Fed has Printing Press at the Ready

The Fed is “prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets,” the Federal Open Market Committee said in a statement after meeting in Washington.

Hey, and why not, printing money is quite profitable, where can I get me a business like that?

The US Treasury is going to issue so many Treasuries to pay for their stimulus programs, TARPs and other Alphabet soup programs it will overwhelm private party interest. So rather than allow interest rates to rise to try and attract more private purchases, the Fed will PRINT money and buy the Treasuries for themselves. And collect interest from American taxpayers. Let's not forget, the FED is a Private Bank.

No wonder their leader is so free with cash...it costs nothing to make, and they collect interest on every dollar they drop!

The Looting of America - J6P Awakens!

This is funny as hell (if you can stand the foul language!)...but indicative the Public is starting to push back hard against bankster gangsters...civil unrest coming to street corner near you?

http://dailybail.com/home/2009/1/25/there-are-no-words-to-describe-the-following.html

- Rinx

Deflating Bank Values

click image for larger view

and Canadian Banks are not immune..ala Royal Bank of Canada yesterday

- Rinx

Gold Keeping the Printing Press Boyz Honest

Slider On The Black post on SI today

Fiatgeddon...



Gold hits record highs in Euro & Sterling terms...http://www.reuters.com/article/marketsNews/idAFLN4501620090123?rpc=44The

Chinese want to de-value (as does EVERYONE else)...http://in.reuters.com/article/domesticNews/idINSP35192620090123

Trillions in global currencies being created out of thin airto prime the economic pump, as Central Banks all head towardZIRP and/or quantitative easing...http://online.wsj.com/article/BT-CO-20090121-710489.html

It's no longer about... "got Gold?" It's now about..."How much Gold you got?!?!"

Fasten your seat belts people & enjoy the ride!

Mo later,
S.O.T.B.

Another Leg Down?

Per previous blog entry, China's Q4 growth came in at 6.5%, BUT, given they report quarterly numbers using a trailing 12 month average, the sharp drop indicates actual growth was zero, or negative.

This is a bit of a shock to conventional market wisdom, yes China (and India) were expected to slow markedly but few thought they would also be in recession. The ramifications of a unified global recession are enormous, and this new reality shifts all expectations for recovery downward.

If China is worse off then thought, expect them to spend their savings stimulating their own economy! Good God, why should the US expect them to continue to buy their debt issues to finance their stimulus program? Chimerica is dead! Did you hear Gheitner's comments on China this morning, careful Tim don't bite the hand that feeds you (what a chump...how can a tax cheat be nominated as US Treasurer...oh I forgot, the illuminati said it shall be, make no mistake about it)

So, who then is going to buy all the US bonds used to finance the $3Trillion 2009 US deficit?
Answer: US Federal Bank (via printing press)

And, we enter the Dark Interregnum...

- Rinx

More Deflation News....nosedive in China

http://www.ft.com/cms/bfba2c48-5588-11dc-b971-0000779fd2ac.html?_i_referralObject=1008210693&fromSearch=n



- Rinx

Oil Sands on the Brink

The venerable Canadian oil sands miner, Suncor, just released Q4 results and recorded a $200M+ loss for the quarter. Production costs were $41/Bbl (ouch)

What does that say for the balance of the industry in this low oil price environment? And pass the goat horns to the Alta Govt for jacking royalties and driving another stake into the heart of the industry...talk about killing the goose that lays the golden egg

The US government is printing money like mad (actually quantitative easing, ... "printing money like mad" scares the hell out of people)...and the $USD continues to appreciate.

It's quite a paradox, the USD theoretically has infinite supply (it's just paper and pixels) and rallies...and Oil, a finite resource that is depleting at 9%+/yr according to the IEA, is under the heel of the USD jackboot...this is a trend that HAS to reverse at some point...but the old adage is true...the market can remain irrational longer than one can remain solvent.

- Rinx

What Does Deflation Look Like?

Nissan's factory test track. Apparently they have run out of room to store vehicles for lack of sales and overflowing dealer lots.

Also

Lower vehicle prices coming to a dealer near you. Count on it.

- Rinx

I Want My Bailout Money!

http://www.youtube.com/watch?v=dnT21hmlT4o

One Day the String will Snap

US Q1 Deficit

$485 Billion = US deficit in the FIRST QUARTER...that's > $150,000,000 per month...or $5.5Billion per DAY!?!

A $2Trillion dollar Deficit for the current FY is baked in the cake...in fact this is before the near $1Trillion "stimulus" package being prepared by the Obama team...and does not take into account the fact the US economy is accelerating to the downside...less tax revenue, higher social program payments. A $3 Trillion deficit for this FY is a high probability.

Question I have....who the hell is going to buy all this new debt??? The Chinese? don't count on it, they have their own set of issues due to the US slow down. This year will severely test the great Chimerica symbiosis that has kept the credit bubble blowing since 2002.

The other Question I have...IF the US finds a buyer for this new debt...where is the capital going to come from to invest in the next generation of companies and ideas that will pull the global economy out of this deflationary death spiral. The US is giant sucking machine that is inhaling vast quantities of precious capital....that ultimately will be squandered.

And I just checked the US Dollar index...and it's rallying against all currencies. UFB. US Treasuries will be the greatest bubble of them all...and it will blow up just like every other bubble in recorded history.

And the pin that pricks the bubble...what will it be? When the rest of the world finally says no to purchasing US debt, or can't afford it, or both. The ONLY recourse left is to print money out of thin air...and the house comes tumbling down.

- Rinx

Nortel - BK

Nortel just announced they are filing for bankruptcy...the end of the Canadian tech behemoth, and the final chapter in a storied run. At one point in the gogo tech boom of the late 90's, Nortel's market cap was close to half trillion and that value represented 38% of the entire market cap of the TSX. Nortel burned a wide hole in many Canadian investor pockets and destroyed billions in capital.

See ya.

Nortel and all companies with broken business models need to be left alone and let die. This artificial rescuscitation of broken companies is the exact wrong antidote. Throwing good money after bad has never been a good idea...case in point GM announced yesterday (in a quiet soft shoe manner) that the current allocation of bail out money will probably not be enough. Surprise, surprise, surprise.

- Rinx

MIA

Wow, it's January 4th and my last blog entry was back mid-October....so much has transpired...where have I been??

New Year's resolution...post often...don't care so much about quality of content...no one is smart day in/day out.

Post your thoughts for the day, often what I'm thinking I read about later and say oh shit, it's hardly original content so why bother blogging.

New Year's prognostication...Inflation is a POS prediction, Deflation rules in '09. Cash is king. Damn, that's hard to write, it goes against my prevailing thoughts for most of '08.

Stay lucid, don't marry an opinion. Message to self, read previous sentence. Often.

Carpe Diem!
Rinx