Meanwhile In Beijing: ‘For The Respect Of The Motherland, We Must Go To War With Japan’

Meanwhile In Beijing: “For The Respect Of The Motherland, We Must Go To War With Japan” (ZeroHedge, Sep 16, 2012):

Anti-US protests sweeping across the entire Muslim world (which are continuing today), besieging, attacking and burning down US embassies, are not the only thing that the central banker policy vehicle known as “the markets” have to ignore in the coming days and weeks. Cause here comes China: “Thousands besiege Japan’s embassy in Beijing over Tokyo’s assertion of control over disputed islands in East China Sea.” And China is not happy: “For The Respect Of The Motherland, We Must Go To War With Japan.” Sure enough, where would the US be if the focal point of this escalation in militant anger – the Senkaku Islands – was not merely the latest expression of Pax Americana, and America’s national interests abroad.

We already discussed the inevitable implications of the meaningless populist agitation over the contested Senkaku Islands. Here it is playing out in real time:

Protests in China are growing over Japan’s assertion of control of disputed islands.

Thousands of Chinese besieged the Japanese embassy in Beijing on Saturday, hurling rocks, eggs and bottles with protests reported in other major cities over the territorial dispute in the East China Sea.

Paramilitary police with shields and batons barricaded the embassy, holding back and occasionally fighting with slogan-chanting, flag-waving protesters who at times appeared to be trying to storm the building.

Return our islands! Japanese devils get out!” some shouted.

One of them held up a sign reading: “For the respect of the motherland, we must go to war with Japan.

The protests were not confined in Beijing. In Shanghai, streets around the Japanese consulate, in the were cordoned off on Saturday even as hundreds of police allowed a small groups of people in at a time to protest.

“The Chinese government has not done much to quell the inflamed passions of its citizens,” Al Jazeera’s Marga Ortigas reported from Hong Kong on Saturday.

Protesters are also calling for a widespread boycott against Japanese businesses and products.

Read moreMeanwhile In Beijing: ‘For The Respect Of The Motherland, We Must Go To War With Japan’

Marc Faber: Central Bankers Are ‘Counterfeit Money Printers’ – ‘If I Had Messed Up As Badly As Bernanke I Would For Sure Resign’ – ‘QE Helps Rich People’

From the article:

“If we have an economic crisis in the Western world it’s because the government makes up 50 percent or more of the economy. This is a cancer that is taking away people’s freedom,”

See also:

How QE3 Will Make The Wealthy Even Wealthier While Causing Living Standards To Fall For The Rest Of Us


Watch the interview HERE.

Marc Faber: If I Were Bernanke, I Would Resign (CNBC, Sep 14, 2012):

Central bankers are “counterfeit money printers” and Federal Reserve Chairman Ben Bernanke should resign for messing up the U.S. economy so badly, Marc Faber, author of the Gloom, Doom and Boom, told CNBC on Friday.

He said Bernanke was one of the main proponents of an ultra-expansionist economic monetary policy that was to blame for the latest financial crisis.

“If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous — it doesn’t work that way. It’s a temporary boost followed by a crash,” Faber said.

Faber, who rose to prominence after predicting the 1987 financial crash report and dubbed “Dr Doom” for his negative predictions, said: “This unlimited QE (quantitative easing) , buying mortgage-backed securities (MBS) and continuing operation twist  has the implication of simply having asset prices go up and the money flows down to the Mayfair economy,” Faber said.

A Mayfair economy is one which benefits the wealthier and better off in society. Faber said this latest round of QE would not help the “man on the street”.

“QE helps rich people whose asset prices go up and whose net worth then increases but it doesn’t flow to the man on the street who is faced with higher costs of living with price rises. You just have a small economy that is booming but the majority of the economy is damaged by QE,” he said.Bernanke announced on Thursday that the Fed would buy $40 billion a month in MBS, giving the impression that this time around there would be no time limit to the program, which would only stop once a sustained uptick in employment is visible.

“The money printers are responsible for this crisis. If we continue with this expansionist monetary policy we won’t be facing a fiscal cliff it will be a fiscal grand canyon,” he added.

