Sunday, May 16, 2010

"Meltup" Video Warns of Hyperinflation and Massive Devaluation of the Dollar

This 54 minute video was posted May 13 and by early May 18, it had 265,973 hits on YouTube at this link:

The video, which features the views of Gerald Celente of Trends Research Institute, warns of a coming era of hyperinflation and the collapse of the dollar if nothing is done to turn around America and return the economy to free market principles and the government to Constitutional principles. Celente predicted the market crash of 2008.

Among other things, the video warns about the likelihood of a Comex default on silver based on the possibility that many commodity traders, like J.P. Morgan Chase, are manipulating silver and selling more silver than actually exists presumably in an effort to drive down the price. A Comex default would drive up precious metals prices dramatically.

The video also catalogues dramatic increases in food prices already under way. Gerald Celente warns of food riots and tax riots as prices rise so high many cannot afford food and energy.

The video also raises questions about whether or not the full amount of the gold reserve still exists in Ft. Knox and calls for an annual audit, noting further that even if the full amount of the gold reserve remains in Ft. Knox, it would only be about worth about $300 billion or so.

The video argues that the Fed engages in price-fixing by setting interest rates and has prevented the functioning of the free market. By competing inflation artificially low, the Fed distorts economic forces. Interest rates are likely to soon rise to 5 percent to control inflation and, as a result, interest payments on U.S. debt will rise to $500 billion a year, the video forecasts.

The dire picture the video paints of the future need not come true. Gerald Celente argues that if 20 percent of Americans buy better quality goods made in America and not cheap goods made overseas and if America becomes better educated on the economy, Americas can begin the second American revolution and restore the Amercian economy to a better balance.

Viewers are invited to sign up for a newsletter from the National Inflation Association and are called on to know and support the U.S. constitution as the "last line of defense."

Tuesday, May 11, 2010

Jim Rickards on CNBC: "Goldman Can Create Shorts Faster Than Europe Can Print Money"

Market observers have been quick to agree that Europe can not print its way out of its crisis, in spite of the $1 trillion emergency rescue package announced Monday. The best quote expressing this view comes Jim Rickards, senior managing director for market intelligence at Omnis, Inc., a scientific consulting firm in McLean, Virginia, from his appearance on CNBC.

Rickards quote, from the CNBC video above from Monday, May 10 during early morning show Squawk on the Street at 7:23 AM, is as follows:

"Look at what Soros did to the Bank of England in 1992. He went after them, they had a finite amount of dollars. He was selling sterling and taking the dollars, and they were buying the sterling and selling the dollars to defend the peg," Ricards said. "All he had to do was sell more than they had and he wins. But he needed real money to do that. You either had to have cash, which he did, or bank lines of credit."

"Today, you can break a country. You don't need money. You just need synthetic euroshorts and CDS. You have a trillion dollar bailout. Butm Goldman can create 10 trillion of euroshorts. So, it just dominates whatever governments can do. So, basically Goldman can create shorts faster than Europe can print money. You say the market wins, but it's not really a market, it's back to this casino thing, and that's the problm."

Sunday, May 2, 2010

The Long and Winding Road to GSE Reform

With the price of the bailout rising and momentum for reform in Washington slowing, Fannie Mae and Freddie Mac remain vital to the functioning of the mortgage and housing markets. A framework for a new system is beginning to take shape, at the same time that analysts are looking to fully and adequately address flaws in the current system.

Mortgage Banking

May 2010

By Robert Stowe England

A giant question mark hangs over the mortgage finance industry. What is the future of Fannie Mae and Freddie Mac? That is part of a larger question. What is the future of mortgage finance?

The two pillars of the mortgage industry that own or guarantee payment on $5 trillion in U.S. mortgages and/or mortgage-backed securities (MBS) failed dramatically at the height of the Panic of 2008 and were placed into conservatorship by the Federal Housing Finance Agency (FHFA).

The significance of the failure of the two government-sponsored enterprises (GSEs) has been difficult to fully capture; but however you describe it, it is epic in scope. The Congressional Budget Office (CBO) has projected that the bailout of Fannie and Freddie added $291 billion to federal outlays in fiscal year 2009 (October 2008-September 2009). CBO predicts another $99 billion in outlays from 2010 to 2019, for a total loss of $380 billion--by far the largest federal rescue ever.

It’s also one for the history books. “It was the biggest failure of housing policy on the planet and throughout all of history,” says Alex Pollock, resident fellow at the American Enterprise Institute (AEI), Washington, D.C. The GSE failures dwarf the next largest spectacular failure, the savings-and-loan (S&L) crisis of the early 1990s, where only $1 trillion in assets were on the line, he says.

To read more, click this link: