20,000 lb Gorilla is really 34,000 lb Monster GOrilla

Well Folks, I suggested on the 4^th of this very month that everyone should be reading www.washingtonsblog.com to stay abreast of what the MSM is hiding from us all.  And, Boy Oh Boy, was I ever right, because. . .

I just learned from reading www.washingtonsblog.com THAT the 20,000 lb Gorilla in the Bad Banker's Closet that I wrote about last fall and on the 2nd of this month is really a 34,000 lb Mega-Monster GORILLA since the total derivatives (phony UNFUNDED FUNNY MONEY insurance) market is really closer to $1,200,000,000,000,000 if NOT more.  In fact, if Mr. Wilmott, quoted below, is right the real number is over $1,200,000,000,000,000!

Now remember folks, that $1,200,000,000,000,000 is the amount that is being INSURED by the aggregate community of  financial institutions that have taken in premiums on the repayment of $1,200,000,000,000,000, IF any losses do occur to the buyers of these insanely written 'Financial Weapons of Mass Destruction' as Warren Buffet called them.  

And, George Soros famously said back in 2003:
  
“The more I’ve heard about them, the more I’ve realized they’re truly toxic,” Mr. Soros said Friday, according to Reuters. Later, he added: “It’s like buying life insurance on someone else’s life, and owning a license to kill.”

And, the net affect - of the shockingly destructive systemic implosion of this pile of badly written and totally UNFUNDED insurance – on the world’s economies is quite simply incalculable!  

Does anyone out there vaguely comprehend why AIG Insurance went under and what it cost this country and the world?  We do FULLY comprehend the AIG disaster, and that is precisely why we are trying to warn as many as will listen or will read!

For, when this monster breaks out of his all too small cage it will prove to be just one of the contributing factors to the SECOND wave of the Super Tsunami “Kondratieff” Long-Wave breaking over all the financial markets of the earth in the Winter of 2014!

Are you and your company ready for the next economic “Black Swan” event that will be THREE times as severe as the Credit Crisis of 2007/08?

If not read our website and subscribe to our Market Reviews and Quarterly Updates, or your company will very likely be joining the list of companies that were swamped in 07/08 that we list on the bottom of our ‘Home’ page.

Top Derivatives Expert Estimates Size of the Global Derivatives Market at $1,200 Trillion Dollars … 20 Times Larger than the Global Economy

Posted on May 18, 2012 by WashingtonsBlog

How Large Is the Derivatives Market?

Everyone paying attention knows that the size of the derivatives market dwarfs the global economy.  But how big is it really?

For years, there have been rumors that there is over a quadrillion – one thousand trillion – dollars in notional value of outstanding derivatives.  But no one really knew.

Even though the Bank of International Settlements regularly publishes tables showing the amounts of different types of derivatives, some of the categories are ambiguous, and so it has been hard to get a good handle on what’s really out there.

For example, one blogger wrote last year:

Estimates of the notional value of the worldwide derivatives market go from $600 trillion all the way up to $1.5 quadrillion.

Smart guys like bond trader Jeffrey Gundlach said last year that we’ve got a quadrillion dollar derivative overhang, the government hasn’t done anything to fix the basic problems in our economy, and so we’ll have another crash.

But I’ve now found an estimate from a top derivatives expert who  confirms the claim.

Specifically, Paul Wilmott – who has written numerous books on the subject – estimated the number last year at $1.2 quadrillion:

The… derivatives market … is 20 times the size of the world economy.

***

According to one of the world’s leading derivatives experts, Paul Wilmott, who holds a doctorate in applied mathematics from Oxford University (and whose speaking voice sounds eerily like John Lennon’s), $1.2 quadrillion is the so-called notional value of the worldwide derivatives market. To put that in perspective, the world’s annual gross domestic product is between $50 trillion and $60 trillion.

A Clear and Present Danger to the World Economy

The size of the derivatives market is a huge threat to the world economy:

One of the biggest risks to the world’s financial health is the $1.2 quadrillion derivatives market. It’s complex, it’s unregulated, and it ought to be of concern to world leaders ….

***

How big is the risk to the world economy from these derivatives? According to Wilmott, it’s impossible to know unless you understand the details of the derivatives contracts. But since they’re unregulated and likely to remain so, it is hard to gauge the risk.

But Wilmott gives an example of an over-the-counter “customized” derivative that could be very risky indeed, and could also put its practitioners in a position of what he called “moral hazard.”

***

Another kind of market conduct that makes markets volatile is what Wilmott calls positive and negative feedback loops. These relatively bland-sounding terms mask some really scary behavior for investors who are not clued into it. Wilmott argues that a positive feedback loop contributed to the 22.6% crash in the Dow back in October 1987.

As we noted last year:

Bloomberg reported in May:

Mark Mobius, executive chairman of Templeton Asset Management’s emerging markets group, said another financial crisis is inevitable because the causes of the previous one haven’t been resolved.

“There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said …“Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes.”

***

The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008.

Credit default swaps were largely responsible for bringing down Bear Stearns, AIG (and see this), WaMu and other mammoth corporations.