Read moreMarc Faber: Central Bankers Are ‘Counterfeit Money Printers’ – ‘If I Had Messed Up As Badly As Bernanke I Would For Sure Resign’ – ‘QE Helps Rich People’

Japan’s Debt Crisis (Infographic)

Visualizing Japan’s Debt Crisis (ZeroHedge, Sep 15, 2012):

From the largest Japanese pension fund unwinding its JGB holdings to Kyle Bass’ infamous ‘debt-saturation Japan Trade’ and Dylan Grice’s original Japan funding crisis discussion, the nation – now facing Chinese dis-satisfaction over the recent island-purchase – continues to stagger with its Keynesian-endgame heading to a Koo-nesian disaster. The following info-graphic, via Informed Trades, provides everything the savvy investor needs to know about Debt/GDP, balance of payments, energy imports, demographics, and currency debasement.

New Bankster Bailout Disguised As QE3

Latest move represents huge transfer of wealth from the middle class to the elite

New Banker Bailout Disguised As QE3 (Infowars, Sep 14, 2012):

While Ben Bernanke’s announcement that the Federal Reserve will embark on an open ended scheme to purchase $40 billion in mortgage-backed securities each month has been touted by the establishment media as the beginning of “QE3? it is in fact nothing less than another banker bailout in disguise.

While many have rightly attacked the Fed’s policy of printing money as a band aid that does little to solve the economy in the long term, this new move isn’t even about that. The policy announced yesterday will merely see the Fed use taxpayer money to purchase more bad debt in the form of junk mortgage-backed derivative based securities that have been sold over and over again.

This has nothing to do with getting the economy going again and will only serve as yet another huge wealth transfer from the middle class to the elite.

Read moreNew Bankster Bailout Disguised As QE3

Webster Tarpley: US Infrastructure On Brink Of Thermodynamic Breakdown

US infrastructure on brink of thermodynamic breakdown (PressTV, Sep 14, 2012):

Federal Reserve Chairman Ben Bernanke has warned that the country’s unemployment situation “remains a grave concern” as the hiring process in the job market stays sluggish.

“Fewer than half of the eight million jobs lost in the recession have been restored and at 8.1 percent, the unemployment rate is nearly unchanged since the beginning of the year and is well above normal levels,” Bernanke told reporters on Thursday, AFP reported.

Bernanke also pointed out that the Federal Reserve does not have the means to offset the economic shock from the public spending cuts and tax hikes, scheduled for the end of 2012.

Press TV has conducted an interview with Webster Griffin Tarpley, author and historian from Washington, to further talk over the issue. the following is an approximate transcript of the interview.

Press TV: The Fed has announced that it will resume its policy of pumping more money into the economy. Will that be enough to stave off the unemployment?

Tarpley: No, it cannot. Right now we have an economic depression in the United States and around the world and the real unemployment in this country is much higher than the Federal Reserve seems to want to admit. It is about 30 million people minimum that are out of work which is significantly more than the government estimates.

The problem with the Federal Reserve is that they see their task as saving failed banks; we have to call them ‘zombie banks’ because they are bankrupt entities that sit there; they absorb government and Federal Reserve resources; they do not provide investment; they do not create jobs; there is no plan and equipment or capital goods investment going on.

Read moreWebster Tarpley: US Infrastructure On Brink Of Thermodynamic Breakdown

QE3: Helicopter Ben Bernanke Unleashes An All-Out Attack On The U.S. Dollar

See also:

Bank Of America Sees Fed Assets Surpassing $5 Trillion By End Of 2014 … Leading To $3350 Gold And $190 Crude

Marc Faber: ‘Fed Will Destroy The World’ (Video)

Ron Paul On QE3: ‘Country Should Panic Over Fed’s Decision’ – ‘We Are Creating Money Out Of Thin Air’ – ‘We’ve Lost Control!’ (Video)


QE3: Helicopter Ben Bernanke Unleashes An All-Out Attack On The U.S. Dollar (Economic Collapse, Sep 13, 2012):

