobs. China wins on both fronts while we sink deeper into the hole.


ADP and the monster Job employment index are based on hard numbers. These numbers are not fudged. ADP is the largest Pay roll company in the US and Monster is the largest on-line employment agency.   Markets are rallying higher on these dubious numbers. Traders have to be very cautious going forward for as we have repeatedly stated all is not well here. There are so many warning signs in the air and just because the markets are not pulling back immediately does not mean the long term outlook is positive. To put things into perspective, it has been estimated that, even if the economy added between 125,000 to 150,000 jobs a month, unemployment rate would most likely remain above 10% until about 2015.  Note we were very bullish on the markets when everyone was bearish and issued targets of10,500 on the Dow back in Feb 09, almost a month before the markets bottomed, when all the experts were predicting that the Dow was going to crash and burn.  Now that everyone is jumping on the bandwagon, we feel that at the very least individuals should start taking money of the table and wait for a pullback before opening up new positions. 


Once the news starts to get better the focus will be on whether the Feds are going to raise interest rates or not.  Thus believe it or not a string of good news could actually be the event that throws a monkey wrench into this rally.  The markets have climbed a wall or worry so far, and thus they are not too far from the "plunging down a cliff of Joy" syndrome. 


Unlike the precious metal's sector which has actually been driven up, for the most part, by higher demand, the Dow has put in 11 new highs on mediocre to terrible volume. If all was well, the volume should have been surging to new highs too. Instead the opposite has occurred; during the first phase of the move (6469 to roughly 9000), the markets closed in the black on several occasions on volume of over 9 billion shares. The Dow has put in 11 new highs and 13 new intra day highs and not once has the volume surged past the 7 billion mark. We think this is a very telling sign indeed.  While a very strong pull back (if it were to occur) in precious metals and the commodities sector in general can be viewed as a very good long term buying opportunity, the same case could not be made for the Dow and for stocks that are not part of the commodities sector.


If one looks at the 30 year bond yield one will notice that it has been rising, even thought the Fed has kept short term rates at close to zero percent. The Feds do not have the power to determine long term rates; long term rates are determined by the markets. A rising rate environment generally favours commodities, and in the long run at the rate this government is printing money, hyperinflation could indeed become a reality.  An inflationary environment is very bullish for commodities, so one can only imagine the huge upward price swings this sector will experience in a hyperinflationary environment.  


None of this info is being provided to generate fear. Fear is a useless emotion that prevents one from analysing the info in a logical manner; an informed investor is usually a prepared investor. 


In seeking wisdom thou art wise; in imagining that thou hast attained it, thou art a fool.

Rabbi Ben Azai



Here is the second economy newsworthy story and it shows confidence extremely high:



U.S. consumer mood improves in early December [

NEW YORK (Reuters) - U.S. consumer sentiment improved in early December on signs of stabilization in the labor market and widespread discounts to entice holiday shoppers, a survey released on Friday showed.

The Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for December rose to 73.4, just a touch below the year's high set in September.

The latest figure was higher than the 67.4 for November. It was also higher than economists' median expectation of a reading of 68.5 according to a Reuters poll.

The survey's gauge of current economic conditions jumped to 79.1 in early December from 68.8 in November. This was the highest since March 2008 when it was 84.2.

The barometer on consumer expectations rose to 69.7 from 66.5 in November.

"Confidence improved in early December mainly due to widespread price discounting by merchants attempting to spark holiday sales as well as somewhat more positive expectations for economic growth and employment," Richard Curtin, director of the Reuters/University of Michigan Surveys of Consumers, said in a statement.


It seems that the huge discounts at shops influenced consumers that everything is A OK!


The next story is also quite revealing.  The usa wants to increase the Debt Ceiling by a huge 1.8 to 1.9 trillion dollars to 14 trillion dollars:



US debt limit to rise by $1.8 to 1.9 trillion -Hoyer

WASHINGTON, Dec 11 (Reuters) - The U.S. House of Representatives will vote to raise the national debt limit by $1.8 trillion to $1.9 trillion as part of a must-pass defense spending bill next week, House Majority Leader Steny Hoyer said.

The House also will vote to extend unemployment benefits for six months before the end of the year, Hoyer said at a news conference.


This news story sruck early in the session.  It seems that Moscow has changed course and will not sell an oz of gold out of the country like the Americans.


