ECON FUNG RED ALERT: 11/27/09-11/30/09

[doctor_fungcool]

The signs are there for a huge sell off on one of those two dates.....


n his gloomiest prediction yet, Marc Faber sees big financial bust leading to war.

INTERNATIONAL. Marc Faber, the Swiss fund manager and Gloom Boom & Doom editor, said eventually there will be a big bust and then the whole credit expansion will come to an end. Before that happens, governments will continue printing money which in time will lead to a very high inflation rate, and the economy will not respond to continued stimulus.

Speaking at a conference in Singapore on Wednesday, Faber said: "The crisis has not solved anything. On the contrary there is less transparency today than there was before. The government's balance sheet is expanding, and the abuses that have led to the one cause of the crisis have continued".

"I think eventually there will be a big bust and then the whole credit expansion will come to an end," Faber added.

"Before that happens, governments will continue printing money which in time will lead to a very high inflation rate, and the economy will not respond to stimulus".

In one of his Gloomiest predictions, Faber, referred to as Dr Doom, said "the average family will be hurt by that, and then in order to distract the attention of the people, the governments will go to war".

"People ask me against whom? Well, they will invent an enemy," Faber said.

http://www.bi-me.com/main.php?id=42214&t....

Additional analysis from MISH:
Discussion of Ideas From The Article

Faber: There will be another war and it will be against an imaginary enemy
Mish: I certainly agree the next war will be against an imaginary enemy. Nearly every war is against an imaginary enemy and/or of no vital interest of the US. WWI, Korea, Vietnam, and Gulf War II were all needless. WWII was a direct result of WWI. The "War on Terror" is preposterous. Terror is a method. Waging a war on a method against an enemy that has no real country is bound to fail and waste a lot of money in failure. As for where next, given Obama's sabre rattling against Pakistan, that is one place to keep an eye on. Iran is another.

Faber: The S&P 500 and the Dow Jones will go down relative to gold.
Mish: I concur. The question is in what way. The key word in the above sentence is "relative". Gold can easily stay flat, rise, or drop while the bottom falls out of the S&P.

Faber: Eventually there will be a big bust and then the whole credit expansion will come to an end. Before that happens, governments will continue printing money which in time will lead to a very high inflation rate, and the economy will not respond to stimulus.
Mish: The economy is not responding to stimulus right now, at least in any meaningful way. 100% of the GDP growth was directly related to government stimulus. The idea that government spending can start a genuine economic recovery is ridiculous. Nonetheless, government spending can start an artificial boom. The housing bubble is an example of an artificial boom. However, for a boom to start, individuals and businesses have to be willing to go along. That is the way it works in a credit based economy. Right now personal credit is contracting, credit card lending is falling, and businesses simply do not want to expand in the face of tax increases and high unemployment. Unless and until the Fed reignites another credit boom, high inflation is unlikely. The fear now should be more of what Congress does than what the Fed does. Yet it seems Congress is getting a bit leery over these huge deficits. Congress will spend of course, but will it be enough to matter much? I doubt it, at least until we have more purging of consumer and corporate debt via bankruptcy.

Faber: US government will increase its stimulus spending should the Standard & Poor’s 500 Index fall toward 900.
Mish: Agreed but it will not help for reasons stated above.

Faber: The S&P will not drop below 800 or 900, and eventually will go higher in nominal terms, but not necessary in real terms. A correction is coming in the near term.
Mish: I doubt the bottom is in, but it could be. If it is in, then I expect a retest closer to 700 than 900. It is conceivable the S&P drops to 500, which by the way I think is fair value. Japan had two lost decades and I expect the US will have them as well.

Faber: The capitalistic system 'as we know it today' will collapse.
Mish: Agreed. The credit based fiat model of fractional reserve lending and fabrication of money out of thin air has reached its pinnacle. See Fiat World Mathematical Model for more details. Global wage arbitrage and outsourcing are icing on the cake. Mathematically it is impossible for the current Ponzi scheme of ever increasing levels of debt to survive. When and how it finally blows up is the only issue.

