Tuesday, November 6, 2012

Game Over

The best argument against democracy is a five-minute conversation with the average voter. - Winston Churchill
Thankfully this election season is finally over.  This had to be the most brain-damage inflicting election I've experienced.   I wrote a blog piece about a month ago in which I declared Obama the winner, why I was making that call and why it doesn't matter in terms of fiscal/economic policy who, or which Party, sits in the Oval office.  The only difference it makes is to the specific wealthy individuals and corporations who purchased the winning candidate (see Citizens United v. Federal Election Commission).

The shame of this election is that the Republicans had a chance to win and blew it by nominating Romney.  Obama was ripe for defeat.  He's done a terrible job managing the country and he pissed off a lot of his support base by reneging on most of his 2008 campaign promises.  Just like in 2008 when the country was set up to vote for any Democrat, the stage was pretty much set for an anybody but Obama election.  But the Republicans had to select a candidate from an extreme Christian sect who is socially retarded, ethically bankrupt and a serial liar.

I think he could have overcome the latter two problems, but his stance on Roe v. Wade and planned parenthood alienated him from a significant segment of the voting populace - that would be women.  The fact that he urinated on 47% of the electorate by being caught on tape saying "they don't matter" didn't help his cause either.  And his coup de grace was picking Paul Ryan, the mentally challenged intellectual zombie from Wisconsin who looks like a cross between Eddie Munster and Pee Wee Herman.  That sealed the deal as Ryan was seen as wielding a hatchet that would chop down medicare and other senior citizen  entitlements.  Game, set, match.

But, the good news is, the metals stand to benefit from a huge snap-back rally from the beating they took in October, which was partially from the irrational fear that a Romney victory would be bad for precious metals and primarily from the the automated black box hedge funds dumping the metals because October historically is negative ROR month.  Well guess what?  November, going back to 1971, is historically the second best positive ROR month.  I would suggest that everyone reading this start loading up on even more gold and silver (not GLD, SLV, CEF or GTU).  You'll glad you did when you look up in four years to see that outstanding Government funded Treasury debt is well over $20 trillion, possibly as high as $25 trillion. Gold and silver are already up $7 and 23 cents as I write this...


  1. Next crisis ahead: raising the debt limit


  2. On one side of the problem ledger: debt ceiling, sequestration, fiscal cliff, new taxes, real cost of Obama care, existing costs of social sec medicare, medicaid, prescriptions, interest costs to rise, defense costs out of control and food stamps.

    On the other side we have derivatives, MBS, HFT, Concentrated positions where the short side cannot be filled,

    I'll stop there-or others can add--no shortage of problems. And many sides of the problem ledger.

    What makes you think there will be a 4 years from now? As we know it. And if we re-enter the slowdown what other triggers are there?

  3. I think the mining shares just might start turning to the upside after their drubbing.I own ATN.to, ANV, HL, AUQ, NGD and some GDXJ.

  4. Wonder what America will look like in 4 years. Wonder if there will be an America in 4 years.

    (Eddie Munster/Pee Wee Herman. Hilarious!!)


    October 31, 2012
    Blind faith has gotten us into trouble repeatedly throughout history. Just consider the rogue’s gallery of false idols, dictators, and charlatans we have followed, hoping for something different, something better. That misplaced conviction corrupts and destroys.
    Daily life does require we put our trust in others, but we should do so judiciously. Each one of us has our circle of competence: performing brain surgery, hitting home runs, defending the accused in court or teaching high school math. However, doctors make mistakes and patients die, ballgames are lost on errors, innocent people go to jail and some students don’t understand division. In some cases, the fault is ours, for failing to consider that the people in whom we’ve placed our faith are incompetent, that the supreme confidence they have in their own ability is unjustifiable.
    Which leads us to the blind faith placed in our current Federal Reserve Chairman Ben Bernanke. Mr. Bernanke told us in 2006 “that house prices will probably continue to rise,” and that he did “not expect significant spillovers from the subprime market to the rest of the economy or to the financial system” in 2007.1 In 2008, he then told us that Fannie Mae and Freddie Mac were “adequately capitalized (and in) no danger of failing” and that the “Federal Reserve is not currently forecasting a recession”.2 And, in 2009, he said