The state owned agency Gokhran which is reponsible to state sales of Gold, Palladium, Platinum and Diamonds has now been ordered to sell 30 tonnes of gold to the Russian central bank:



Russia to buy Gokhran gold next week -source
* State repository to sell 30 tonnes to
* Gold worth $1 billion at market price
* President signed sales decree Dec. 7 - source
* Replaces previous plan to sell to market
* wants more gold, no price pressure

MOSCOW, Dec 11 (Reuters) - Russia's state repository will sell 30 tonnes of gold worth $1 billion to the central bank next week, a source at the body said on Friday, keeping the metal inside Russia after rethinking a plan to sell it on the market.

Central banks worldwide are building up their gold reserves as the metal trades near record highs. Gokhran, the Russian repository, cancelled plans to sell the gold on the open market after information about the sale leaked.

"The primary aim is to make sure this gold doesn't hit the market and influence prices," said Olga Okuneva, metals and mining analyst at Deutsche Bank in Moscow. "It's also a way for the Russian central bank to diversify more into gold."…




I pointed out to you on Thursday, that the Russian central bank has accumulated 20 tonnes of gold per month. This is not going unnoticed.  China also is purchasing massive physical quantities of the metal.

Very shortly all of the above ground physical gold will not be available for purchase.

You will note that the ECB has for the past 4 months shed less than 10 tonnes of gold.


I won't comment on any trading as generally all trades are manipulated.

However this is very noteworthy, the huge drop in price of the 30 yr bond:


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The bond closed at 117.84.

You will recall that I told you months ago that 116.00 would probably be the line in the sand for the bankers.


JPMorgan has huge derivatives on the bonds and this derivative dwarfs all others.

In essence, they have down a futures swap (they call these interest rate swaps) whereby, they own trillions of dollars of long bonds in the future

and shorted  short term treasury bills with zero yield in the future.

Thus it is essential to keep interest rates low to prevent these derivatives from blowing up.

You can get a better understanding on this trade by going to Rob Kirby's paper on the "Elephant in the Room"

published last year.  He is perfectly correct in his analysis.




Last night 3 bank failures occurred.  Losses to the FDIC will be slightly less than 1 billion dollars:


So far this Friday 3 banks have been closed.

Bank Closing Information – December 11, 2009 
These links contain useful information for the customers and vendors of these closed banks.

SolutionsBank, Overland Park, KS 
Valley Capital Bank, NA, Mesa, AZ 
Republic Federal Bank, NA, Miami, FL



We will get complete details on Monday and I will report them to you.


However this was reported by the FDIC as well.  The loss at Colonial has now been upped by a huge 3 billion dollars.

The FDIC is now in urgent need of money:


Colonial failure may cost the FDIC twice as much 
Birmingham Business Journal – by Crystal Jarvis Staff 
Friday, December 11, 2009

Colonial BancGroup Inc.'s collapse in mid-August could cost the Federal Deposit Insurance Corp. more than double the amount it originally projected.

Colonial, which was deemed the sixth largest bank failure in U.S. history after its seizure four months ago, had a current net worth of negative $5.8 billion by the end of the third quarter. That's far worse than its original estimate of $2.8 billion to its insurance fund, according to recent data released by the FDIC.

"It basically says Colonial was a lot worse off than everybody thought it to be," said Bert Ely of Alexandria, Va.-based bank consulting firm Ely & Co.

Also, the FDIC possesses more than $4.2 billion of the Montgomery-based bank's assets currently in liquidation. However, the FDIC also expects to loss more than $3.1 billion on those assets, according to a balance sheet posted by the FDIC.


The FDIC also released this on the state of banks inside Maryland.  The big K bank has reserves below the standard 10%. They received from the FDIC cease and desist orders:


More banks in Maryland getting 'cease-and-desist' orders 
K Bank, Waterfield 'below' adequate in capitalization, federal regulators find 
by Kevin James Shay | Staff Writer 
Friday, Dec. 11, 2009

As bank failures nationally continue to increase, almost twice as many Maryland banks have been slapped this year by federal regulators with cease-and-desist enforcement orders than last year for inadequate capital levels and other reasons.

Two of those state institutions, K Bank of Randallstown, with eight branches, and Waterfield Bank of Germantown have seen their ratio of total capital to risky assets — a key measure of financial health that regulators closely monitor — decline below adequately capitalized levels in the past year.

