Sunday, June 28, 2009

Where's the gold?

Voltron says: more funny business in the gold market. Should not directly affect GLD because it does not hold gold futures contracts.

http://www.huffingtonpost.com/nathan-lewis/wheres-the-gold_b_216896.html

Friday, June 26, 2009

There is no exit strategy

Voltron says: There is a lot of talk about how the Fed is going to soak up all of the money it's injected into the system before it causes massive inflation: the so-called "exit strategy". My take is there is no "exit strategy" The Fed and Treasury Dept need inflation to erase the massive household and federal debt. Whether or not that is the official plan is irrelevant because the fact is it's inevitable. Do you really think the US will *ever* repay the national debt otherwise? Do you think house prices will *ever* rise back to their highs otherwise? We're certainly not going to do it the old fashioned way - by earning our way out. We can't. We've exported all of our factories. Seventy percent of our gross domestic product is consumption. What the heck does that even mean? It doesn't even make sense! How is consumption suddenly production? The rest of GDP is mostly services. We can't refinance the household debt because the houses are "upside down". We won't be able to continue to refinance the national debt because the Chinese are already reducing their treasury holdings. Not just reducing the amount they are buying, they are actually reducing the net amount (by letting more debt mature than they buy, in effect demanding payment). So you can ignore all of this nonsense about "exit strategy".

The Fed will never allow deflation, but they there is a risk of price declines due to deleveraging as the "green-shoots" wither in the face of the next wave of adjustable rate mortgage defaults.

Thursday, June 18, 2009

Treasury to Auction $104 Billion In Debt Next Week, a Record

Voltron says: top story on drudereport.com right now

http://www.cnbc.com/id/31429270

Wells Fargo options market activity

Voltron says: someone is betting heavy that Wells Fargo will be below $19 in
July.

http://www.cnbc.com/id/31425970/site/14081545

Tuesday, June 16, 2009

Banks Can Still Be Insolvent

Voltron says: As usual, Wells Fargo is being especially fast and loose with
"wishful thinking" accounting. They are expecting to have almost as much
earnings as their much larger competitors.

http://www.fool.com/investing/general/2009/06/16/dont-kid-yourself-banks-can-still-be-insolvent.aspx

Monday, June 15, 2009

Weird stuff going on

Voltron says: I'm back on the west coast.

The foreign press has been covering news of 2 Japanese citizens caught with $134 BILLION in $500 million US Treasury bearer bonds. It seems unlikely to me that they are counterfeit because if it was part of a fraud, smaller denominations would seem more practical.

http://www.bloomberg.com/apps/news?pid=20601101&sid=ayy1QKcwcGN0

At the same time, the Japanese finance minister says "our trust in U.S. Treasuries is absolutely unshakable."

http://www.bloomberg.com/apps/news?pid=20601101&sid=agTTqVJ0rhJI

There is also over 10 million in gold missing from the Royal Canadian Mint, which explains why I have not been able to open an account there through Kitco.

http://www.upi.com/Top_News/2009/06/09/Report-Canadian-mint-lost-many-millions/UPI-41591244553596/

Foreign holdings of US debt is falling as the US credit rating is at risk.

http://finance.yahoo.com/news/Foreign-demand-for-US-apf-15524501.html
http://www.reuters.com/article/InvestmentOutlook09/idUSTRE55E6BM20090615

Wednesday, June 10, 2009

Here Comes Hyperinflation

http://www.businessinsider.com/henry-blodget-here-comes-hyperinflation-2009-6

Wells Fargo not invited to the party

Voltron says: Wells Fargo was one of the few large banks that is not allowed to repay the government bailout money.

http://blownmortgage.com/2009/06/09/wheres-wells-fargo-in-the-tarp-repayments/

Voltron says: also Barrons has an artcle saying "Wells Fargo is on the comeback trail" and Barrons is always completely wrong, which is why I read it religiously.

http://online.barrons.com/article/SB124457809432599229.html

Russia May Swap Some U.S. Treasuries for IMF Debt

Voltron says: looks like Russia may lead the way out of Treasurys

http://www.bloomberg.com/apps/news?pid=20601087&sid=ahoIPyEdpHUI

Monday, June 1, 2009