And unexpected changes in interest rates could cause a major bloodbath in interest rate derivatives.

And, no, there have not been any reforms or attempts to rein in derivatives, and the Dodd-Frank financial legislation was really just a p.r. stunt which didn’t really change anything.

But the big banks and their minions claim that the huge amounts of derivatives themselves is unimportant because these are only “notional” values, and – after netting – the notional values are deflated to much more modest numbers.

But as [Tyler] Durden – who has a solid background in derivatives – notes:

At this point the economist PhD readers will scream: “this is total BS – after all you have bilateral netting which eliminates net bank exposure almost entirely.” True: that is precisely what the OCC will say too. As the chart below shows, according to the chief regulator of the derivative space in Q2 netting benefits amounted to an almost record 90.8% of gross exposure, so while seemingly massive, those XXX trillion numbers are really quite, quite small… Right?

…Wrong. The problem with bilateral netting is that it is based on one massively flawed assumption, namely that in an orderly collapse all derivative contracts will be honored by the issuing bank (in this case the company that has sold the protection, and which the buyer of protection hopes will offset the protection it in turn has sold). The best example of how the flaw behind bilateral netting almost destroyed the system is AIG: the insurance company was hours away from making trillions of derivative contracts worthless if it were to implode, leaving all those who had bought protection from the firm worthless, a contingency only Goldman hedged by buying protection on AIG. And while the argument can further be extended that in bankruptcy a perfectly netted bankrupt entity would make someone else whole on claims they have written, this is not true, as the bankrupt estate will pursue 100 cent recovery on its claims even under Chapter 11, while claims the estate had written end up as General Unsecured Claims which as Lehman has demonstrated will collect 20 cents on the dollar if they are lucky.

The point of this detour being that if any of these four banks fails, the repercussions would be disastrous. And no, Frank Dodd’s bank “resolution” provision would do absolutely nothing to prevent an epic systemic collapse.

Some Do See the Truth about Gold

Every once in a while we see something that we wish we had written, and the following is one of those. 

We were not aware of Bill Fleckenstein until a friend sent this article to us over the weekend.  But I can say that I am rather sure Fleckenstein is one of those rare people who do overlook the ‘Trees’ and who do see the ‘Forest’ AND the ‘Landscape’ and is NOT blinded by the blowing winds and hot air of the Pundits and the ‘Talking Heads’ and the Government sponsored apologists. 

My conclusion on his economic perspicacity is caused by his following comment on all those who are seeing a rebound in this economic nightmare:

“…In addition -- I don't know this to be a fact -- but it does appear that there are a lot of people who are short metals because they think the U.S. economy is doing well. (It wouldn't surprise me if these are the same folks who didn't see the housing bubble.)…”

And, the FED's only response has been the spending of Trillions of OUR Dollars to buy the BbBDBB (Bad bets of the Bad Debts of the Bad Bankers) and take them onto their Balance Sheet, where they will fester and cause the explosion of inflation (via the electronic Funny Money given the banks for this junk) that is right now eating everyone alive, because 'sterilization' of the FED's purchased junk/toxic debt from the stupid bankers is a completely fabricated concept and bears no resemblance to the reality of what QE1 and QE2 and Operation Twist's real and immediate impact has been on the real Money Supply.


The FED's unrestrained madness with their QE1 and QE2 and 'Operation Twisted Sister' will only end in one fashion, which we do cover in depth in our Market Review and Quarterly Updates.


Does anybody out there believe that the true inflation rate is ONLY 1 1/2 to 2 2/5's % per year? 

The truly sad thing is that all this confusion is caused by the PEC’s (Professional Economic Class) complete blindness to the secular waves first identified by Nicolas Kondratieff.  The "Kondratieff" does cause the type of 'Generational Depressions' now raging over ALL this earth as a result of ONLY the First Wave of the Super Tsunami “Kondratieff” Long-Wave!  

The fact that there are THREE waves of the "Kondratieff' - which we discovered over twenty years ago - was one of the elements that Kondratieff did not reveal before Stalin had him eliminated with a bullet to the back of the head.

So Folks, there are two more waves of the “Kondratieff” A’Comin, and each will be arithmetically greater than the first by a factor of three!

Are you and your company ready?

If not start reading all the pages of our dire warnings at www.polestarcomm@verizon.net.

And if you would like to know when waves TWO and THREE are most likely to swamp all the world's economies, then you had better subscribe to our Market Reviews and Quarterly Updates! 

Bill Fleckenstein

Gold's fortunes will soon reverse

As the gold sector nears record levels of negative sentiment, it presents renewed opportunity even as it plays on old fears. We can't know exactly when things will turn around, but we can get ready.

By Bill_Fleckenstein 21 hours ago

I would like to devote this week's column to the metals and miners in an attempt to put the recent nasty correction in perspective, as best as I am able.

First of all, I don't really think that the decline in gold prices or the miners' stocks reflects those markets "discounting" any particular event or outcome. That is, I don't think the decline is telling us that those markets are expecting some negative development in the future. Rather, there has been an overall lack of interest (demand), and the decline has fed on itself.