You can’t accuse Federal Reserve Chairman Ben Bernanke of not living up to his nickname.  Back in 2002, Bernanke delivered a speech entitled “Deflation: Making Sure ‘It’ Doesn’t Happen Here” in which he referenced a statement by economist Milton Friedman about fighting deflation by dropping money from a helicopter.  Well, it might be time for a new nickname for Bernanke because what he did today was a lot more than drop money from a helicopter.  Today the Federal Reserve announced that QE3 will begin on Friday, but it is going to be much different from QE1 and QE2.  Both of those rounds of quantitative easing were of limited duration.  This time, the quantitative easing is going to be open-ended.  The Fed is going to buy 40 billion dollars worth of mortgage-backed securities per month until they have decided that the economy is in good enough shape to stop.  For those that get confused by terms like “quantitative easing” and “mortgage-backed securities”, what the Federal Reserve is essentially saying is this: “We’re going to print a bunch of money and buy stuff for as long as we feel it is necessary.”  In addition, the Federal Reserve has promised to keep interest rates at ultra-low levels all the way through mid-2015.  The course that the Federal Reserve has set us on is utter insanity.  Ben Bernanke can rain money down on us all he wants, but it is not going to do much at all to help the real economy.  However, it will definitely hasten the destruction of the U.S. dollar.

And the Federal Reserve is apparently very eager to get QE3 going.  Purchases of mortgage-backed securities are going to start on Friday.

In the coming months, hundreds of billions of dollars that the Federal Reserve has zapped into existence out of nothing will be injected into our financial system.

So what will happen to all of this new money?

Read moreQE3: Helicopter Ben Bernanke Unleashes An All-Out Attack On The U.S. Dollar

Bank Of America Sees Fed Assets Surpassing $5 Trillion By End Of 2014 … Leading To $3350 Gold And $190 Crude

And for some (idiots) this is not enough …

Paul Krugman: QE3 Should Have Been ‘More Stronger’ (Quote Of The Day)

… versus those who can clearly see what is coming:

Marc Faber: ‘Fed Will Destroy The World’ (Video)

Ron Paul On QE3: ‘Country Should Panic Over Fed’s Decision’ – ‘We Are Creating Money Out Of Thin Air’ – ‘We’ve Lost Control!’ (Video)

From the article:

“Even when unwinding its balance sheet would mean sacrificing 30% of US GDP and, let’s be honest about it, civil war.”


BofA Sees Fed Assets Surpassing $5 Trillion By End Of 2014… Leading To $3350 Gold And $190 Crude (ZeroHedge, Sep 14, 2012):

Yesterday, when we first presented our calculation of what the Fed’s balance sheet would look like through the end of 2013, some were confused why we assumed that the Fed would continue monetizing the long-end beyond the end of 2012. Simple: in its statement, the FOMC said that “If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.” Therefore, the only question is by what point the labor market would have improved sufficiently to satisfy the Fed with its “improvement” (all else equal, which however – and here’s looking at you inflation – will not be). Conservatively, we assumed that it would take at the lest until December 2014 for unemployment to cross the Fed’s “all clear threshold.” As it turns out we were optimistic. Bank of America’s Priya Misra has just released an analysis which is identical to ours in all other respects, except for when the latest QE version would end. BofA’s take: “We do not believe there will be “substantial” improvement in the labor market for the next 1.5-2 years and foresee the Fed buying Treasuries after the end of Operation Twist.” What does this mean for total Fed purchases? Again, simple. Add $1 trillion to the Zero Hedge total of $4TRN. In other words, Bank of America just predicted at least 2 years and change of constant monetization, which would send the Fed’s balance sheet to grand total of just over $5,000,000,000,000 as the Fed adds another $2.2 trillion MBS and Treasury notional to the current total of $2.8 trillion.

In other words, for once we actually were shockingly optimistic on the US economy. Assuming BofA is correct, and it probably is, this is how the Fed’s balance sheet will look like for the next 2 years:

Or, in terms of US GDP, the Fed’s balance sheet will have “LBOed” just shy of 30% of all US goods and services.

