Bank Closing Information – June 25, 2010
These links contain useful information for the customers and vendors of these closed banks.
High Desert State Bank, Albuquerque, NM
First National Bank – GA, Savannah, GA
Peninsula Bank, Englewood, FL
We are not too far away from a run on Comex gold or a Comex delivery default:
Investors took delivery of 39% more Gold from Futures expiring on the Comex than Investors did during the same period last year—further, our sources continue to suggest that June deliveries could wipe out near 80% of Dealer Inventory and the situation in Silver remains much the same
CEF closed with a premium to NAV of 7.7% (Wednesday 6.6%) and PHYS 11.147% (10.598%).
Now China sources newly mined gold from the USA
The latest news from Coeur d'Alene Mines on its sale of gold concentrates on a long term contract to the Chinese has to be seen as yet another positive for the gold price.
Author: Lawrence WilliamsPosted: Friday , 25 Jun 2010
FUNCHAL -
We are now used to China sourcing huge volumes of metals from external sources to drive its industrial machine forwards, but the latest announcement from Coeur d'Alene Mines on its deal to have its gold concentrates purchased and processed by China's largest gold producer suggests that precious metals are on China's vast shopping list too.
China is already the world's largest gold miner, and many analysts now assume - following the country's announcement last year that it had been building up its gold reserves for six years unknown to the West - that it is still expanding its gold holdings in a way that does not necessarily show the gold going into official reserves. And now it appears to be looking elsewhere to purchase supplies of the yellow metal without overtly impacting the market.
What is significant, perhaps, is that this suggests that China's commitment to gold is both ongoing - and likely to increase. The country, through its financial institutions and state television advertising, has been persuading its ever growing middle classes to purchase gold (and silver) as a good investment. There seems little doubt that the state is doing the same thing itself as a means of diversifying its huge reserves.
Coming back to the Coeur deal - as my colleague Dorothy Kosich noted in her article today on the company's new Kensington mine in Alaska (Coeur Mines' controversial Kensington Alaska gold mine now a reality), "The gold concentrates produced at Kensington will be processed by China's largest gold producer China National Gold through an agreement that is the first of its kind between a state-owned corporation of the People's Republic of China and a U.S. precious metals mine.........China Gold will be paying upfront, which means that in terms of timing, Coeur will get paid seven days after shipping vs. the typical two-three months that most concentrate producers must wait, while the metal is being processed at the smelter/refinery."
This is obviously a very attractive deal for Coeur, speeding up its cashflow, although it covers a relatively small amount of gold for the Chinese - but the very fact that this has been put into place suggests that other similar deals are likely to be negotiated with other new producers going forwards. It also means that China's appetite for gold just cannot be satisfied by its still growing domestic gold mine output - as we noted above already the world's largest.
If indeed it is China's plan to increase its gold holdings, but while maintaining an orderly market in the yellow metal, it is a smart move. The main reason, almost certainly, that China did not buy the IMF gold on offer - or even a large hunk of it - would be that to do so would have sent a very overt signal to the market and that the gold price would have skyrocketed as a result. Such a movement in the price might have been seen on global markets as a vote of no confidence in the dollar - and with China's huge dollar-related foreign exchange holdings this would not suit its long term economic policy either.
To buy newly-mined gold production at source is thus a clever ploy. It is not interfering with the gold market directly by being seen to buy, but picking up gold which is actually never reaching the market. It can then move the gold into some interim holding capacity which does not have it showing up in its official reserves until, and unless, it wishes to make this statement to the markets. The fact that, as a result, less gold is actually reaching the market has a substantially smaller impact on it than the overt purchasing of bullion itself.
The move has to be seen as long term bullish for the gold price and is yet another way of limiting downside risk for gold investors. GATA has for a long time been railing against what it sees as gold price suppression by the gold banks and governments, but probably none of this has the potential impact for control of the gold market which can be, and probably is being, exerted by the Chinese - but because this is broadly positive for gold it may not be in that organisation's interests to comment yet it is an equally manipulative policy if indeed it is in effect!