In addition -- I don't know this to be a fact -- but it does appear that there are a lot of people who are short metals because they think the U.S. economy is doing well. (It wouldn't surprise me if these are the same folks who didn't see the housing bubble.)

Meanwhile, sentiment has now become extremely lopsided: the Daily Sentiment Index has reached a record low. The Market Vane gold sentiment survey, at 51%, is back near the lows of 2008. The Hulbert Gold Newsletter Sentiment Index has been negative longer than just about any other stretch over the last decade.

According to the most recent data, the short interest in the gold ETF SPDR Gold Shares (GLD) has almost doubled (and it has likely increased since those data came out). Thus, we have now reached a point where psychology toward the gold complex is about as negative as it possibly can be.

Priced for defection

In addition, the open interest (i.e., the total number of contracts) in the gold futures market has declined drastically, although it has picked up in the last week as prices have plunged, indicating that there are new shorts (as well as new longs, since each short position must have a long counterparty).

Finally, the prices of gold mining stocks themselves have collapsed -- to absurd valuations, in some cases. Pan American Silver's (PAAS) market capitalization, for example, is so low you could buy the whole operation, sell off just the gold it recently acquired from its Minefinders acquisition and make a profit on your purchase, and you'd still own rest of the company (leveraged buyout artists, take note).

At the same time, weakening economic activity here and everywhere else, combined with European political and market instability, continue to increase the probability of more quantitative easing at the Federal Open Market Committee meeting in late June (with the European Central Bank not far behind).

What all of these extreme readings cannot do is stop stock prices from falling. In the present environment (on both the upside and the downside), when price momentum builds, it seems to feed on itself and gets carried to bizarre extremes. Once that process is under way, the only thing that can stop it is exhaustion. Only then can the asset in question turn around.

The big move coming

I don't know when this will happen for the metals and the miners. There have been a few times on the way down in the last couple of months when I thought that a reversal would lead to a move to the upside, but the action quickly indicated that this was not the case.

Nonetheless, at some point the stage will be set (if it isn't already) for an unbelievably explosive rally to the upside in metals. I think, given how stretched everything has become, that day is close, but that could mean a matter of weeks or it could be a few days. We can't know, nor do we need to. The point isn't to predict when, it is to recognize the moment when it occurs and have a plan about what to do.

Get ready to move

These violent moves don't just happen to gold and gold miners; they show up in other industries as well. But the metals complex may be more extreme because of the fact that gold isn't really analyzable and, thus, there is more of an emotional component to its price action. Nonetheless, a tremendous opportunity is setting up for those who can take advantage of it.

Prospectively, it's important to remember, because of the huge psychological component and price swings, that it is a good idea to have something you can trade so you have the flexibility to take advantage of moments in time such as these. That means at some point you have to sell something, either as they're going up or when they roll over and head back down.

In any case, I hope this discussion will help folks construct a game plan.

At the time of publication Bill Fleckenstein owned gold and precious-metals mining stocks, including Pan American Silver.

< Back to Bill Fleckenstein

Why Gold Is Going Higher Over Time

We first predicted last Fall in our Blogs - in the heat of Gold's run to $1,923 an oz - that Gold would NEVER reach $2,000 in late 2011 as predicted by the experts and that 2012 would be a BIG DOWN year for gold, and it certainly has so far - with another six to nine months to go in our opinion!

However, in the midst of this contrived and manipulated correction exists a HUGE opportunity for all investors to save themselves from the incipient SUPER-INFLATIONARY wave that will precede the SECOND wave of the Super-Tsunami "Kondratieff" Long-Wave that will utterly destroy the US economy in 18 to 36 months (Most likely October 2014 to March 2015) and is now absolutely ordained - courtesy of the FED's TOTALLY INSANE ZIRP!

Everyone can witness this SUPER-INFLATIONARY wave gather steam in the coming months as they see the price of ALL foodstuffs, hardware items, garden items (especially fertilizer), ALL insurance, ALL transportation prices and costs of ALL entertainment quite literally EXPLODE; all the while masked by a US CD monthly inflation report of 1 1/2 to 2/ 1/2%, because the government BureaurcRATS do KNOW that the American 'Sheeple' have finally been dumbed down to a new level of total and complete psychologically sublimated submission to ALL the LIES fed to them daily on their FV's (Funny Visions)!!

In our opinion, all investors can only save themselves from this NOW quite certain economic DEBACLE by implementing one strategy RIGHT NOW, i.e. buying a great portfolio of Gold stocks that includes Producers (recently hammered) and great little Explorers.

Here is a very brief glimpse of the means and the methods by which Polestar Communications’ Econometric Models do discover and confirm the real 'Pulse of the Markets' and an example of how we construct our Econometric Models and why we believe them to be more accurately predictive than those constructed by the economic professionals. 

Namely, we look for nexus and inflection points that others have missed.

Read on:

We have determined over many years study that the FLEGS (Fear, Lust, Envy, Greed and Stupidity) factors are as much – if not more - a determining influence on price trends as the academically accepted elements of perceived utility, relative pricing, delivery or production constraints and availability of inputs and replacements or cost of inventory or competitive forces.  Therefore, we first look for the FLEGS in every analysis to discover the driving forces of any market.