Faber: Central banks will continue to print money at full speed, but long-term this strategy will lead to a fall in purchasing power and living standards, especially in developed countries.
Mish: Agreed

Faber: The years 2006 and 2007 were "the peak of prosperity" and the world economy is not likely to return soon to that level.
Mish: Agreed. I had quite some time ago proposed Peak Credit and her twin sister Peak Earnings have arrived. Here is a snip from the former. ... That final wave of consumer recklessness created the exact conditions required for its own destruction. The housing bubble orgy was the last hurrah. It is not coming back and there will be no bigger bubble to replace it. Consumers and banks have both been burnt, and attitudes have changed.

Faber: The best way to deal with any economic problem is to let the market work it through.
Mish: Agreed

Faber: The way communism collapsed, capitalism will collapse.
Mish: I disagree on a technicality. Capitalism will not collapse, because we are not practicing capitalism. Instead, we are practicing a perverse blend of corporate fascism, socialism, corruption, and padding of the pockets for and by those running the country. Yes, that will collapse.

Faber: “No decent citizen should trust the Federal Reserve for one second. It’s very important that everyone own some gold because the government will make the dollar (in the long term) useless."
Mish: No decent citizen should trust any central bank anywhere. The problems go far beyond the Fed and in the long run all fiat currencies are worthless. Fiat currencies do not float, instead they all sink at varying rates.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.c....

[doctor_fungcool]

http://www.youtube.com/watch?v=0xhI2...layer_embedded

Pete Schiff on gold..housing..ect

[doctor_fungcool]

North/Latin America
INDEX VALUE CHANGE OPEN HIGH LOW TIME DJIA INDEX 10,338.00 -104.00 10,447.00 10,465.00 10,313.00 09:16
S&P 500 1,095.10 -13.80 1,109.00 1,111.00 1,092.10 09:17
NASDAQ 100 1,774.00 -20.25 1,793.75 1,793.75 1,769.75 09:17
S&P/TSX 60 686.70 -6.10 687.80 688.00 684.00 09:04
MEX BOLSA 31,396.00 410.00 30,905.00 31,400.00 30,905.00 11/25
BOVESPA 67,280.00 -1,020.00 67,350.00 67,490.00 67,220.00 09:12


Europe/Africa
INDEX VALUE CHANGE OPEN HIGH LOW TIME DJ EURO STOXX 50 2,837.00 -60.00 2,882.00 2,883.00 2,824.00 09:12
FTSE 100 5,261.50 -103.50 5,336.00 5,339.50 5,252.50 09:12
CAC 40 10 EURO 3,725.00 -79.00 3,782.00 3,785.00 3,705.50 09:12
DAX 5,695.50 -107.50 5,775.00 5,778.50 5,663.00 09:12
IBEX 35 11,749.00 -208.00 11,885.00 11,895.00 11,718.00 09:12
S&P/MIB 22,320.00 -453.00 22,660.00 22,675.00 22,220.00 09:07
AMSTERDAM 311.10 -7.35 317.00 317.00 310.50 09:12
OMXS30 951.50 -21.00 966.50 967.75 951.00 09:12
SWISS MARKET 6,337.00 -86.00 6,401.00 6,401.00 6,307.00 09:12



Asia/Pacific
INDEX VALUE CHANGE OPEN HIGH LOW TIME NIKKEI 225 9,350.00 -40.00 9,390.00 9,390.00 9,310.00 06:00
HANG SENG 22,177.00 -423.00 22,644.00 22,644.00 22,089.00 03:15
SPI 200 4,677.00 -41.00 4,707.00 4,713.00 4,648.00 07:59

[doctor_fungcool]

WORLD FINANCIAL COLLAPSE TRIGGERED IN DUBAI SAY EXPERTS! 26-Nov-09 08:26 am
LONDON (AP) -- World stock markets fell sharply Thursday as investors fretted over the debt problems at Dubai World, a government investment company, and the continued fall in the dollar.

Markets are usually relatively quiet when Wall Street is closed for a holiday, as it is Thursday for Thanksgiving Day -- not so today.
In Europe, the FTSE 100 index of leading British shares was down 99.84 points, or 1.9 percent, at 5,264.97, although trading has been halted for over an hour because of technical problems.