The ratio of K Bank, the tenth largest bank headquartered in Maryland with state deposits of $564.8 million, dipped to 5.88 percent in September from 10.98 percent a year ago.

A bank has to maintain a total risk-based capital ratio of at least 10 percent to be considered well-capitalized by the Federal Deposit Insurance Corp. Between 8 percent and 10 percent is adequately capitalized, below 8 percent is undercapitalized and under 6 percent is significantly undercapitalized. If the ratio drops below 6 percent, the FDIC can change that bank's management and force other corrective actions.

In its order to K Bank last spring, the FDIC noted that the institution was operating with inadequate capital "in relation to the kind and quality of assets" and had an "inadequate loan review program."


As you saw above, the Feds released data to suggest that the economy is rolling along as evidenced by the huge increase in retail sales.


How do you explain this?:


Food Stamps Go to a Record 37.2 Million, USDA Says 
By Alan Bjerga

Dec. 8 (Bloomberg) — A record 37.2 million people, or about one out of every eight Americans, received food stamps in September, as the recession drove a surging jobless rate, according to a government report.

Recipients of the subsidy for retail-food purchases climbed 18 percent from a year earlier, according to a statement posted today on the U.S. Department of Agriculture's Web site. Participation has set records for 10 straight months.

The government boosted food aid as unemployment soared, heading to a 26-year high of 10.2 percent in October. The jobless rate cooled to 10 percent last month, the Labor Department said on Dec. 4.

"We've been working to get that money out the door" to families that need assistance, Deputy Agriculture Secretary Kathleen Merrigan said last week in an interview.

Nevada had the biggest increase in food-stamp participation rates from a year earlier, surging 54 percent, followed by a 46.5 percent jump in Utah, according to the USDA. Texas had the most recipients at 3.1 million, followed by California with 2.9 million and New York with 2.6 million.


This next story worries me greatly. The story is self explanatory:

Bankers might be feeling public's wrath — literally 
By Daniel Tencer 
Thursday, December 10th, 2009 — 4:13 pm

A Los Angeles lawyer who had represented a failed subprime mortgage lender is found dead outside his home, having been shot in the head.

Three men allegedly invade the home of a former subprime lender, and are arrested after reportedly injuring three people inside.

Vandals target the home of the former CEO of the Royal Bank of Scotland, smashing windows in the banker's home and car.

Those are just three notable incidents of violence aimed at people who were in some way linked to the financial crisis that has unfolded over the past year. And while in many of those cases it's unclear whether the incidents were politically motivated, or motivated by financial issues, or just a coincidence, the cases fit into a pattern of escalating crime and violence in the wake of the recession.

Matthew Padilla of the Orange Country Register reports on a series of violent incidents in California in some way linked to the financial collapse.



How about this story from Opposition Finance critic, Joyce,  in Australia concerning the usa government finances:

Joyce warns of US 'Armageddon' 
December 11, 2009

THE OPPOSITION finance spokesman, Barnaby Joyce, believes the United States government could default on its debt, triggering an "economic Armageddon" which will make the recent global financial crisis pale into insignificance.

Senator Joyce said yesterday he did not mean to alarm the public but there needed to be a debate about Australia's "contingency plan" for a sovereign debt default by the US or even by a local state government.

"A default by the US means complete economic collapse around the world and the question we have got to ask ourselves is where are we in that," Senator Joyce said.

His warning came as the Rudd Government ramped up its attack on Senator Joyce as an economic extremist by highlighting his strong opposition to Chinese sovereign investment in Australia.

The Treasurer, Wayne Swan, said it was a cause for concern that Senator Joyce had been elevated "from the reactionary fringe of our economic debate to the second-most senior economic policymaking job in the alternative government".



Here is another story on the health of Greece, and  Ireland. The author Bo Neilson states that these countries will have to leave the Euro because of non compliance:


(both countries are basket cases0


Ireland, Greece May Leave Euro, Standard Bank Says (Update2) 
By Bo Nielsen

Dec. 11 (Bloomberg) — Greece and Ireland are among countries in an "intolerable" economic situation, which may lead to bailouts or even an exit from the euro area by the end of next year, according to Standard Bank Plc.