The following article from the Gallup organization attempts to examine and explain the relationship between the public’s heightened interest in gold and their recently expressed preference for gold over other investments, which is proving very troublesome for the “Puppet Masters.”

However, the PEC’s (Professional Economist Class) have failed to realize that the continued rise in Gold and the public’s preference for gold may have nothing to do with the public’s perception of Gold's value versus other investments.

In fact, in our opinion the public’s new preference for gold is a DIRECT inverse reaction to something exposed in the two following articles from a NON– MSM source.

Namely, the American public is losing confidence in all institutions as the lies from all sides are becoming obvious to all, e.g. the US CD’s hilarious decades-long inflation numbers of 1 ½ to 2 ¼%!  As a result the public is motivated more and more by FEAR of the unknown, exacerbated by their growing awareness that the US Government agencies are telling outright lies.

In fact, let me put in a plug – right here – for www.WashingtonsBlog.com Website.  IMO – everybody should read it at least once a week to understand the truth behind the news reported by the MSM.

Remember - We predicted in November of last year that Gold would be flat to down in 2012, before exploding in 2013 and beyond as the FED'S ZIRP force-feeds inflation to break the Deflationary grip of the "Kondratieff," which   tactic is doomed to failure.  Therefore, this discussion is not about the next several months but is relevant to the next few years when gold will ultimately reach into the $5,000 to $7,000 per ounce range in 2015 to 2017 time-frame.  

Gold Still Americans' Top Pick Among Long-Term Investments

Percentage saying gold is best long-term investment down slightly since last summer

Gallup; by Lydia Saad; April 27, 2012

PRINCETON, NJ -- Gold leads four other types of investments in Americans' perceptions of which is "the best long-term investment," although the 28% choosing it today is down slightly from 34% in August. Traditional savings accounts or CDs have gained in support over this time, rising to tie stocks/mutual funds and real estate as the next-most-valued investments. Bonds rank a distant fifth.

…These results are similar to those found a year ago, but reflect a decline in support for savings accounts/CDs since 2009, when these peaked at 34%. Longer term, the perceived value of real estate fell sharply between 2002 and 2007, and subsequently dipped slightly further.

Confidence in stocks/mutual funds increased between 2002 and 2007, but then plummeted in 2008 and 2009 before partly recovering since then.

Bottom Line

Investing in gold has gained in popularity in recent years as low interest rates have made traditional savings instruments less attractive, and instability in the stock and real estate markets has undermined the mass appeal of those options. Meanwhile, the rising trajectory of the price of gold over the past several years apparently offers more of the returns and stability investors seek. Although gold prices dipped in the last quarter of 2011 after hitting an all-time high of $1,924 per ounce in September, and have yet to fully recover, more Americans continue to consider gold the best long-term investment among the major options available to consumers.

Now what follows from www.washingtonsblog.com is the real reason that we believe the "Sheeple" are turning to Gold, i.e. they mistrust the US Government.  And check out the second article, which reveals that the level of mistrust amongst Americans today of our own Government is greater than was expressed by our forbears of King George at the time of The American Revolution! 

 

Americans Don’t Believe Government Lies: “Forty-Eight Percent Say That Another Great Depression Is Likely To Occur In The Next Year … More Than Eight In Ten Americans Say That The Economy Is In Poor Shape”

Posted on June 8, 2011 by WashingtonsBlog

Federal Reserve chairman Ben Bernanke says that jobs and growth will pick up in the second half of the year.

But – according to over 5 million Google hits – Mr. Bernanke is not telling the truth.

President Obama says we’re not headed for a double-dip recession.

But CNN notes:

Forty-eight percent say that another Great Depression is likely to occur in the next year – the highest that figure has ever reached. The survey also indicates that just under half live in a household where someone has lost a job or are worried that unemployment may hit them in the near future.

***

According to the survey, more than eight in ten Americans say that the economy is in poor shape, a number that has stubbornly remained at that level since March.

(Before you take any solace in the fact that less than 50% believe we’ll have another depression, Gallup noted in April that more Americans think the country is in a Depression than think the economy is growing.)

How bad are things? And why aren’t they improving?

One more time … from the top.

Billion dollar fund managers agree: the government never fixed the underlying economic problems, so we’ll have another crash.

The housing slump is now officially worse than during the Great Depression, and still may get much worse.

Chronic unemployment is worse than during the Great Depression. And more people will be unemployed during this downturn than during the Great Depression. In addition – in contrast with the Great Depression – the loss of jobs now appears to be permanent.

For those lucky enough to have jobs, wages appear to have increased less over the past 10 years (when adjusted for inflation) than they did during a comparable 10-year period during the Great Depression.

As CNN Money points out, things are so bad that Wal-Mart’s CEO is worried that people won’t be able to afford their goods.