It gets worse:

Read moreBank Of America Sees Fed Assets Surpassing $5 Trillion By End Of 2014 … Leading To $3350 Gold And $190 Crude

Egan-Jones Downgrades US Credit Rating From AA To AA-

Egan Jones Downgrades US From AA To AA- (ZeroHedge, Sep 14, 2012):

From Egan Jones, who downgraded the US for the first time ever last July, two weeks ahead of S&P:

Synopsis: UNITED STATES (GOVT OF) EJR Sen Rating(Curr/Prj) AA-/ N/A Rating Analysis – 9/14/12 EJR CP Rating: A1+ Debt: $15.2B EJR’s 1 yr. Default Probability: 1.2%

Up, up, and away – the FED’s QE3 will stoke the stock market and commodity prices, but in our opinion will hurt the US economy and, by extension, credit quality. Issuing additional currency and depressing interest rates via the purchasing of MBS does little to raise the real GDP of the US, but does reduce the value of the dollar (because of the increase in money supply), and in turn increase the cost of commodities (see the recent rise in the prices of energy, gold, and other commodities). The increased cost of commodities will pressure profitability of businesses, and increase the costs of consumers thereby reducing consumer purchasing power. Hence, in our opinion QE3 will be detrimental to credit quality for the US.

Read moreEgan-Jones Downgrades US Credit Rating From AA To AA-

Marc Faber: ‘Fed Will Destroy The World’ (Video)

Marc Faber: “Fed Will Destroy The World” (ZeroHedge, Sep 14, 2012):

“Everything will collapse” is the consequence Gloom, Boom, & Doom’s Marc Faber sees from the Fed’s latest ‘stimulus’ (and the fallacy and misconception of how money-printing can help employment). In a wondrously clarifying interview on Bloomberg TV this morning, Faber explained why he was ‘happy’, since “the asset values of his holdings will go up” but as a responsible citizen he is worried becausethe monetary policies of the US will destroy the world. It truly is class warfare under a veil of ‘its good for you’ as he notes: “the fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won’t. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols.” Congratulations, Mr. Bernanke.

Must-watch (or read the transcript) – it is truly remarkable.

Faber on more Federal Reserve stimulus:

“It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don’t like bonds. I don’t particularly like equities, but I think equities are a better space to be in than bonds.”

Read moreMarc Faber: ‘Fed Will Destroy The World’ (Video)

Paul Krugman: QE3 Should Have Been ‘More Stronger’ (Quote Of The Day)

Quote Of The Day: QE3 Should Have Been “More Stronger” (ZeroHedge, Sep 14, 2012):

A $4 trillion Fed balance sheet in 15 months (40% increase) and guess who is not happy. Yup, you got it.

From Bloomberg:

Nobel-prize winning economist Paul Krugman said that the third round of Federal Reserve asset purchases announced yesterday may be too small of a stimulus for the struggling U.S. economy.

The Princeton University economist, speaking at an event in Sao Paulo today, said that the Ben S. Bernanke’s pledge to buy $40 billion of mortgage debt a month could’ve included a commitment to maintain the asset purchase program for an extended period of time or until the unemployment rate falls to a targeted level.

“The change in tone is important but I would have liked a more stronger [sic] statement,” Krugman said. “It leaves things a bit unclear.”

When one hears such brilliance, what can one say but… Krugman.

And as a reminder

Spanish Debt & Bank Borrowings Soar To Highest In Decades As Home Prices Fall By Most Ever While GDP Shrinks

Spanish Debt, Bank Borrowings Soar To Highest In Decades As Home Prices Fall By Most Ever While GDP Shrinks (ZeroHedge, Sep 14, 2012):

If only the Fed or ECB could print another Spain with the same facility that they engage in currency destruction, (and make no mistake: yesterday’s “open-ended” Fed easing, is today’s ECB “open-ended” intervention, is tomorrow’s BOJ, is Sunday’s PBOC, etc.), now might be the time. Because things in Spain, no matter what one is told, are getting progressively worse. The reason: on one hand the continuing surge in regions and total debt, both of which jumped in Q2, on the other hand Spanish bank borrowings from the ECB soared to €389 billion in August, a new record, and up from €376 billion, just as TARGET2 liabilities rose to a new record of €429 billion as well, explaining where that surge in German TARGET2 claims went, on the third hand housing prices collapsed by 14.4% in Q2, the most ever, and tying all the hands together was that the Spanish economy contracted. But please ignore the details. Focus on the important things, such as the surge in the Ibex, the S&P, consumer confidence, gold, crude, etc, however long these continue. Because unless there is such a thing as a free lunch, with every incremental injection, all Bernanke proves is that the underlying reality is far worse than what is telegraphed to the people.Back to Spain, and its soaring debt

Spanish government debt rose to 75.9 percent of its economy in the second quarter of the year according to figures published by the Bank of Spain.

