Sunday, November 15, 2009

Weekend Musings

Some interesting weekend snippets that we compiled:
China Confirms Dollar Carry Trade is Very Much Alive and is Inflating Asset prices Worldwide

China's chief banking regulator said Sunday that persistently low US interest rates and a declining U.S. dollar are leading to new global economic risks. The U.S. government's promise to keep interest rates low for an extended period is encouraging a U.S. dollar carry trade and leading to massive speculation, Liu Mingkang, Chairman of the China Banking Regulatory Commission, said at a financial forum. Such conditions "are seriously impacting global asset prices and encouraging speculation in stock and property markets," he said.
William Buckler reports in the The Privateer that, the State of The States is Worsening by the Day and only the Stimulus money is keeping them From Leaping off the Cliff

On November 10, the Center on Budget and Policy Priorities announced that all US states are facing the absolute necessity of making steep cuts in their fiscal 2011 budgets. For most of the states, fiscal 2011 will start on July 1, 2010. The major reason for these budget cuts is that federal stimulus payments will run out by late in 2010. Mr Obama’s stimulus has merely postponed the fiscal crisis in the states for a year or so. The stimulus package made up for 30-40 percent of the budget gaps the states face in the current fiscal year. Barring another and even bigger stimulus, the states face HUGE budget cuts in 2010.
For a visual take on the rapidly worsening unemployment situation across the country see Jim Sinclair's interactive map here. What you see will shock you.
Unlike Obama, the British Sure Have the (Masculine Parts) to Take on the Banks

[Under a new legislation to be unveiled this week by the Queen], bankers who are paid “unjustifiable” multi-million-pound bonuses face having their contracts ripped up and their banks fined. In an interview with The Sunday Telegraph, Alistair Darling, the Chancellor, said that the culture of banking had to change and that bankers had to see themselves as “fellow citizens” who had been bailed out by the taxpayer. He admitted that some of the huge bonuses paid to bankers around the world were viewed by the public as “ludicrous”.“Bonuses have been a symptom of the excessive behaviour of some banks over the last few years and even over the last few months,” said Mr Darling.
According to John Embry of Sprott Asset Management The Con Job in Financial Markets Continues

The objective is to keep markets elevated so that the average citizen will ignore the rot eating away at the foundations. Jim Sinclair the brilliant gold trader and a man who very early recognized the true destructive nature of OTC derivatives has coined an expression for the whole sordid procedure. He calls it Management of Perception Economics or MOPE. It is patently designed to mislead the public by producing phony economic statistics to promote the idea that a sustainable economic recovery is underway. [This explains] why gold and silver continue to remain off the radar screens of so many investors [and they would never realize this by listening to the mainstream press and established commentators like CNBC].

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