TECHINICAL PROBLEMS MY AS S! HERE IT COMES BOYS!

Sentiment in stocks has been dented by the news that Dubai World, which is thought to have debts totaling around $60 billion, has asked creditors if it can postpone its forthcoming payments until May. That has stoked fears of a potential default and contagion around the global financial system, particularly in emerging markets.

[Buster]

Absent the high frequency trading methods used to manipulate the markets, reality will show through. Whether the markets hold together until the Pigmen get their year end bone-us is the 64Billion dollar question.

[doctor_fungcool]

Originally Posted by Buster

Absent the high frequency trading methods used to manipulate the markets, reality will show through. Whether the markets hold together until the Pigmen get their year end bone-us is the 64Billion dollar question.

What a great play on words....bone us.....hmmmmmmmmm.....must add that to my lexicon.

Thursday, 26 November 2009 12:46
The London Stock Exchange said today that it had halted trading due to a technical hitch, and after steep equity market falls linked to a debt default request by Dubai.

[doctor_fungcool]

Dubai default fears spook investors
Palm jumeirah in dubai
Gulf turmoil sparks flight to safety as money flows into ‘safe havens’

[SNOWSQUAW]

gold down today. any thoughts on that?

[somdwatcher]

Dubai and other arabs trying to raise cash??

[BlueNewton]

Originally Posted by SNOWSQUAW

gold down today. any thoughts on that?

Liquidity is tightening. Dramatically.

[shane]

Originally Posted by SNOWSQUAW

gold down today. any thoughts on that?

Temporary, thin market, already climbing back up now.



If you see it as a buying opportunity, you can lock-in price over phone
today and wire funds tomorrow at...
www.tulving.com

"Open 24 Hours A Day-7 Days A Week, Including ALL Holidays."


Got God, Grub, Guns & Gold?
Panic Early, Beat the Rush!

- Shane

[doctor_fungcool]

Originally Posted by SNOWSQUAW

gold down today. any thoughts on that?

Even if gold were to drop $100-$200 per oz in one days time, personally, I would still be a buyer....All fiat world currencies are just that fiat. They represent the full faith and credit of the country issuing the currency. Since many countries are nearly bankrupt, the currencies printed by those government is, in my opinion, worthless. For over 4000 years, gold has held a certain intrinsic value...Gold now...gold forever more, that's my motto...(don't forget silver either) Of course, gold is only one portion of a person's preps......... there are numerous other things that a person should have in order to survive what's coming.

Begin here http://survivalblog.com and then check out this site, which contains an interesting blog by DisasterCat
http://www.imaprepper.org/

[SNOWSQUAW]

thanks shane and doc.

guess on the dips I will "gobble gobble' up more gold and silver !

sorry- feeling punny today!

[shane]

Originally Posted by doctor_fungcool

Even if gold were to drop $100-$200 per oz in one days time, personally, I would still be a buyer....All fiat world currencies are just that fiat. They represent the full faith and credit of the country issuing the currency. Since many countries are nearly bankrupt, the currencies printed by those government is, in my opinion, worthless. For over 4000 years, gold has held a certain intrinsic value...Gold now...gold forever more, that's my motto...(don't forget silver either) Of course, gold is only one portion of a person's preps......... there are numerous other things that a person should have in order to survive what's coming.

I like this poster here, sums up your thoughts, and mine, just right...




Got God, Grub, Guns & Gold?
Panic Early, Beat the Rush!

- Shane

[G-Man]

Today, 11:54 AM
somdwatche
Contributing Member
Join Date: Oct 2008
Posts: 242

Dubai and other arabs trying to raise cash??

Yeah, they will have to sell their gold plated toilets....

[spinnaker]

I cringe at the thought of all of the people who have, or are, unloading their gold jewelry right now. A month or two down the line, they will be kicking themselves.

[doctor_fungcool]

http://www.youtube.com/watch?v=1VGTd...layer_embedded

If you can see the VID....see it...it was brought to my attention from notthecrew....a fellow newshound...

