The Bell Tolls For Tim Geithner...

The NY Times is reporting that Jamie Dimon, CEO of JP Morgan, is being touted behind the scenes as a possible successor to Tim Geithner.  The NY Post also had the story.  The fact that this story has surfaced like this suggests that the end is near for Tiny-Brain Tim:

Mr. Dimon “would love to serve his country,” the newspaper quoted people familiar with his thinking as saying...here's the link:  NY Times: Geithner May Be Done

If Obama really wants to clean up the mess in the financial sector, he would find a replacement that has absolutely no economic ties to Wall Street or the Fed.  Since the primary purpose of the Treasury Department is to oversee the collection of tax revenues, the disbursement of those revenues and managing the liability side of the Government's balance sheet (i.e. issuing debt to finance the Government), perhaps someone with a solid background in accounting and bread and butter banking operations would be a good choice.  Since regional banks are the backbone of small business lending, and small business growth is the backbone of job growth and econmic stability, perhaps a solid candidate might be the CEO/CFO of a successful regional bank.

The problem with Jamie Dimon is that he would be nothing more than a retread of Stuttering Henry Paulson  - albeit a version of Paulson less the stuttering speech impediments.  Recall that Paulson is the person who essentially hijacked $700 billion from the Taxpayers and shuffled a large portion of that money thru AIG to Goldman Sachs, JP Morgan and others.  How can we possibly expect Jamie Dimon to act differently that Paulson did, which would be for him to act in the interests of the American Public and not the corrupt Wall Street Community?

This just in from a loyal reader:  The overall strategy needs to be to avoid Wall St and anyone who may be connected to that avenue. The Treasury needs to be about protecting the taxpayers $ - Wall St is inherently set up to abscond with it.

My response:  Putting Dimon in there would be nothing more than replacing a barking chihuahua with Godzilla dressed up as Florence Nightingale.

No Country For Old Men...

"People were always getting ready for tomorrow. I didn't believe in that. Tomorrow wasn't getting ready for them. It didn't even know they were there" ("The Road" by Cormac McCarthy).

This country needs to take care of its problems today. It is getting worse by the hour. In Colorado, public school teachers are going to face up to 17 days of furloughs next year. The State was trying to keep this a secret but an incompetent high school prinicipal let the cat out of the bag and concommitantly the fact was confirmed on NPR radio last week. The Jefferson County school district is facing a $42 million budget shortfall and deep cuts will be made to the educational protocol, but not to the incompetent bureaucracy that oversees the mess - nor to the incompetent politicians overseeing the incompetent administrators. Foreclosure filings in Colorado hit a new record during the 3rd quarter and Colorado has one of the stronger State economies. Nationwide over 14% of all mortgages were either delinquent or in foreclosure. A new record high for the 9th consecutive quarter. In some States the foreclosure/delinquency rate is over 20%.

Conditions in this country are getting worse for everyone except those in position to loot the system. Tim Geithner gets in front of Congress and ignorantly and arrogantly proclaims that he and Obama saved the system from collapse and that economic conditions are improving. THAT is an outright lie.  Real unemployment (not the Government-concocted crap numbers) increases daily, banks are jacking credit card rates to usurious levels and thereby choking off holiday shopping and State Governments are in the process of financially collapsing - all this after trillions of "stimulus" and bank bailout money was injected into the system. The reality is that Geithner and Obama have transferred 100's of billions of dollars from the Taxpayers to the big banks and big corporations. Does everyone realize that there's a tax break which gives new homebuilders billions in tax credits buried in the Bill that extended unemployment benefits and homebuyer tax credits?

Taking care of today means getting rid of Geithner, Bernanke, Summers and most of the rest of Obama's corrupt Administration. Until that happens, the problems are getting worse by the hour for everyone except the big bankers, who are getting paid record bonuses this year to do "God's work."  The only problem is that the money being used to pay those bonuses is coming from the Taxpayers. If Goldman Sachs CEO Lloyd Blankfein is doing "God's work," as he so proudly proclaimed last week, what is it exactly that Obama is doing?  Should we be pledging allegiance to the United States of Goldman Sachs, one Nation under Llyod Blankfein? Is this what everyone who voted for Obama voted for?  Obama ran on a campaign platform that was supposed to clean this mess up, get rid of the corruption, and CHANGE the way DC operates.  Instead, he's taken the problems perpetuated by many previous Administrations and is making them even worse.  Maybe this is No Country For The Middle Class...