I wrote last December:

The following experts have – at some point during the last 2 years – said that the economic crisis could be worse than the Great Depression:

·         Fed Chairman Ben Bernanke

·         Former Fed Chairman Alan Greenspan (and see this and this)

·         Former Fed Chairman Paul Volcker

·         Economics scholar and former Federal Reserve Governor Frederic Mishkin

·         The head of the Bank of England Mervyn King

·         Nobel prize winning economist Joseph Stiglitz

·         Nobel prize winning economist Paul Krugman

·         Former Goldman Sachs chairman John Whitehead

·         Economics professors Barry Eichengreen and and Kevin H. O’Rourke (updated here)

·         Investment advisor, risk expert and “Black Swan” author Nassim Nicholas Taleb

·         Well-known PhD economist Marc Faber

·         Morgan Stanley’s UK equity strategist Graham Secker

·         Former chief credit officer at Fannie Mae Edward J. Pinto

·         Billionaire investor George Soros

·         Senior British minister Ed Balls

 

 

 

A Higher Percentage of Americans Believed in King George During the Revolutionary War than Believe in Congress Today

Posted on February 27, 2011 by WashingtonsBlog

Influential Harvard and Stanford law professor Lawrence Lessig noted in a must-watch speech last week that polls show that only 11% of the American people have confidence in Congress.

He notes that more people believed in King George at the time of the Revolutionary War than believe in congress today.

He’s right.

Historians have estimated that between 15 and 20% of the white population of the colonies were Loyalists

 

FED's ZIRP is the 20,000 lb Gorilla in the closet

I almost forgot to include this article from yesterday that is yet another example of the MSM reporting truth but in an extremely UNDERSTATED fashion.  They don’t want to scare the ‘Sheeple’ on the testy and risky subject of the REAL inflation rate - just yet.

The MSM will have plenty of time for that in late 2014 and early 2015, with the DOW at 16,500 to 18,000 and Caterpillar moving its plants to China and ALL cars leased because NOBODY can afford to buy them (we are almost there now) and your local newspaper at $2.50 for the weekly and $5.00 for the Sunday edition and gasoline at $12 a gallon and bacon at $16 a lb and bread at $8 a loaf and a nickel pack of gum at $2.50!

That’s when the truth will be so very, very obvious to even the Deaf, Dumb and Blind ‘Sheeple’ that it will then be the time to “Pull The Curtain“ on this ‘Monkey Show‘ of pure fantasy of a slow economic recovery (NOT!) and very little inflation ( A PURE LIE)!

Einhorn Says Fed Rate Stance ‘No Longer Useful,’ Risks Inflation

Bloomberg;  By Noah Buhayar - May 1, 2012 11:56 AM ET

“Hedge-fund manager David Einhorn said Federal Reserve policy intended to stimulate the economy and create jobs is “no longer useful” because it risks inflation.

Investors including Pacific Investment Management Co.’s Bill Gross have said Fed policy makers may be adding the risk of future economic disruption. The central bank has kept interest rates near zero since late 2008.

… “This enthusiasm is tempered by our continued concern about the structural sovereign-debt problems in Europe and Japan, a slowing Chinese economy, and high oil prices and general inflation connected to the Fed’s continued insistence on maintaining an emergency zero percent interest-rate policy  (This is the FED’s ZIRP), which we believe is no longer useful or effective,” Einhorn said on the call.

Fed policymakers, led by Chairman Ben S. Bernanke, reiterated their view April 25 that conditions may warrant “exceptionally low levels” for rates through at least late 2014. The central bank has kept its target federal funds rate between zero and 0.25 percent since December 2008.

… California-based Pimco’s website today that Fed policies including debt purchases will cause “gradually higher rates of inflation.”

The “acceleration of credit via central bank policies will likely produce a positive rate of real economic growth this year for most developed countries, but the structural distortions brought about by zero-bound interest rates will limit the growth,” Gross wrote.

Knowing The Truth Will Save Your A__!

As I have noted before:

Every once in a great while the MSM gets it right and reports the truth.  The following is a prime example.  I need add NOTHING to this very fine and accurate piece of journalism.

Are you and your company ready for the Financial Debacle of the century that will follow the “Great Deception of 2012” when all the ‘Sheeple’ will have finally been persuaded to put their last bits of money into the world’s stock markets and then be entirely fleeced - once again - with the Greatest Stock Market Crash ever in the Winter of 2014 from the roughly 16,500 level on the DOW?

Incidentally, I am just about to reset our projected insane target level on the DOW to 18,000.  I think that will be MADE necessary by the fact that the "Powers That BE" (PTB) are having a VERY difficult time moving the 'Sheeple' back into Stocks.  And the 'Sheeple' must be 'All In' (just like Real Estate in 2006) the insanely overpriced PAPER of the stock markets before the PTB can 'PULL the Curtain" on this 'Monkey Show,' just as they did three times in the late 60's and 72 and 1987 and 2001!

Doubt us?  

Well, just watch the rhetoric rise to fever pitch by the 'talking heads' and 'professional pitchmen' of the Devil on the country's FV's (Funny Visions) over this coming year and you WILL see our prediction come entirely true! 

ON that I will take bets from anybody at very nearly any odds!

