Saturday, February 13, 2010
Thursday, February 11, 2010
Pay no attention to the sharp fall. The reason for the fall is many benefits have been cut off as the year has run out and workers could not find a job. Their benefits run out and the BLS just removes them from the total pool.
I would like to report that tax revenues are falling in all states.
This is the big story of the day...the complete failure in the 30 yr auction. Please note the high yield of 4.72%, the extremely high 61.57% indirect bid and
the extremely low bid to cover ratio of only 2.36. The high indirect bid is the bid from overseas using the dollar swaps. It is not foreign but the usa government buying their own debt.
The low bid to cover ratio means only the dealers bid for the bonds, nobody else. The few who did bid and not part of the government demanded a higher yield.
Once the dealers buy the bonds they hand these over to the Fed. Here is the result of the auction:
This chart shows the massive buildup of dollars on the Fed balance sheet. These excess reserves are now 1 trillion dollars:
The term Non-Borrowed Reserves of Depository Institutions is an euphemism for excessive reserves. The Fed does not want us to know that the banks are not loaning.
There are some terrific commentaries on this subject. The best one was by Dave Kranzler. He is bang on!:
As I indicated above, gold rose over 18 dollars today. One of the crazy reasons given for golds advance was that Greece will not use its 112 tonnes of gold. Instead the ECB will print the euros needed to bail out
Yesterday, I forgot to mention that Viet Nam devalued its currency and today, it registered a premium of 54.00 per oz premium over spot. Viet Nam is becoming one of the largest purchasers of gold today as their entire real estate is backed by real gold. They need to import vast amounts of gold.
Dave, also mentions that the usa has major states in trouble which will require massive fiat monetization. Please pay special attention to what he says.
Here is Jim Sinclair on the subject:
Please note: moral support but no substance. There is no plan.
The Fed announced again that they were going to drain one trillion dollars from the system when the time is right. They are now "going to test" the system on its drainage plan.
This is nothing but utter garbage. They cannot drain 5 cents.
This is what the legendary Jim Sinclair states on this subject:
The Fed has no way to drain this liquidity because of the huge losses in 2008 and 2009 and these cracks must be filled with real money from other sources which are not forthcoming.
You will hear this until doomsday and nary a cent will be recalled.
This will surely help the banking industry:
This will surely knock the socks off the Federal Debt Limit...Fannie Mae and Freddie Mac buying delinquent mortgages. Here are two stories:
(from Jim Sinclair)
World bond sales are tumbling as everybody is becoming risk averse..Please refer to the Fed St Louis Chart on excess reserves above in my commentary, to understand what is happening throughout the world.
I guess the whole world is QEing with their own currency. And gold goes down on some days?
Here is this stunning article by Bryan Keogh on the bond sales tumbling by 90%:
Here is Jim Sinclair on the above article:
Oh dear, another state has declared a state of emergency. Today it is New Jersey, one of the 7 states we told you that were basically bust:
Get a load of this article:
I know there is a lot of reading tonight, but the last article by author Egon von Greyerz is a dandy. The author puts together everything I have commented upon these past few years.
I am downloaded the entire article for you. You should keep this article on hand at all times and refer to it as the debt crisis magnifies in the days ahead.
I will now say good-buy and I will report to you on Saturday with fresh data on bank failures and the COT report.
Here is the article by Von Greyerz: