Saturday, August 18, 2012

The Next One will be the Big One

Prepare for US and Euro Collapse: The Next One will be the Big OneBy Greg Hunter’s

I don’t see how anyone could say the financial system is stable. The facts say it is anything but well-balanced and steady. The Western world is in crisis with Europe leading the way over the financial cliff. Pick a country in the EU. France, Greece, Spain or Italy are all capable of causing the next financial panic. I can’t tell you how many times I’ve heard or read the word “collapse” in reporting on this spiraling financial crisis. On Monday, German media giant Der Spiegel ran a headline that read “Investors Prepare for Euro Collapse.” The story said, “Banks, companies and investors are preparing themselves for a collapse of the euro. Cross-border bank lending is falling, asset managers are shunning Europe and money is flowing into German real estate and bonds. The euro remains stable against the dollar because America has debt problems too. But unlike the euro, the dollar’s structure isn’t in doubt.” (Click here for the complete Der Spiegel post.) If the Euro goes down, the dollar will follow probably after a short spike. This is just one of many recent examples of the fragility of the financial system.

There is too much debt and not enough growth or taxes to service it. It’s the same problem almost everywhere on the planet. Governments are just printing money to try and make the problem go away. Egon von Greyerz, founder of Matterhorn Asset Management ($5 billion in assets), said this week, “This is why money printing is guaranteed in Europe, the US, UK and Japan. History teaches us that a nation which runs large deficits and increasing debts could never create wealth in the long-run. Wealth has never been created by printing money, and this time, like it has before, it will lead to a financial crash. This time the financial crash will be of a worldwide magnitude.” (Click here to read and hear the complete interview from King World News aka KWN.)

Nigel Farage, outspoken Member European Parliament, also fears another approaching calamity. Just last week, he said, “It isn’t the euro that scares me anymore. What scares me is the sheer level of indebtedness, and the fact that so many of our banks in the Western world are just in such serious trouble that we could face a situation where even if governments wanted to bail them out, the problem may become bigger than them. So I do not discount, at some point, a really dramatic banking collapse.” (For the complete KWN interview click here.)

The next collapse will make the 2008 meltdown look like a day at the beach. According to Professor William Black, it looks like a mathematical certainty. Black is a former top bank regulator who helped unwind the Savings and Loan scandal. He is also a professor of both law and economics and studies why we have “reoccurring and intensifying financial crises.” In an interview this week, he told me, “. . . each crisis is becoming bigger by an order of magnitude. The savings and loan debacle was $150 billion roughly. The Enron era frauds and collapse of the high tech boom was six to seven trillion dollars. Just the household sector (in the 2007-2008 meltdown) lost $11 trillion dollars.” (Click here for the complete Professor Black interview.) If you add in $700 billion of TARP, more than $800 billion in stimulus, zero percent interest rates through 2014, FDIC deposit insurance for investment banks, the implicit guarantee of the “too big to fail” banks by taxpayers and the $16.1 trillion pumped out by the Fed to bailout the world–you have one colossal crisis. The next calamity will get bigger than the last by an “order of magnitude” because bankers, according to Professor Black, “can commit these frauds with impunity.” (Black is referring to liar loans, security fraud of bundling those loans, ratings fraud, and the forgery and perjury of foreclosure fraud and many others.)

It is mostly the fault of greedy bankers who bought off corrupt politicians that allowed all the debt and bailouts to explode. You would think the politicians would make the stability of the financial system a top priority. After all, it is the cornerstone of retaining power. Look at Libya’s Gadhafi. You may not like him, but there was a reason he stayed in power for 40 years. He couldn’t have done it without a stable financial system. (He was also was sitting on 144 tons of gold. That’s a lot of security, especially for a country the size of Libya.) So, whether you are a dictator or a democracy, you want a rock solid system with zero chance of collapse.

Professor Black says, “We are rolling the dice every day to have the disaster.” In short, the next one will be the big one, and it can happen at any time without warning.