    “The Federal Reserve will not monetize the debt."3 A good education, deep experience, and a nice title don’t make you right. Our leaders in Washington seem to have recklessly accepted Fed decisions that threaten the delicate weave of economy and society.
    Despite Mr. Bernanke’s poor batting average in predicting the future, his confidence appears unshaken. He continues to speak with the same self-assurance he always has, even though what he thought wouldn’t happen did, and what he thought would happen didn’t. He’s betting trillions of dollars that he’s right – counting on an academic argument alchemizing into reality. If Mr. Bernanke were experimenting in a medical lab, instead of a monetary one, the FDA would require extensive clinical trials proving safety and efficacy before he could release his grand experiment on the American public.

    The Fed’s actions embody our gradual shift from laissez-faire to government-managed capitalism. We
    can now work less, thanks to more expansive government subsidies, with almost 90% of our nation’s tax
    receipts now paid directly to individuals, versus around 30% in the 1960s.5 And, we no longer need to
    depend on other countries or even our own citizens (directly anyway) to lend us money because our
    own government, in an accounting sleight of hand, currently lends itself the majority of the funds
    necessary to finance its deficits. We are a nation feeding on itself.

    Nobody has all the answers. Genius fails. Experts goof. Rather than blind faith, we need our leaders to admit failure, learn from it, recalibrate, and move forward with something better. Although we cannot impose our will on this Administration as to Mr. Bernanke’s continued role at the Fed, we would at least like to make our case for a Fed chairman more aware (at least publicly) of the unintended consequences of ultra easy monetary policy, and one with less hubris. As the author Malcolm Gladwell so eloquently said, “Incompetence is the disease of idiots. Overconfidence is the mistake of experts…. Incompetence irritates me. Overconfidence terrifies me.”


  6. Jim’s Mailbox

    November 7, 2012, at 11:22 am
    by Jim Sinclair in the category Jim's Mailbox | Print This Post | Email This Post
    Dear Mr. Sinclair,

    I have been an acolyte of yours for 5 years now, many thanks for kindly sharing your vast expertise.

    I am what is often termed an ‘old Asian hand’, having lived and owned businesses in various countries in the region for over 25 years, keeping a close eye on China perpetually.

    I (and others) believe China will use its power over the gold market as a last resort in times of domestic political crisis. A significant repricing of the metal will be the same as putting cash into the pockets of their population, whom they have been encouraging to buy gold for some time now. China can easily achieve this. Look what happened to the price of gold last time they officially adjusted their holdings. Their actions will, at some stage, help propel the price northwards significantly.

    What few westerners understand is that any Asian family with any kind of wealth ALWAYS owns at least some gold. Gold has always been money and a store of wealth for this region, which also has the majority of the world’s population.

    Thanks again,
    CIGA Steve

    Dear CIGA Steve,

    You are absolutely correct. The China bashers that might argue with you are people who may have visited China a few times on a zip trip and conclude they understand the Chinese.

    The truth is that the Chinese do not understand the Chinese, nobody not Chinese has a rat’s chance of knowing the Chinese, certainly not some suit on Wall Street talking on Bloomberg.


    1. Hu calls on China to develop domestic economy

      In a speech opening the Communist Party congress that will see the first leadership change in a decade, Mr Hu said: “In response to changes in both domestic and international economic developments, we should speed up the creation of a new growth model and ensure that development is based on improved quality and performance.”

      “We should... unleash the potential of individual consumption,” he said, adding that China “must unswervingly encourage, support and guide the development of the non-public sector” to ensure that all enterprises can enjoy “a level playing field” no matter who their owners are.