Finally, the "Age of Austerity" just briefly mentioned in this article is upon our doorstep, as I did cover in  some detail on our website Home pages and New Normal pages and Econometrics pages at www.polestarcomm.com and in MUCH greater details in our Market Review of 2011 and our Quarterly Reviews since then and in a cursory fashion in these Blogs.

IMO - you and your company should be preparing NOW for these things, otherwise, your company is sure to join the long list of those companies (some are listed at the bottom of our home page) that were destroyed in the FIRST wave of the Super-Tsunami "Kondratieff" Long-Wave that did strike this country and the entire world in 2007 and 2008.

And remember, the SECOND wave of the Super-Tsunami "Kondratieff" Long-Wave will be three times as horrific and financially catastrophic as the first wave, which increased intensity is merely a factor of wave harmonics, but will be credited to the $700,000,000,000,000 Derivatives Issue by the 'talking heads'  and 'professional pundits' of the Devil in late 2014 and 2015.

Yale’s Shiller: World in a 'Late Great Depression'

www.moneynews.com; Monday, 30 Apr 2012 07:50 AM; By Forrest Jones

“ The global economy is mired in a "late Great Depression" despite central bank stimulus policies, says Yale economist and author Robert Shiller.

"Our whole economy has been affected by variations in confidence. Central banks are sort of trusted, but the actions they have often affect people’s confidence by appearance rather than substance. We’re not in the most trusting mood now,” Shiller tells CNBC.

The Federal Reserve, the European Central Bank, the Bank of Japan and the Bank of England have propped up their respective economies via liquidity injections known as quantitative easing, tools designed to spur recovery but dubbed by critics as printing money out of thin air.

He says the world is in a “new age of austerity.”

Critics say such monetary tools don't improve fundamental economic problems of too much debt and too little growth, although Shiller points out that the jury is still out whether fiscal measures taken to tackle those problems such as budget cuts and tax hikes in Europe especially are having a desired effect.

"Quantitative easing is not as prominent a policy as austerity ... the effect of austerity is not crystal clear because it depends how people react to it," says Shiller, who accurately called the tech bust of the early 2000s and the housing bust later that decade.

"It might help, but I don’t know if it's going to overwhelm the general mood of austerity, which is affecting the housing market."

….  "Fifty years ago, there wasn’t this talk of housing as an investment. It was a zeitgeist of the early 2000s, and it has gradually gone."

The housing sector appears to be bouncing along a bottom….

… Housing prices will drop by a further 20 percent as the downturn gripping the United States deepens, leading economist Gary Shilling says.

Writing in the Christian Science Monitor, Shilling said more and more people are looking to rent as homeownership becomes increasingly rare.

“Housing activity remains depressed, with the only life coming from the multifamily component, which is being driven by the zeal for rental apartments as homeownership falls,” he wrote.

“Homeowners are losing their abodes to foreclosures; many can’t meet stringent mortgage lending standards; some worry about homeownership responsibilities in the face of job uncertainty; and many people have no desire to buy an asset that continues to fall in price.

“I am looking for a further 20 percent slide in housing prices.”

Read more: Yale’s Shiller: World in a 'Late Great Depression'

FED force feeds Market Mania with ZIRP

While the stock market is manipulated ever higher and higher, the US economy is growing ever sicker and sicker.  ALL these things we predicted back in our inaugural issue of our Market Review and in our very first Blogs when we decided to go VERY public with our forecasts.

The following news story does reveal the truth of all the economic horrors that we are right now living through and the ordained fact that even MUCH greater horrors are in store for all of us when the “Great Deception of 2012” is finally completed in mid 2014 to late 2014 with the Dow Jones above 16,500! 

For, the FED is now revealing, in the following article, that they do intend to leave the insane ZIRP in place until THE WINTER of 2014, which does clearly reveal that they are forcing the American 'Sheeple' to buy stocks and that they DO UNEQUIVOCALLY KNOW that this economy is deathly ILL!
Well, these things should be very, very clear, if you know how to read the tealeaves.  We will give a very short lesson here.  The Sheeple are being told (30 to 50 times a day) that the stock market is going up because the economy is getting better.  This is an outright lie, as the following ‘Micro–Mini- Analysis’ (MMA) will clearly reveal:

#1 The Sheeple are told every day that Caterpillar is experiencing greater sales because the economy is improving. 

This is an outright lie!

Caterpillar is showing ever increasing sales because, because there is now a worldwide explosion in the mining of GOLD and SILVER and other precious metals.  And this is so because the smart money ALL OVER THE WORLD KNOWS that the real inflation rate is MUCH higher than the 2.5% reported by the US CD to the compliant and ignorant American ‘Sheeple’ and that it is soon to be soaring!

The rest of the Dow and S&P components that are pushing ever higher are Internet stocks like Google and Apple that have NOTHING to do with an improving American economy.   Google and Apple are not adding workers from middle America.  In fact, they both import their High Tech wizards from India, while Apple exports all their manufacturing and assembly jobs to the Third World at very near slave-labor rates.