Dow futures down hard...

See this vid...it's current.

Cliff's notes on vid

Dubai to delay debt payments

The debt payments are finite

Problems with credit default swaps in Dubai

Dubai could default bringing down the whole financial system of the western world.

[doctor_fungcool]

Ticker forum is either locked down or out of commission....I don't know. He does tend to lock it down during certain periods of market activity.....They're back up...maybe a glitch...

[doctor_fungcool]

Smoking gun from Schiff...Bernanke has never gotten anything right.

See the VID...read the article

http://finance.yahoo.com/tech-ticker...icials-Respond

Ben Bernanke Has Never Gotten Anything Right," Peter Schiff Says: Fed Officials Respond
Posted Nov 26, 2009 09:00am EST by Aaron Task


Putting Peter Schiff on a panel with St. Louis Fed President James Bullard and former Fed Vice Chair Alan Blinder is asking for trouble or, at the very least, a heated debate.

That's just what occurred last Sunday night in New York at an event sponsored by Princeton's Business Today.

Predictably, Euro Pacific Capital's Schiff disagreed with Bullard and Blinder on just about everything, including the government's role in causing the crisis, and the outlook for the economy and the dollar.

But the most contentious moment came toward the end of the evening when a student asked the panel to comment on Ben Bernanke's 2005 "global savings glut" theory, and what role China's high saving rate played in the credit bubble.

Schiff's response, "Ben Bernanke has never gotten anything right," generated some guffaws from the crowd and a sharp retort from Blinder and Bullard, who rose to Bernanke's defense.

Check the accompanying clip for more and don't miss our earlier coverage from the event:

* Fed Face-Off: Peter Schiff Goes Toe-to-Toe With Alan Blinder, Jim Bullard
* Jim Bullard Is Not a Dove: St. Louis Fed President Talks Bubbles, Recovery and Fed Audit

http://finance.yahoo.com/tech-ticker...icials-Respond

--------------------------------------------------------------------------------------

[Double_A]

Originally Posted by spinnaker

I cringe at the thought of all of the people who have, or are, unloading their gold jewelry right now. A month or two down the line, they will be kicking themselves.

+1

considering many keep an empty pantry and have no preps, their gold & silver jewelry maybe the only thing of intrinsic value worth pawning.

[China Connection]

Gold is not where it was years ago if inflation is factored in. I had quite a bit of it at one stage in Australia. It wasn't easy to find a place to sell it when I wanted money. That was in Sydney. The people in control are not going to be paying you big dollars for it when things have collapsed.


The Middle East collapsed a few years back.


Food will be the tradeable thing in the future as with war and millions of people flooding out of cities in search of food the farmers will just either get killed or stop planting. Having only 2% of your population in the farming sector is asking for it in a big way. Your farming system is dependent also on cheap oil prices. Soon oil will inflate along with everything else that you have to buy in, big time.

Depopulation is going to start big time soon and when it does who is going to be running around buying gold up? It is a commodity that is dependant on demand like everything else.

Will it go up in US dollar terms? Yes but not as fast as most other things so like paper money it will loose perchasing power not gain.

[SNOWSQUAW]

ultimately pms will go down. but we have a BIG upside to go. the trick will be unloading them at the right time!

[Sleeping Cobra]

Some people say that China, India, Brazil etc will "make it" but i expect the whole world to go down when the USA goes down.

[China Connection]

If we have something like the Spanish Flu that wipes out a lot of the population in places like China then it is unlikely the the population will continue to find work. Even now not many school leavers are finding work.

Over all things seem to be holding together here in China. However half the population just scraps by on enough food to live. The big cities give a false picture of how the average person lives in China.

[MDINMT]

Originally Posted by China Connection

If we have something like the Spanish Flu that wipes out a lot of the population in places like China then it is unlikely the the population will continue to find work. Even now not many school leavers are finding work.

Over all things seem to be holding together here in China. However half the population just scraps by on enough food to live. The big cities give a false picture of how the average person lives in China.

As it does here.

[doctor_fungcool]

http://www.bloomberg.com/markets/stocks/futures.html
click here for futures.