Random Friday Afternoon Observations....

Gold and silver were unusually strong the past two days relative to the S&P 500 and the dollar.  Silver managed to hold two attempts to take it below $18.  Today it hit a low early this morning of 18.05 (December contract) but closed access trading at $18.51.  For most of yesterday and today, spot silver was trading in 2-4 cent backwardation (spot higher than the front month futures price), indicating an extremely high degree of demand for physical silver relative to its immediate supply.  I actually missed the closing price of gold on the Comex, but if you include the access market close, gold closed at an all-time record high.  Next week should be interesting, to say the least....

Some Congressional Democrats, led by Peter DeFazio of Oregon, are starting to jump on the "get rid of Geithner" bandwagon on Wednesday DeFazio called for Geithner's resignation on MSNBC.   Yesterday during Geithner's blow-smoke-up-our-ass session in front of the Joint Economic Committee, Congressman Kevin Brady point blank asked Geithner to resign:  "Mr. Secretary, you are the point person on the economy, and the buck, in effect, stops with you," Brady said. "For the sake of our jobs, will you step down from your post?"   Congressman Michael Burgess followed up with:  "I don't think you should be fired. I thought you never should have been hired."

The real issues with Geithner for me are the fact that he was found guilty of cheating overtly and for multiple years on his taxes and Obama should have withdrawn his nomination of Geithner as soon as these facts were revealed.  Rep. Burgess is right - Geithner should have never been appointed and confirmed.  But worse, it has now come to light that Geithner essentially transferred 10's of billions from the Taxpayers to the large investment banks which were derivative counter-parties with AIG when Geithner was head of the NY Fed.  Not only should Obama fire Geithner immediately on this basis, he should appoint an independent investigator to investigate every aspect of Geithner's involvement in this grand theft of Taxpayer money.   Geithner is a criminal for dodging taxes and he is likely an even bigger criminal for his role in the AIG/Goldman Sachs et al bailout.

I was going to pontificate about the possible criminal behavior of Fed Head, Banana Ben Bernanke, but I don't have the energy right now.  So on that note I'll end with, who gives a shit that Oprah is ending her talk show?

Obama Wants Greater Government Control Of The Internet

Oh what a tangled Orwellian Web your President weaves.  Just a few days ago Obama was in China lecturing and admonishing the Chinese about internet censorship (this from the man who has asked for a "kill switch" on the internet).  Now this as reported in yesterday's Wall Street Journal (Article Link):   "Federal regulators are considering whether the government should take greater control of the Internet and ask consumers to pay higher phone charges in order to provide all Americans with cheaper access to broadband Internet service."

Obama is further demonstrating that he is NOT what his supporters voted for and everything his opponents feared when they voted for his opponent.  His Presidency is taking this country deeper into economic Hell and deeper into what will be an irreversible Orwellian abyss. 

I would urge everyone to send emails to protest to their respective House Rep and BOTH Senators.

Hemingway's Proverbial "Bell" Is Tolling For the U.S. Dollar

I said to friends, family and colleagues way back in 2003 that the Federal Reserve and the Government were going to loot the public's wealth until there was no wealth left to loot (folks, this includes your retirement accounts).  We saw a major chunk of wealth ($700 billion) hijacked by Henry Paulson and transferred to the big banks via AIG.  Many of these other "TARP/TALF/SCREWME" Fed programs are backed by Treasury guaranantees and will ultimately end up with trillions in wealth transferred from the Taxpayers to the big banks and the people running the big banks, who are getting paid 10's millions to do "God's work,"  as per Lloyd Blankfein, CEO Goldman Sachs.

I mention this in the context of pulling some key quotes out of Stewart Thomson's latest freebie commentary (here's the link, the quotes below are from this article:  LINK).  The key point in this commentary (aside from his excellent analysis on the price action in gold), is that the Fed is in the process of massively devaluing the US dollar, which is an insidious and subtle way for them to confiscate your dollar-based wealth, including your IRA, 401k. any cash-equivalent investments like Treasury bonds, muni bonds, defeased munis AND bank savings and CD accounts.