Neither of these two “Darlings of Wall Street” - nor the ridiculous Internet IPO’s that are now hitting the Street – contribute one iota to the real US economy, as far as substantial jobs or employment opportunities for middle class Americans.

And, MARK OUR WORDS, Caterpillar is VERY likely to begin exporting jobs real soon, just as has Boeing and many other formerly stalwart American companies!
So, are you and your company ready for a poorer American consumer?

You had better be, especially after Obama’s ‘Bait and Switch’ “Buffet Tax Bill” passes and really begins to pauperize the middle class!
U.S. Stocks Advance as Federal Reserve Signals Low Rates
Bloomberg; By Rita Nazareth - Apr 12, 2012 12:51 PM ET

April 12 (Bloomberg) -- Kate Moore, senior global equity strategist at Bank of America Merrill Lynch, discusses the outlook for U.S. markets and investment strategy…
The S&P 500 advanced 1.2 percent to 1,385.45 at 12:50 p.m. New York time. The benchmark gauge yesterday snapped the longest losing streak since November
“We’ll continue to see similar language: the Fed is ready to provide more accommodation if necessary,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc…
 
Equities rose after Federal Reserve Vice Chairman Janet Yellen and Fed Bank of New York President William C. Dudley endorsed the central bank’s view that borrowing costs are likely to stay low through 2014. U.S. central bankers next meet on April 24-25 to debate policy after a report last week showed job growth slowed to the weakest pace in five months.
Jobless Claims

The comments offset investors’ disappointment after a government report today showing that more Americans than forecast filed claims for jobless benefits last week, a sign the pace of improvement in the labor market is slowing.

….“It’s very difficult to kill a rally that we’ve seen over the last few months in one shot,” said Michael Shaoul, chairman of Marketfield Asset Management in New York, which oversees more than $1.6 billion. “Without new news it will be very difficult to send this market lower. Ultimately, earnings are going to be important. I would expect good domestic earnings.”

Caterpillar, Alcoa

The Morgan Stanley Cyclical Index of companies most-tied to economic growth added 2.5 percent. The Dow Jones Transportation Average, considered a proxy for the economy, gained 2.4 percent. Caterpillar Inc. (CAT) advanced 3.7 percent to $105.50. Alcoa rose 2.8 percent to $10.18.

…Google, which is scheduled to report first-quarter results after the market close, added 1.2 percent to $643.80. On average, the analysts surveyed by Bloomberg estimate earnings of $9.64, a 19 percent growth from the same period a year earlier.
Google’s Cash

…The retreat in the S&P 500 may not be over, as a gauge of bullishness reached levels that coincided with the market’s peak in 2007 and preceded the biggest pullback in both of the last two years.

The Consensus Bullish Sentiment index on stocks, based on a weekly survey of brokerage strategists and newsletter writers, exceeded 75 percent for seven weeks through April 3, the longest streak since Kansas City,
…
“We’re concerned at what we view as very complacent bullish sentiment, almost frothy, and it needs to be unwound,” John Kattar, chief investment officer at Eastern Investment Advisors in Boston, which manages $1.7 billion, said in a telephone interview. “We should see some fear creeping back into the market, but we’re a long way from that happening yet.”

Sheering the Sheeple of their Gold

Well Folks the following article proves that the Psy-Ops (Psychological Operations) of the MSM (MainStream Media) is now going into high gear, as they really begin to scare the Sheeple out of ALL things Gold and into common stocks.

We foresaw EXACTLY these things just over three years ago (March 2009) and wrote of them here - back in November 2011.  When other experts saw Gold going to $2,000 in December 2011, we predicted DOWN.  Our very clear predictions on the stock markets and inflation and Gold and interest rates all  are clearly in lock-step with what is now happening.  

Since then, we have covered these things ‘ad infinitum’ in all our Blogs.  

The MSM's Psy-Ops on gold is all part of a program of manipulation that is intended to persuade ALL Sheeple that they are experiencing inflation of only 1.5 to 2.5% per annum and not being MURDERED every day by raging inflation for ALL food and sundries and fuel and everything else they really do pay for (like insurance and ink cartridges and GIRL SCOUT COOKIES and INK PENS and CLOTHS PINS and NAILS and SCREWS and PAINT and POTTING SOIL and fertilizer and taxes and tolls for bridges and tollways and tires and ALL utilities and etc., etc.).

The goal of the "Puppet Masters" is to move all Sheeple out of Gold and interest bearing investments and into common stocks, where they will be finally WIPED OUT in the GREATEST stock market crash of the century - right after the “Great Deception of 2012” is completed and the aggregate market PE has been run to truly insane levels and some “Fruitcake” stocks actually go over a thousand dollars a share, i.e. you do know which stocks I refer to, I hope!

Are you and your company ready for the market dislocating horrors that are ordained to ensue after that?

If not – or if you don’t even have the slightest comprehension of what we are talking about – you had better read all our pages at www.polestarcomm.com and all of these Blogs starting from the beginning or subscribe to our Market Review and Quarterly Updates.