The figure is up 9.2 percent year-on-year and is the highest ratio in at least 22 years. The total debt ascended to €804 billion ($1.0 trillion), up €99 billion year-on-year, Spain’s central bank said in a statement Friday.

Central government spending increased by 4.4 percent to €617 billion, representing 58.3 percent of GDP.

Read moreSpanish Debt & Bank Borrowings Soar To Highest In Decades As Home Prices Fall By Most Ever While GDP Shrinks

Ron Paul On QE3: ‘Country Should Panic Over Fed’s Decision’ – ‘We Are Creating Money Out Of Thin Air’ – ‘We’ve Lost Control!’ (Video)

Ron Paul: “Country Should Panic Over Fed’s Decision” (ZeroHedge, Sep 13, 2012):

What took Ben Bernanke sixty minutes of mumbling about tools, word-twisting, and data-manipulating to kinda-sorta admit – that in fact he is lost; Ron Paul eloquently expresses in 25 seconds in this Bloomberg TV clip. Noting that “we are creating money out of thin air,” Paul sums up Bernanke’s position perfectly “We’ve Lost Control!”

25-second quick clip

Full 5 minute clip – must watch! from Mal-investment to Bernanke’s frustration…

Paul’s reaction to more Federal Reserve stimulus:

“It should not surprise anybody, but it is still astounding. To me, it is so astounding that it does not collapse the markets. [Bernanke] said, ‘We are in very big trouble. We are going to do something unprecedented and we believe it will not hurt the dollar.’  And yet the stocks, they say ‘we love this stuff.’ But the dollar didn’t do so well today and the real value of the dollar is measured against gold, and gold skyrocketed from its very low to its highest. It means we are weakening the dollar. We are trying to liquidate our debt through inflation. The consequence of what the Fed is doing is a lot more than just CPI. It has to do with malinvestment and people doing the wrong things at the wrong time. Believe me, there is plenty of that. The one thing that Bernanke has not achieved and it frustrates him, I can tell—is he gets no economic growth. He doesn’t do anything with the unemployment numbers. I think the country should have panicked over what the Fed is saying that we have lost control and the only thing we have left is massively creating new money out of thin air, which has not worked before, and is not going to work this time.”

Read moreRon Paul On QE3: ‘Country Should Panic Over Fed’s Decision’ – ‘We Are Creating Money Out Of Thin Air’ – ‘We’ve Lost Control!’ (Video)

What Does A $4 Trillion Fed Balance Sheet Mean For Gold And Oil

What Does A $4 Trillion Fed Balance Sheet Mean For Gold And Oil (ZeroHedge, Sep 13, 2012):

Earlier we explained why Bernanke’s actions today mean that the Fed Balance Sheet will likely grow to over $4 trillion by the end of 2013. Critically this flood of liquidity will raise the nominal price of every asset (from whimsical pieces of stockholder paper to barbarous relics and black gold). Some of these assets, like stock prices and high-yield credit spreads do have point-in-time ‘value limits’ to their price – though at times it seems a dream that fundamentals would ever matter again; but some have less of a binding constraint – such as gold. Should the Fed proceed, as seems likely, and do its worst/best to blow its balance sheet wad then we estimate Gold will be priced at least $2250 per ounce by the end of 2013(of course higher if the Fed sees no evidence of recovery). Meanwhile, deeper underground, the world’s mainstay source of energy, WTI Crude oil, could jump to record highs over $150 per barrel(which just happens to coincide with the ‘pegged’ value of oil in gold). It will be interesting indeed to see how the world’s socio-economic infrastructure hangs together should that occur – can’t happen? Different this time? Indeed it is now that Ben hit the big red ‘panic’ button.Gold vs Fed and ECB balance sheets… notably for QE2, gold priced in all the Fed balance sheet expansion within around half the period (around six months from Jackson Hole) and then overshot – this would infer we see Gold $2250 around the end of the first quarter next year – and expect some overshoot…

Oil vs Fed balance sheet… (which fits nicely into the 0.07 oz of Gold per barrel ‘peg’ that seems to have been ‘agreed’ with the world’s oil producers).