Greyerz – Expect Massive Short Covering In Gold Within Weeks

from King World News

Today Egon von Greyerz told King World News, “… the paper shorts in gold and silver are going to have real problems.” Greyerz, who is founder and managing partner at Matterhorn Asset Management out of Switzerland, also said, “The short covering during the next few weeks and during this autumn is going to be massive.”

Here is what Greyerz had to say: “The real underlying figures (for the global economy) are still deteriorating. Just look at what’s happening in Europe now. A few days ago the eurozone GDP came out and it was down .2% for the quarter, and for the last twelve months it was down .4%. So Europe is suffering. But that’s just the beginning in my view.”

Continue Reading at…

Top commodities trader: The seven big mistakes new traders make

There are many reasons why 80% to 90% of novice traders end up losing money. Among the reasons include:

  • Being under capitalized
  • Taking way too much risk (expressed as a % of capital per trade)
  • Attempting to pick tops and bottoms
  • Chasing markets
  • Becoming obsessed by a scenario (e.g., Silver MUST go up)
  • Trading with trading range
  • Being compelled to become a day trader

I believe the above reasons, in composite, account for 80% of the failure among pedestrian traders. (more)

Lindsey Williams - Secrets Of The Elite Video - Mar. 2012 - 3 DVD Set

Treasury Yields Are Soaring

Click to view What's New: Treasury yields have risen significantly since their historic lows on July 25th. At today's close the 3-year note was up 14 basis points (bps), the 5-year 27 bps, the 7-year 37 bps, and the 10-year 40 bps. The 20- and 30-year bonds were up 46 and 50 bps, respectively. Today's Freddie Mac survey listed the 30-year fixed-rate mortgage at 3.62, up 13 bps from its historic low three weeks earlier.

Intermediate Trend Up, Relative Strength Positive, in Technology, Materials, Industrials, Energy, and Financials

by Donald Vialoux, Tech Talk

Interesting Chart

The uranium ETF came alive yesterday. Nice break to the upside on higher volume, a move above its 20 and 50 day moving average as well as early signs of outperformance.


Mark Leibovit’s Recommended List Changes


Adding UEC and NLR (both uranium plays) to the recommended list at the market. I know we’re weighted heavily in uranium, but I’m looking for some further diversification. We already own URRE, USU and DNN.

Stop 1.75. Target 3.75 in UEC.
Stop 13.00. Target 18.00 in NLR.

Gold Seasonality


“So while gold has its monthly ups and downs, you can see that, on a historical basis, we have arrived at gold’s peak performance period of the year. Based on 10 years of data, gold bullion has historically increased 2 percent in August and 4 percent in September.”

– Frank Holmes

Source: BullionBuzzeNewsletter

Yesterday, Gold moved above its 20 and 50 day moving averages.


Why are Gold, Silver Mining Share Prices Not Moving Higher? – Part II

by Julian D. W. Phillips –
Gold Seek

Equities Have Added Risks & Costs

We used this phrase earlier in the first part of the article, when we said “Corporate Risk”. What does it mean?

Mining companies have all the risks of a commercial enterprise except the difficulty in selling its products. What it has little to no influence on is the price it sells its product at. It is at the mercy of all the market factors that contribute to price-making. The only impact the company has is its contribution to supply.

Continue Reading at…

What to Do When Every Market Is Manipulated

by Chris Martenson, Peak Prosperity:

What do the following have in common?

LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money?

The answer is that every single thing in that list is an example of market rigging, fraud, or both.

How are we supposed to make decisions in today’s rigged and often fraudulent market environment? Where should you put your money if you don’t know where the risks lie? How does one control risk when control fraud runs rampant?

Unfortunately, there are no perfect answers to these questions. Instead, the task is to recognize what sort of world we happen to live in today and adjust one’s actions to the realities as they happen to be. The purpose of this report is not to stir up resentment or anger — although those are perfectly valid responses to the abuses we are forced to live with — but to simply acknowledge the landscape as it is so that we can make informed decisions.

In this report I connect the dots on the fraud, noting both what we already know about and what we’d better prudently suspect is happening (but not yet revealed). In Part II, we talk about ways to operate, make decisions, and control risk given the sorry state of affairs in our financial markets.

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