  7. Chinese private investors eye overseas mining

    Private investors hold nearly 50 percent of the exploration rights of the country's non-oil and -gas resources, and more than 90 percent of non-oil and -gas mines, according to Gan.

    "Chinese investors are expected to throw trillions of yuan in mining from 2013 to 2015. Half of the investment will be made by private capital," Gan predicted.

    "Resource-rich regions such as North America now face great pressure to attract foreign investment. For Chinese private investors, I think it's worth tracking opportunities in these regions," said Guo Jianwei, a senior official for monetary policy from the People's Bank of China.

    Vice Premier Li Keqiang said in a congratulatory letter to the forum that China will continue to expand mining exploration according to domestic needs with the advance of industrialization and urbanization.


  8. America Votes for National Suicide

    Quo Vadis America?

    It's very simple:
    Money as debt with compound interest leads to the concentration of wealth in the hands of the money masters until the system collapses.

    Neither Obama's "tax the rich" (which in fact is NOT about taxing the real rich, but the middle-class) nor Romney's spending reduction adresses the REAL problem which lies in the way money as debt is constructed.

    It doesn't matter who is elected, the mathematically founded exponential rise of debt and with it the concentration of wealth will continue - until this cancersystem will collapse.

    But there would be a quite simple solution to stabalize the system for several decades - but since the mass media are under control of the 1%, this is only theoretically:

    The 1% that posseses 80% of the country, is not the hard working average people that are the backbone of EVERY society and that have been the backbone of the USA, too.
    This 1% is sucking the hard working people dry because how money as debt is constructed.
    Every Dollar surplus is someones debt.
    This means: taking the wealth from this 1% away, makes 80% of all debt and the burden on the whole economy disappear.
    Taking the extreme concentration of wealth away, annihilates the debt and is the base to reduce taxes tremendously afterwards.

    There is no way around mathematical laws. And money as debt with compound interest leads to exponential concentration of wealth at one spot, while the rest is drowning in debt.


  9. From what "sect" is Obama? The Jeremiah Wright racist, red, hate America sect? That works I guess. Why does the shot at Mormons surface here? Why the childish ad hominem "Eddie Munster" attack on Ryan, not to mention the puzzling "zombie" comment? What about Biden's foot-in-mouth disease and hair plugs? What about Obama's skinny feminine-looking hands and wrists and what about those monkey ears? Abortion is a homicide of a breathing, DNA-equipped human being. Lots of people, if you haven't noticed, think it's wrong - dead wrong.

    GOP lost with admittedly mediocre candidate against a terrible incumbent Prez due to massive establishment media conspiracy, ignorant and miseducated populace (esp young people) and candy-ass conduct of country club GOPers not knowing with whom they are dealing: marxist, union hall, alley fighting, knife-wielding reds who play by no rules and pursue power as a religion - and then wield it. Harder Republicans are needed; the kind that play hard ball but none are on the horizon.

  10. Willard Romney is not in a 'Christian sect'' he is in a cult. Mormonism is not a brand of Christianity, it is a recently created cult.

  11. Jim Willie (Part 2/2): the rush for physical gold is on

    Jim Willie of GoldenJackass.com talks to GoldMoney's Alasdair Macleod about the increasing transfer of wealth from Western countries to their Eastern counterparts, and the hugely bullish picture for silver at the moment.

    The huge flow of gold from West to East is evidence of this wealth transfer. Willie also talks about plans by Germany, China and Russia to create an alternative payment system to replace the US dollar in multilateral trade. According to Willie it is going to be gold-based and will be peer-to-peer -- eliminating many sources of profit that currently exist for banks. He also points to increasing talk from certain influential people about the possibility of a renewed gold standard.

    Willie sees big outflows of gold from London to China, with 5,000 tonnes leaving London from March to mid-June according to his source. As banks are desperately looking for physical gold official reserves might be seen as a tempting source. He senses a scandal were such gold has been replaced with gold certificates to satisfy physical demand.* In his view, Fort Knox likely does not hold the gold that it is claimed exists there.