Charts: Bloomberg

The Fed’s Balance At The End Of 2013: $4 Trillion

The Fed’s Balance At The End Of 2013: $4 Trillion (ZeroHedge, Sep 13, 2012):

What happens next:

  • Imminently, the Fed’s Open Markets Operations desk will commence buying $40 billion in MBS per month, or about $10 billion each week. Concurrently, the Fed which is continuing Operation Twist, will still purchase $45 billion in “longer-term” Treasurys, sterilized by the $45 billion or so in 1-3 years Bonds it will sell until the end of the year at which point it runs out of short-term paper to sell.

End result: every month through the end of 2012, the Fed’s balance sheet expands by $40 billion in MBS.

  • Beginning January 1, 2013 the Fed will continue monetizing $40 billion in MBS each month, and will continue Operation Twist, however it will adjust the program so that it continues to increase its long-term holdings at $85 billion per month, without sterilization as it will no longer have short-term bonds to sell. It will also need to extend its ZIRP language “through the end of 2016” so all bonds 1-3 years are essentially risk free, as they are now, in effect eliminating the need to sell them.

End result: every month in 2013 the Fed will increase its balance sheet by $85 billion, consisting of $40 billion in MBS, and $45 billion in 10-30 year Treasurys, or the natural monthly supply of longer-dated issuance. The Fed will therefore monetize roughly half of the US budget deficit in 2013.

Putting it all together, the Fed’s balance sheet will increase from just over $2.8 trillion currently, to $4 trillion on December 25, 2013. A total increase of $1.17 trillion.

This is what the Fed’s balance sheet will looks like:

Another way of visualizing this is how many assets as a percentage of US GDP the Fed will hold on its books. Currently, this number is 18%. By the end of 2013, the Fed’s historical flow operations will be accountable for 24% of US GDP.

Why is this important? Simple: when the time comes for the Fed to unwind its balance sheet, if ever, the reverse Flow process will be responsible for deducting at least 24% of US GDP at the time when said tightening happens. If ever.

What is scariest, is that as of this moment, all of this is priced in. Any incremental gains in the stock market will have to come from additional easing over and above what Bernanke just announced.

And finally: Fed’s DV01 at December 31, 2013: ~$4 billion

As Predicted, Bernanke Launches QE3 to Help the Big Banks … Which Will Destroy the Economy

As Predicted, Bernanke Launches QE3 to Help the Big Banks … Which Will Destroy the Economy (ZeroHedge, Sep 13, 2012):


Image via Max Keiser

We predicted last week that Bernanke would launch QE3 this week.

Today, the Fed announced that it will buy $40 billion dollars of mortgage-backed securities per monthindefinitely.

This is just another bailout for the big banks. (If the government had instead given money directly to the consumer, we would be out of this economic slump by now).

This is in addition to numerous other easing programs. As CNBC notes:

In addition, the Fed said it will continue its program of selling shorter-dated government debt and buying longer-term securities, a mechanism known as Operation Twist. It also will continue its policy of reinvesting principal payments from agency debt and mortgage-backed securities back into mortgages.

***

“These actions, which together will increase the Committee’s holdings of longer-term securities by about $85 billion each month through the end of the year, should put downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative,” the Fed statement said.