The absence of a mechanism to permit so-called fiscal transfers within the 16-nation region may undermine the exchange-rate system, said Steve Barrow, head of Group of 10 foreign-exchange strategy at the bank in London. Concern some nations will need to be rescued may drive the premium investors demand to hold 10-year Greek debt instead of benchmark German bunds to 400 basis points next year, from 214 basis points today, he said. The Irish premium may also jump, he said.

"Countries like Ireland and Greece may not be able to grow out of the current crisis," Barrow said in a telephone interview today. "With interest-rate cuts, exchange-rate depreciation and significant fiscal support all off limits for these countries, bailouts or even pullouts from EMU may happen next year."

The Irish Finance Ministry called the suggestion it might leave the euro area "uninformed comment," and Greece said there was no chance it would leave.


OK. before leaving you, here is the COT report I promised you:
COT Gold, Silver and US Dollar Index Report - December 11, 2009

-- Posted Friday, 11 December 2009 | Digg This ArticleDigg It! | Share this article | Source: 

Gold COT Report - Futures

Large Speculators

















Change from Prior Reporting Period


















Small Speculators






Open Interest















non reportable positions

Change from the previous reporting period


COT Gold Report - Positions as of

Tuesday, December 08, 2009


Gold COT Report - Futures & Options Combined

Large Speculators

















Change from Prior Reporting Period


















Small Speculators






Open Interest















non reportable positions

Change from the previous reporting period


COT Gold Report - Positions as of

Tuesday, December 08, 2009



Silver COT Report - Futures

Large Speculators

































Small Speculators






Open Interest















non reportable positions

Change from the previous reporting period


COT Silver Report - Positions as of

Tuesday, December 08, 2009


Silver COT Report - Futures & Options Combined

Large Speculators

































Small Speculators






Open Interest















non reportable positions

Change from the previous reporting period


COT Silver Report - Positions as of

Tuesday, December 08, 2009


Here is the final trading of the comex for you to see for yourselves the trading activity:
Trade Date
Daily Settlements for Gold Futures (FINAL)Trade Date: 12/11/2009
Month Open High Low Last Change Settle Volume Open Interest
DEC 09 1132.7 1141.4 1110.8 1115.4 -6.3 1119.4 912 2,708
JAN 10 1132.9 1143.0 1110.0 1115.9 -6.3 1119.5 1,671 3,843
FEB 10 1133.3 1143.4 1110.2 1119.6 -6.3 1119.9 215,569 337,300
APR 10 1134.4 1144.5 1111.8 1119.0 -6.2 1121.2 4,688 50,296
JUN 10 1137.0 1145.4 1112.8 1117.8 -6.2 1122.3 1,943 23,351
AUG 10 1137.4 1137.4 1119.0 1119.0 -6.1 1123.6 213 11,565
OCT 10 1138.0 1138.0 1116.4A 1124.6 -6.0 1125.0 29 4,107
DEC 10 1139.9 1149.6 1117.4 1122.0 -6.0 1126.7 1,163 20,405
FEB 11 1132.8 1139.0B 1125.0 1125.0 -5.9 1129.0 42 2,989
APR 11 1131.3 1131.3 1127.3 1127.3 -5.8 1131.6 4 1,127
JUN 11 - - - - -5.8 1134.6 5 8,268
AUG 11 - - - - -5.7 1138.1 - 675
OCT 11 - - - - -5.6 1142.1 - 357
DEC 11 1145.0 1145.0 1145.0 1145.0 -5.6 1146.2 2 11,357
JUN 12 - - - - -5.4 1161.0 - 5,668
DEC 12 - - - - -5.3 1178.5 - 9,279
JUN 13 - - - - -5.1 1198.8 - 927
DEC 13 - - - - -5.0 1220.7 6 2,884
JUN 14 - - - - -5.0 1243.5 - 886
Total 226247 497992

Last Updated 12/11/2009 06:00 PM
In conclusion, you can see the vicious headwinds we face as the corrupt bankers throw everything but the kitchen sink
at us.
All I can advice you to do is to buy physical gold and silver at your friendly Bank of Nova Scotia or any bullion bank, put the
metal away and watch the proceedings.  Do not play on the comex as it is crooked to the highest degree.
Do not play the NYSE as it is a totally manipulated and you do not want to hold securities when the music stops.
However, high grade gold and silver companies is fine to hold as is Central Fund of Canada.
Have a great weekend

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