    On the subject of silver, Willie expects the white metal to outperform gold threefold once the prices of both metals start rising. Stockpiles have been used up over recent decades, but the monetary and industrial demand for silver is continuously increasing, painting a very bullish picture for the metal.


  12. The Invisible Experiment With Money And Gold

    The markets are completely bought and paid for, corrupt, and manipulated … “a farce”. We are in a corruption bubble, the largest corruption bubble the world has ever seen in modern history and perhaps in all history. This is the first time that the world has been united within instant communication, instant information, instant deposit or receipt of funds into any bank account or financial institution. Michael says: “I believe that we are already a one world order. I actually think we are already there, electronically certainly. I also think that a lot of the debates, wars and conflicts are manufactured, very similar to the presidential debates which are also manufactured. I believe we live in a one-world system, which financially is already completely manipulated.”

    We don’t live in a free market. We haven’t lived in a free market for decades, if not since 1913. We have the most powerful agency in the world, the Federal Reserve, setting the interest rates and the value of the world’s reserve currency. Everything that stems from that is built upon deceit and fraud. This doesn’t bode well for the entire financial system as a whole and right now, we are seeing the ramifications of that deceit.

    We are in the lengthening of this financial market topping. A lot of things are happening that point to any one of several large enough dominos falling over which is going to have a splash and pullover effect. Within three years we are going to see this farce imploding. Michael thinks that we will have something completely different and unrecognizable to what we currently have.

    Regarding money printing, those who claim that it’s going to generate activity in the economy and it will not be inflationary because it will somehow be magically absorbed by new products/ business / markets, are completely illogical. To suggest that the trillions of euros, dollars, and yens are not going to rob the basic value of each denominated piece of currency that is already out there, is like saying that lighting a match next to a pen of gas is not dangerous.

    This is the world which we find ourselves in, where the definitions of things are completely destroyed. We have now this debt-based system which is already a perversion of the concept of money: money is created when debt has incurred and not the other way around. Today we have a negative currency, a debt-based currency. That’s the opposite of a positive currency which we once had. Money in existence was obtained through trade with equivalent goods or services and could also be advanced in the form of a loan. Now, debt is created when a loan is made, and that’s how money comes into being.


  13. Dear President Obama,

    I am so pleased that you defeated George W. Bush's party. Do you remember what it was like from 2000 to 2008? What a nightmare for this country. It set us back in so many ways.

    Now that you are a 2nd-term president, I am hoping that you will consider cleaning up the financial sector. I understand that a 1st-term president has to be cognizant of the realities of re-election; You need money. And a lot of money comes from Wall Street. So, as frustrating as it has been for Americans, I understand that you had to temper your displeasure with the financial sector. You felt like you had to coddle them so that they would not throw you under the bus.

    Some would argue that they did throw you under the bus. They certainly favored Mitt Romney when it came to campaign contributions. On the other hand, you were not totally abandoned. They were hedging their bets, so to speak. And we all know that risk analysis is not their forte.

    I am not suggesting that you should go after Wall Street because they abandoned you. In fact, I am not suggesting that you "go after" anyone. What I am suggesting is that you pursue a few things that are central to America: 1. Rule-of-law, 2. A healthy democracy, and 3. A sound financial system.


  14. Hey Dave, Mormon is NOT a SECT of Christianity. No way no how. I believe from reading you over at LeMetropole Cafe' for years you're our Jewish descent if I remember correctly. Judaism and Mormon have about the same respect and understanding of The Lord Jesus Christ from what I gather.

    Joesph Smith isn't sitting with God and Jesus judging anyone. I absolutely 100% know that to be true.

    Lastly, I also supported and voted for Ron Paul in both 2008 and 2012 like you did. Romney and HIS temple rituals and secret passwords and handshakes is more similar to the Masons than Christianity.



    1. ROFLMAO. I hope you're kidding. You better reread about each religion before you try to draw any comparison whatsoever between Mormonism and Judaism. For the record, I'm an atheist.