And the Fed isn’t stopping there:

Read moreAs Predicted, Bernanke Launches QE3 to Help the Big Banks … Which Will Destroy the Economy

Schiff Vs. Insana; Matter Vs. Anti-Matter (Video)

Schiff Vs. Insana; Matter Vs. Anti-Matter (ZeroHedge, Sep 12, 2012):

Perhaps no better example of the two camps of perspectives on the market’s performance and the Fed’s expectations was on display this afternoon on CNBC. In the ‘we need some destructive asset clearing in order to get back to any sort of growth trajectory and the Fed is feeding an inflationary monster with its band-aid upon band-aid money-printing’ camp is Peter Schiff; while the other side of the investing octagon is Ron Insana who sees a ‘100% rise in stocks as evidence of something and that the Fed must do something, anything in order that we avoid the reality under the surface of a deleveraging deflationary world economy’. We are not sure of the winner as the shouting became too much to bear – but nevertheless the vociferous nature of the two combatants (each proclaiming their #winning-ness) shows the bifurcated world in which we live.

Barrick CEO: Gold Will Top $2,000 in Next Year

Gold Will Top $2,000 in Next Year: Barrick CEO (CNBC, Sep 11, 2012):

With more Federal Reserve stimulus coming and central banks around the world turning into buyers, gold prices have room to run higher, Barrick Gold CEO Jamie Sokalsky told CNBC’s “Squawk on the Street” on Tuesday.

The new CEO of the world’s largest precious metals miner is optimistic about the outlook for gold prices, saying, “Gold could definitely surpass previous highs and go above $2,000 and even higher in the next year.”) Barrick  has great leverage to higher gold prices, with every $100 increase in the price of gold adding an additional $500 million to earnings and cash flow, Sokalsky noted.

Read moreBarrick CEO: Gold Will Top $2,000 in Next Year

PIMCO’s Bill Gross Sells $30 Billion In Treasurys In August As Total Return Fund Cuts Government Exposure By Over A Third

Bill Gross Sells $30 Billion In Treasurys In August As Total Return Fund Cuts Government Exposure By Over A Third (ZeroHedge, Sep 12, 2012)

See also:

PIMCO’s Bill Gross (‘The King Of Bonds’): Buy Gold, Not Bonds (Video)

Germany’s Bundesverfassungsgericht Decision On ESM: German Taxpayer Pillage Can Continue (But With EUR 190 Billion Cap)

Karlsruhe Decision: German Taxpayer Pillage Can Continue (But With EUR190bn Cap) (ZeroHedge, Sep 12, 2012):

UPDATE: EURUSD unsure – but seems like ‘Unlimited’ ECB Bazooka’s trigger (ESM) is now capped at EUR190bn from Germany.The Kardinals of Karlsuhe kame through. As somewhat expected, they declined the complaint that, simply put – and among many other things, the ESM structure (i.e. German payments into it) stretches German constitutionality and can proceed to a broader vote next year – but basically – in a nutshell – there’s no coming back now. As expected there are conditions though – that the market seems perturbed by:

  • *GERMAN COURT ALLOWS ESM RATIFICATION WITH CONDITIONS :13347Z US
  • *GERMANY MUST SET CAP FOR LIABILITY UNDER ESM WEHEN RATIFYING
  • *GERMANY MUST MAKE SURE ITS ESM SHARE IS CAPPED AT EU190 BLN

Limited ESM (primary market) vs Unlimited secondary bond market buying (OMT). Go figure it out

Read moreGermany’s Bundesverfassungsgericht Decision On ESM: German Taxpayer Pillage Can Continue (But With EUR 190 Billion Cap)

Germany Can Ratify ESM Fund With Conditions, Court Rules

Germany Can Ratify ESM Fund With Conditions, Court Rules (Bloomberg, Sep 12, 2012):

Germany’s top constitutional court rejected efforts to block a permanent euro-area rescue fund, handing a victory to Chancellor Angela Merkel, who championed the 500 billion-euro ($645 billion) bailout facility.

The Federal Constitutional Court in Karlsruhe dismissed motions that sought to block the European Stability Mechanism, while ruling Germany’s 190 billion-euro contribution can’t be increased without legislative approval. The court said Germany can ratify the ESM if it includes binding caveats that it won’t be forced to assume higher liabilities without its consent.

“We are an important step closer to our goal of stabilizing the euro,” German Economy Minister and Vice Chancellor Philipp Roesler told reporters in Berlin after the ruling today. “It has always been the goal of this government” to establish a “clear limit and to include parliament in all important decisions.”

Read moreGermany Can Ratify ESM Fund With Conditions, Court Rules