S here is the graph >
Chart courtesy of Ron Griess, The Chart Store
FT Reveals Orszag Resigns Over Inability To Persuade Summers And Obama Keynesianism Leads To Suffering
As we speculated previously, the sudden and unprecedented departure of Peter Orszag, the day prior to the US Budget's formalization (which incidentally never happened as now the US will likely not have a 2010 budget at all, for fear of disclosing to most Americans just how broke the country is ahead of mid-terms) was due to Orszag's disagreement with the administration's, and particularly Larry Summer's, inability to fathom that reckless spending is a recipe for bankruptcy. As the FT reports: "Peter Orszag, Barack Obama’s budget director, resigned this week partly in frustration over his lack of success in persuading the Obama administration to tackle the fiscal deficit more aggressively, according to sources inside and outside the White House." And so, as any remaining voices of reason realize they are dealing with a group of deranged Keynesians, soon there will be nobody left in the administration who dares to oppose the destructive course upon which this country has so resolutely embarked, which ends in one of two ways: debt repudiation, or war. And with the only remaining economic "advisers" being the trio of Summers, Romer and Geithner, you know America will somehow hit both of these mutually exclusive targets.
More from FT:
Mr Orszag, whose publicly stated reasons for leaving were that he was exhausted after years in high pressure jobs and also that he wanted to plan for his wedding in September, is seen as the guardian of fiscal conservatism within the White House.
Other members of Mr Obama’s economic team, notably Lawrence Summers, the head of the National Economic Council, have placed more emphasis on the need for continued short-term spending increases to counteract what increasingly looks like an anaemic economic recovery in the US.
Although Mr Orszag agrees with the need to push short-term spending, particularly in the Senate, which again this week failed to pass a measure extending insurance to the unemployed, the budget director has become increasingly frustrated with the administration’s caution on longer-term fiscal restraint.
Mr Orszag, whom Mr Obama has dubbed a “propeller-head” because of his brilliant facility with projections and spreadsheets, has tried but failed to convince his colleagues to “step up the action”, according to one insider.
In particular, he has collided with the political team, led by Rahm Emanuel, Mr Obama’s chief of staff, over Mr Obama’s 2008 election pledge not to raise taxes on any households earning less than $250,000 a year – a category that covers more than 98 per cent of Americans.
Economists say that would put all the fiscal emphasis on draconian – and highly unrealistic – spending cuts, or else pushing the marginal tax rates on the very rich to confiscatory levels. “Peter feels strongly that this is a pledge that has to be broken if the President is to take a lead on America’s fiscal crisis,” says an administration official not authorised to speak on the matter.
And after Barney Franks's disastrous appearance earlier on, where the market did a shot and an uptick for every lie uttered, we can safely say that this bankrupt country truly deserves all of its elected individuals.
States of Crisis for 46 Governments Facing Greek-Style Deficits
By Edward Robinson – Jun 25, 2010
Californians don’t see much evidence that the worst economic contraction since the Great Depression is coming to an end.
Unemployment was 12.4 percent in May, 2.7 percentage points higher than the national rate. Lawmakers gridlocked over how to close a $19 billion budget gap are weighing the termination of the main welfare program for 1.3 million poor families or borrowing more than $9 billion in the bond market. California, tied with Illinois for the lowest credit rating of any state, is diverting a rising portion of tax revenue to service debt, Bloomberg Markets magazine reports in its August issue.
Far from rebounding, the Golden State, with a $1.8 trillion economy that’s larger than Russia’s, is sinking deeper into its financial funk. And it’s not alone.
Even as the U.S. appears to be on the mend — gross domestic product has climbed three straight quarters — finances in Arizona, Illinois, New Jersey, New York and other states show few signs of improvement. Forty-six states face budget shortfalls that add up to $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities, a Washington research institution. State spending is 12 percent of U.S. GDP.
“States are going to have to cut back spending and raise taxes the same way Greece and Spain are,” says Dean Baker, co- director of the Center for Economic and Policy Research in Washington. “That runs counter to stimulating the economy and will put a big damper on the recovery in the latter half of this year.”