Here is the key comment from Thomson's commentary with regard to wealth confiscation via dollar devaluation: 

The most important news item of the past few weeks is Dr. Ben Bernanke's statement yesterday.  He says he sees no overvaluation, let alone bubble-action, in the "asset markets". His number 2 man Kohn backed him up. This is a very powerful statement from the Fed. Note that he spoke of valuation more than price, and correlated the rise in commodity assets against the 64% rise in the stock market...Dr. Bernanke is laying out is that he doesn't care about $80 oil against a Dow at 10,000. He doesn't care what your food costs [are]. He's pretending prices are low and giving the green light to dollar devaluation.

The key point here is that the massive dollar devaluation going on right now is going to lead to a much higher dollar-based cost of living for everyone, especially as it translates into higher prices for imported goods, which make up a large portion of U.S. consumption.  The inflationary price effects of Bernanke's systematic devaluation of the dollar may not be obvious right now, but it will be in the next couple of years - and believe me, he is well aware of this fact.

In the meantime, as pointed out by Mr. Thomson, the entire financial media apparatus is trying to convince everyone that a massive, short-squeeze dollar rally is on the way - that the whole world is too bearish on the dollar and that will lead to a huge move up. Well, who do you think is taking the other side of this trade?  We know every huge institution and Central Bank that is participating in the dollar carry trade is feeding the market with a steady supply of dollars.  Furthermore, we are seeing most large-country Central Banks (and some small ones) using billions of dollar reserves to buy gold.  This is flooding the market with dollars as well.  Those are not exactly the conditions under which we would expect a big move up in the dollar.

Mr. Thomson notes:  The US dollar monthly chart is in a horrific situation. It shows many of the major indicators on sell signals. This is a disaster in the making, and Ben Bernanke has better chartists in the world at his beck and call. He knows the score, and the score is: Thumbs Down On The US Dollar.

In other words, despite the common view being propogated by the usual bourgeois-worshipped idiots (see Prechter, CNBC, Gartman) about an imminent move higher in the dollar, if you "follow the money," the money trail and the statements from Bernanke point to a continued depreciation in the value of the dollar.

All this is to say that you may think that you are being "safe" by keeping your money in dubious "higher quality" fixed income investment (bonds, CDS, money markets, etc), but the fact of the matter is that these are nothing more than stagnant cesspools of paper, the value of which is being confiscated by the Fed/Government thru the process of massive dollar devaluation AND the massive transfer of your taxpayer wealth from the Treasury to the big banks.  To ignore this ongoing process is to suffer the consequences of my warning back in 2003. 

The ONLY way to protect yourself against this devaluation is to move your money into precious metals and perhaps some investments based on hard commodities, like oil, natural gas and agricultural products.  And for those of you who think the mad rush by the public to sell gold to these cash 4 gold schemes is a sign of the gold bubble topping out, who the hell do you think is on the other side of that trade?  Smart money and Central Banks.  To emphasize this point, I will conclude with another key quote from Mr. Thomson's article:

Ben Bernanke and the US Treasury are going to revalue gold against the dollar. The mechanism is the US dollar carry trade, not a confiscation of gold. Joe Public doesn't have any gold, he sold his 2 carat ring to the pawnshop months ago.

Got gold?  How about silver, which is even better?

Tuesday Morning Fun and a Misleading Inflation Report

This cartoon was sourced from Ed Steer's Gold & Silver Daily, which can be found here:  LINK, which is free and which I highly recommend to anyone interested in the precious metals market...

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Headline Inflation Number Is Misleading....

As for today's PPI report released by the Government, it showed a .3% increase, with all the media morons highlighting the -.6% "core" reading, which does not include food and energy (I guess the Government and the clowns on CNBC exist without eating, electricity and heat).   HOWEVER, both energy and food were up 1.6%.  The decline in the core reading was attributed to price declines in light trucks and cars (you can thank Obama for subsidizing the cost of those items).

How High Gold?

This is from tonight's Midas at http://www.lemetropolecafe.com/.  John Williams of http://www.shadowstats.com/ offers one benchmark with which to put a number on the price potential of gold:

John Williams of Shadowstats: $7,150 is the inflation-adjusted equivalent to gold's 1980 peak.  "If the methodologies of measuring inflation in 1980 had been kept intact, gold would have to hit $7,150 to be the equivalent of the 1980 record," Williams said.