Monday, June 20, 2011

Moral Hazard Monday- Greece Prepares to Sell Off Public Assets to Get "Loan"; Calls For Greece to Leave EU Intensify; Bonds Go Haywire In Portugal as Contagion Remains Key Word; Spain Erupts in Violent Protests; Poll Results, It's a Shocker; Gold Trading Becomes Illegal After July 15th; Japan Logs 2nd Biggest Deficit in History in May; Earth is Changing, and Not For the Better, Ash Clouds Shut Down Chile, Circle Entire Earth; Fukushima Flash- Cover-ups du Jour; TEPCO Stock Price More Important Than Life; Another U.S. Nuclear Power Plant Has Level 4 Emergency; More

This week's economic news schedule is very light. Other than the $20 Billion that will be injected into the stock markets via POMO, there is nothing to support Goldman Sachs' cash cow bonus maker high-frequency-algos the "stock markets." In fact we have the results of bullish radioactive catastrophes, as week after week of worse than expected financial reports are flowing in and yet "the markets" remain at 12,000 - a level that was seen as overbought when it was first reached in 2006. Everyone is aware that POMO injections are illegal the norm and the only thing keeping these markets propped up. That being said, July 11th is the last day of fiat money printing illegal activity the POMO schedule which means once the free money river stops flowing, "the markets" will have to return to earth - some Wall Street veterans see a 4500 Dow and 450 S&P if POMO stops (and that's after 10% YoY inflation included).

In other words, like a magician's fast hand card trick, one minute you see it, the next minute you don't. The same can't be said of physical gold and silver which will become illegal to trade for the common layman starting July 15th. Coupled with the ever increasing margin hikes on the CME, we can clearly see TPTB losing control of the whole house of cards - their actions indicate so.

As the Global Financial Judgement Day arrives (very soon) we can anticipate more desperate measures imposed for the layman. The next possible measure we can expect to see is the halting of gold and silver purchases. Then as the wheels fall off the financial system, possible confiscation of gold - exactly as it occurred during the Great Depression.

Whatever the case, the handwriting is on the wall already. The wheels are set in motion and this slow motion train wreck we are experiencing will go full speed ahead into a giant mountain side. One only needs to look Japan's latest economic news. Today's article in the Manichi Times says all that needs to be said - "Japan logs 2nd-biggest trade deficit as exports keep falling in May." Period. Now, who said that Japan's catastrophe was bullish? And who has been warning time and time again that the results will be horrific? Of course, Japan's disastrous economic results for May are being downplayed and spun to death. Not a headline to be found in U.S. news about this.

The results from our non-scientific and politically incorrect poll are in. An overwhelming 41% of our readers voted that a Great Depression is imminent - within 6 months or less. Twenty five percent voted a Great Depression is coming within 12 months. Twenty three percent voted a Great Depression is coming within 24 months. Five percent voted it can go either way. And last but not least, 4% voted no Great Depression. There are two ways to look at this poll. On the one hand, one could say this poll represents "dumb money" as Wall Street geniuses call them and it means absolutely no Great Depression is coming. On the other hand, the 89% that voted a Great Depression is coming soon could be spot on because they represent Main Street [insert any nation of the over 100 nations represented by our readers] and they are in touch with reality.

Our guess, Main Street has it right.

Our readers from Greece surely know the true condition of their country and from what we have learned, it's bad. Power outages will be the norm. The Greek gov't is so debased in their thinking so desperate, that they are planning to sell public property to foreign nations and banksters in order to get a bailout. Needless to say, the people are not so happy about losing their identity, heritage and their assets. Expect even more violent riots as the austerity measures being to take effect and tax increases shut off the consumer consumption spigot. Sovereign debt default remains a very real possibility. Tuesday is a momentous day for Greece as they vote on the budget and the future of Greece. The EU remains locked in battle over Greece as new moral hazards of bailing out Greece arise. The whole EU is on the brink as they manage to kick the can down the road only day to day. Portugal is tipping already as the 10yr bonds take a hit - now yielding 11.41%, or nearly the same as Ireland and the exact same trajectory as Greece. See our March archives for more information on the EU debt crisis.

In Spain, the situation is just getting heated up. The people have yet to feel austerity. As their burn rate has allowed them enough time to make it into 2012, we should expect to see the white flag pop up sometime in late Summer - along with bond yields. Already people are sensing what is coming and mass riots have begun.

As the financial world burns, so does the environment as the earth heats up - here, herehere and here. No matter what you hear from these so called "stock experts," none of this is bullish. Neither is Fukushima.

We learn more and more about cover-ups and lies in an attempt to paper over the life threatening situation. Here, EnergyNews reports that "radiation levels spiked 155 miles south of Fukushima after 1st explosion — Nuclear industry insiders told by officials to keep findings quiet."

We learn from the Manichi Daily News that TEPCO's stock price is more important than preventing radiation leaking. They are preventing a project to protect the drinking water because the cost of containing the molten nuclear fuel would costs TEPCO 100 Billion Yen.

And now the U.S. has it's own Fukushima as yet another nuclear power plant, this time the Cooper NPP has a level 4 emergency. As the river crests in late July, what will be the outcome?

We will update you on this developing situation as information is made available. 


  1. Mr. Fiat,

    There's plenty of bad news to go around, so you don't really need to embellish. In fact, there is no risk to individuals trading gold/silver after mid-July. That ruling applies to derivative contracts. Also, the CME just LOWERED margin requirements for gold.

  2. I'm not so sure about the precious metals law. One commenter on ZH said the Dodd/Frank act had no mention of it. Could be a hoax.

    The lucky thing on Cooper NPP is the levee wall opposite the plant appears to be the one being overtopped which should alleviate the pressure on the plant's side.

  3. @Anon- I'm not embellishing or sensationalizing anything. The language used to write the law is not very clear on what will be allowed, although OTC gold traded on margins from retail accounts will be prohibited July 15th. The notice from states "We wanted to make you aware of some upcoming changes to’s product offering. As a result of the Dodd-Frank Act enacted by US Congress, a new regulation prohibiting US residents from trading over the counter precious metals, including gold and silver, will go into effect on Friday, July 15, 2011.

    In conjunction with this new regulation, must discontinue metals trading for US residents on Friday, July 15, 2011 at the close of trading at 5pm ET. As a result, all open metals positions must be closed by July 15, 2011 at 5pm ET.

    We encourage you to wind down your trading activity in these products over the next month in anticipation of the new rule, as any open XAU or XAG positions that remain open prior to July 15, 2011 at approximately 5:00 pm ET will be automatically liquidated.

    We sincerely regret any inconvenience complying with the new U.S. regulation may cause you. Should you have any questions, please feel free to contact our customer service team.

    The Team at"

    More later on this.

    @Pecosbill- See above.