Jim Sinclair’s Commentary
Look at this oxymoron.
There will be no extensions of unemployment benefits based on supposed austerity, but the Federal Government will fill the state’s shortfalls with Federal money.
No extension for unemployment benefits.
A third attempt by the Senate to pass an extension to unemployment benefits failed to win the 60 votes needed for cloture, as lawmakers showed increasing concern about the country’s fiscal position. As a result, the bill will be shelved and 1.3M unemployed will lose their unemployment assistance by the end of the week. The move will also leave several states with large budget holes they had expected to fill with federal money.
While still not a total probe of the Federal Reserve System, the measure is being sold as a first step toward complete transparency of the U.S. central bank. Both the Senate and the House have already passed legislation that is intended to rein in the casino-like behavior on Wall Street. However, these two bills are noticeably different and have to be worked out in committee.
The House’s version would mandate multiple audits of the Fed’s discount windows and open market dealings, which would shed light on the Federal Reserve’s lending activity with U.S. and foreign banks. On the other hand, the Senate’s bill calls for only one audit.
Legislators are now hard at work on a compromise bill that addresses the disparities.
According to published reports, senators in committee have agreed to allow repeated audits of the Fed’s key functions. This will finally give the American public a window into how the central bank works to benefit the “banksters” themselves.
No one knows the exact details yet. But populist Americans are optimistic that whatever comes out of committee is going to impact the speculators and traders on Wall Street, who have driven the U.S. economy to the brink of collapse.
One online commentator remarked on the bill: “The details of the final proposal are still being worked out, but momentum is with advocates of Federal Reserve transparency.”
That is good news.
But even better news is the fact that, according to a new analysis by one of the largest banks in the world, the proposed Wall Street reforms will cost Wall Street as much as a quarter of its annual profits.
Citigroup reports that Goldman Sachs could lose as much as 23 percent of its profits when financial reform passes. Morgan Stanley could lose nearly 20 percent. JP Morgan is facing a hit of 18 percent, and Bank of America could see up to 16 percent of its gains disappear over night.
The losses are attributed to increased regulations that will force financial firms to cough up more of their own money to back the bets they make. There are also a host of new fees and taxes that will go in effect, which the
money trust will have to pay.
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Richard W. Fisher is president and CEO of the Federal Reserve Bank of Dallas.
NOTHING MEANINGFUL HAS BEEN DONE TO ADDRESS FISHER'S CONCERNS OF TWO YEARS AGO !
I see a frightful storm brewing in the form of untethered government debt. I choose the words—“frightful storm”—deliberately to avoid hyperbole. Unless we take steps to deal with it, the long-term fiscal situation of the federal government will be unimaginably more devastating to our economic prosperity than the subprime debacle and the recent debauching of credit markets that we are now working so hard to correct.
It is only natural to cast about for a solution—any solution—to avoid the fiscal pain we know is necessary because we succumbed to complacency and put off dealing with this looming fiscal disaster. Throughout history, many nations, when confronted by sizable debts they were unable or unwilling to repay, have seized upon an apparently painless solution to this dilemma: monetization. Just have the monetary authority run cash off the printing presses until the debt is repaid, the story goes, then promise to be responsible from that point on and hope your sins will be forgiven by God and Milton Friedman and everyone else.
We know from centuries of evidence in countless economies, from ancient Rome to today’s Zimbabwe, that running the printing press to pay off today’s bills leads to much worse problems later on. The inflation that results from the flood of money into the economy turns out to be far worse than the fiscal pain those countries hoped to avoid.
Earlier I mentioned the Fed’s dual mandate to manage growth and inflation. In the long run, growth cannot be sustained if markets are undermined by inflation. Stable prices go hand in hand with achieving sustainable economic growth. I have said many, many times that inflation is a sinister beast that, if uncaged, devours savings, erodes consumers’ purchasing power, decimates returns on capital, undermines the reliability of financial accounting, distracts the attention of corporate management, undercuts employment growth and real wages, and debases the currency.
| Richard W. Fisher |