[Bubba Zanetti]

Thanks for your work, Dr. Fung.

[Maher]

I agree with China C. on the gold idea. NO ONE has any business buying gold or silver until all their prep needs have been met. I have NO sympathy for gold and silver speculators. IMHO, they are no better than any other speculator who only looks to make a quick buck on the misfortunes of others.

In the near future, if you have resources that allow you to feed others you will be doing a great service to you fellow humans. The basic necessities will be paramount, not gold or silver. Gold and silver are good if one wants to store purchasing power over the long run, but in the short run PMs will be almost devoid of any value because you can't eat or use them in any practical way.

Your ability to do things with materials on hand will be genuinely valuable. Good health and the ability to work will also be critical. In addition to your food and other preps you should cultivate every skill you can, before it's lights out. Having some practical medical, military and tactical skills may also come in very handy.

[doctor_fungcool]

Gold Krugerrands Run Out
By Patrick A. Heller




For some time, I have been warning that apparently plentiful supplies of gold and silver bullion-priced coins and ingots could quickly evaporate. Last Thursday we saw the first signs of a looming shortage of physical metals when just about all U.S. bullion wholesalers were unable to accept orders for the South Africa Krugerrand. One primary distributor said they expected coins in a few weeks, which I think means that they are waiting for a shipment of freshly minted coins from the South Africa Mint. My own company had to discontinue accepting new orders until we could lock in a supply.

Tens of millions of Krugerrands have been struck since they were introduced in 1967. They are not rare. If demand for physical gold is so strong (and the World Gold Council last week reported that global third quarter demand was 15 percent higher than the second quarter) that they are no longer available, we could quickly see a domino effect where other gold and silver bullion-priced products also become sold out.

We may see some temporary price dips this week as the gold and silver options expire. However, I fear that there is little time to lock in physical precious metals at reasonable premiums for quick delivery.

But this is short-term news. There is also a longer term view to consider.

Periodically, I have discussed reasons for owning gold that have nothing to do with direct consideration of whether prices are likely to rise in the future.

This week at Thanksgiving I will include owning gold and silver as one of my blessings. After I bought both metals in the 1970s, it then enabled me to purchase a home in 1980 for a much lower cost than if I had not owned them.

In more recent years, owning precious metals has helped me survive some of the ravages of the falling values of paper assets like stocks and bonds and the U.S. dollar.

As I reflected on the blessing of owning gold and silver, it occurred to me that it has also better enabled me to protect and care for my children.

Twelve years ago, the financial calamities in the Far East were so devastating in Indonesia that those who did not own gold were wiped out financially. Those who owned gold saw little impact on their standard of living.

There are hundreds of thousands of Southeast Asian refugees in the United States today who survived because they owned gold to get them away from the governments that killed so many of their compatriots. Owning gold definitely helped them provide a better life for their children.

After all the economic trials and tribulations of the past 30 months, it is not too difficult to imagine a world where U.S. dollars finally fall to the intrinsic value of the paper and ink used to produce them. In such a circumstance, all the dollars in your wallet, your bank accounts, your credit and debit card limits, and the like could become useless in providing for your children.

There are a large number of potential gold buyers who have not yet felt the urgency to make their first purchase. Maybe it just doesn’t seem that important to you. If it isn’t, then think about any children or grandchildren you may have. Would you buy gold if it had the potential to someday improve your ability to care for their health and welfare?

If you don’t yet own gold (or silver), then do it now. If not for you, then do it for the children.

[nadhob]

Hong Kong dba as the Hang Sang Index down 700 points on the open.
Things going to get ugly real quick...

[Y2kO]

Gold and silver are good if one wants to store purchasing power over the long run, but in the short run PMs will be almost devoid of any value because you can't eat or use them in any practical way.

Things you'll be able to do with gold (and can do now):
- Buy land to farm
- Buy seed to plant
- Buy the labor of workers to roof your house or anything else
- Pay off your mortgage or that of your children
- Buy farm equipment or tools from bankrupt farmers
- Pay for medical services
We know a number of people in our community who know the value of PMs. They buy and sell all the time.