If you don’t see the need of any of these things and you do choose to follow the ‘economist class,’ some of whom are quoted in the following article, that DID NOT see the First wave of the Super Tsunami “Kondratieff” Long-Wave coming, then check out the list of those companies, THAT WENT BANKRUPT, on the bottom of our Home page that your company will most likely be joining in the 2014 time-frame.

Gold Traders Bearish for First Time in 2012: Commodities

Bloomberg; By Nicholas Larkin - Apr 5, 2012 11:09 AM ET

 

Gold Rush Tarnished by the Federal Reserve

Gold traders are bearish for the first time this year after the Federal Reserve signaled it may refrain from more monetary stimulus and jewelers in India, the world’s biggest bullion market, shut to protest a new tax.

Fifteen of 29 analysts surveyed by Bloomberg expect prices to decline next week and five were neutral, the highest proportion since Dec. 30. Imports by India may have plunged as much as 81 percent in March and could drop 40 percent in the second quarter…

Slumping Indian demand comes as prices already erased more than half of this year’s gains on mounting concern the Fed won’t buy more debt. …

“Reduced prospects for quantitative easing, if you read that as a strengthening U.S. economy, then it’s bad for gold,” said Carole Ferguson, an analyst at Fairfax IS in London. “Gold has lost some of its safe-haven shine this year. …

 Labor Department report tomorrow may show employment rose by more than 200,000 workers for a fourth consecutive month, according to a Bloomberg survey of economists. U.S. growth will accelerate to 2.2 percent this quarter and 2.5 percent in the following three months, compared with 2 percent in the first quarter, according to the median of 73 economist estimates compiled by Bloomberg.

(Now remember, THESE ECONOMISTS ARE THE VERY SAME CLASS OF PEOPLE THAT DID NOT SEE THE CREDIT-CRISIS OF 2007/08 COMING AND THEN DID CLAIM THAT NO ONE COULD HAVE FORESEEN SUCH THINGS, WHICH ONLY PROVES THAT BESIDES BEING IGNORANT - THEY DO LIE.  FOR JUST A PARTIAL LIST OF those (including us) WHO DID SEE THAT DISASTER COMING, GO TO the the fourth paragraph of the section entitled "Epilogue...2006" on OUR HOME PAGE at www.polestarcomm.com.

And now the reporters for the MSM are asking these “Blind Shepherds”  what they think is going to happen.  And then the reporters do report the economist's gibberish and BALDERDASH as though it does have value, because people are repeatedly told (explicitly and implicitly) that economists ‘Have a Handle’ on what is coming, when it is quite clear (to all who really study their pontifications over time, going back at least to the '60s) that the ONLY thing economists "Have a Handle" on is something ('private') I can't mention in this Blog.

Now, please read our “Econometrics” page and our “New Normal” page and our “Home” page at www.polestarcomm.com, if you really would like to understand why this type of news story quoting the vacuously-founded meditations of economists is very dangerous for all people who do read it and do not understand the utter worthlessness of this 'pabulum' that is being passed off as 'news' and that they are being fed daily - NOW and into the "Great Deception of 2012!"

And, as you can see below the ‘real’ smart money continues to be long huge amounts of actual Gold, which accumulations we believe will increase dramatically over the next 36 months with the true horrors that will emerge with the onslaught of the Second wave (of three) of the Super Tsunami “Kondratieff” Long- Wave.

Investors in exchange-traded products backed by gold remain bullish, holding 2,398.2 tons valued at about $125.4 billion, data compiled by Bloomberg show. That’s about 0.5 percent below the record reached March 13. Hedge funds and other speculators increased bets on higher prices in the week ended March 27, raising their net-long position by 15 percent to 130,472 futures and options, Commodity Futures Trading Commission data show.

…“Markets seem to be assuming all is OK now, but any re- emergence of problems -- Iran, Europe, U.S. economic front -- would see gold higher again,” said Adrian Day, the president of Adrian Day Asset Management in Annapolis, Maryland.

Spot gold’s 100-day moving average dropped below the 200- day measure for the first time in three years last week, reinforcing a bearish trend, UBS said in a report yesterday. Its 14-day relative-strength index is at 39.3, with a level of 30 indicating to some analysts that a rebound may be due.

 Bayram Dincer, an analyst at LGT Capital Management in Pfaeffikon, Switzerland. “The market right now is more about confidence, but it’s too early to say there’s a recovery for sure.”

But Bayram Dincer is – in point of fact - very strongly implying that,  “there’s a recovery for sure” by the insidiously disingenuous wording of his comments.  

I do ask all of you to remember this prediction of Mr. Dincer’s and look back after the Sheeple have been COMPLETELY Sheered in the Greatest Crash since ’74 that is now ordained, by ALL things ‘Bernanked,’ right after the DOW climax is seen around 16,500 in very late 2013 to mid 2014.

The extension of our predictive time frames (out to very late 2013 to mid 2014 from our original prediction of early 2013 to late 2013) was made necessary by the TOTAL insanity of Bernanke’s promise to extend the ridiculously economy-wrecking, investment-skewing madness of the ZIRP (Zero Interest Rate Policy) until 2014!