[Y2kO]

Originally Posted by doctor_fungcool

Smoking gun from Schiff...Bernanke has never gotten anything right.

See the VID...read the article

http://finance.yahoo.com/tech-ticker...icials-Respond

Ben Bernanke Has Never Gotten Anything Right," Peter Schiff Says: Fed Officials Respond
Posted Nov 26, 2009 09:00am EST by Aaron Task


Putting Peter Schiff on a panel with St. Louis Fed President James Bullard and former Fed Vice Chair Alan Blinder is asking for trouble or, at the very least, a heated debate.

That's just what occurred last Sunday night in New York at an event sponsored by Princeton's Business Today.

Predictably, Euro Pacific Capital's Schiff disagreed with Bullard and Blinder on just about everything, including the government's role in causing the crisis, and the outlook for the economy and the dollar.

But the most contentious moment came toward the end of the evening when a student asked the panel to comment on Ben Bernanke's 2005 "global savings glut" theory, and what role China's high saving rate played in the credit bubble.

Schiff's response, "Ben Bernanke has never gotten anything right," generated some guffaws from the crowd and a sharp retort from Blinder and Bullard, who rose to Bernanke's defense.

Check the accompanying clip for more and don't miss our earlier coverage from the event:

They must have been in a crowd of kool-aid drinkers. Schiff is doing a tremendous job exposing Bernanke and the Fed crowd for what they are.

[Red Baron]

Dow futures down -250.

Isn't Friday a half trading day?

[Y2kO]

Check out report from Robert Chapman

For those of you with shortwave capability, you can listen to the replay of his discussion of this tomorrow at 8PM: DGSTC with Bob Chapman live on Short-wave 7.415Mhz M-F 4:00PM ET, Replays Tuesday thru Friday 8pm RT 7.465Mhz

Click on 'Wednesday' at that archive site, you can catch the program re-run where Chapman gives the details he will be further reporting on in the future. Here is a brief summary:

-There are 2035 banks in imminent danger of collapse. He expects 2300 to 3000 bank collapses next year, as the Fed consolidates them in preparation for Global Government.

- The Fed will pull 1 to 5 Trillion dollars out of our economy by June to collapse it, or we'll have hyperinflation.

-There will be a complete crash of municiple bonds next year.

-Get out of dollars, CDs, annuities. Stock market will break down below 6600 next year.

Listen at http://www.discountgoldandsilvertrading.net

Chapman has a 98% accuracy rate.

[Y2kO]

Other Chapman comments in that broadcast:


-Military sources, Green Beret, report they will not follow NorthCom orders to disarm American people or other anti-American actions which support the New World Order.

-Bankers are being told to find space for new currency. The dollar will be devalued in 2010 (as will some other currencies).

-Commercial real estate will implode in 2010.

-Inland Corp is now buying up property at 40 cents on the dollar. They will now stop as they expect to buy at 30 cents on the dollar later in 2010.

[doctor_fungcool]

MARKETS IN CRASH MODE...FUTURES ARE PLUMMETING....STAY AWARE.

Futures down 300.........

[garnetgirl]

Check your bank's safety rating at bankrate.com. It can change!

I've watched our local bank go from a 4-star to a 2-star over the past 18 months - probably due to the collapsing real estate market in our area.

In fact, we could not find a 4-star rated bank in our town. Mom checked one of her banks, and it had fallen to a 1-star rating.

Not good.

garnetgirl

[doctor_fungcool]

GOLD DOWN 30 DOLLARS....I'll be back in a bit...Please man this thread with breaking news...we could be seeing the second leg of the crash down.

[NH Yankee]

Doc

Where to you think PM's will go? Today? Week or so?

[doctor_fungcool]

Originally Posted by NH Yankee

Doc

Where to you think PM's will go? Today? Week or so?

Expect volatility on either side of the trade... that volatility could see $100 swings on the downside...or the upside.......that's my take anyway.....As far as gold as an investment goes, besides preps, I like PM's.......However, that being said, preps are first....pm's are second....for without preps...gold would not be practical.