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EXTEND & PRETEND
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Complete Legend to the Right, Top Items below.
Articles with
highlights, graphics and any pertinent analysis found below.
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COMMENTARY for all articles by
Gordon T Long
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CURRENCY WARS: Debase, Default, Deny!
 In
September 2008 the US came to a fork in the road. The Public Policy
decision to not seize the banks, to not place them in bankruptcy court
with the government acting as the Debtor-in-Possession (DIP), to not split
them up by selling off the assets to successful and solvent entities, set
the world on the path to global currency wars.
By lowering interest rates and effectively guaranteeing a weak dollar, the
US ignited an almost riskless global US$ Carry Trade and triggered an
uncontrolled Currency War with the mercantilist, export driven Asian
economies. We are now debasing the US dollar with reckless spending and
money printing with the policies of Quantitative Easing (QE) I and the
expectations of QE II. Both are nothing more than effectively defaulting
on our obligations to sound money policy and a “strong US$”. Meanwhile
with a straight face we deny that this is our intention.
Though prior to the 2008 financial crisis our largest banks had become
casino like speculators with public money lacking in fiduciary
responsibility, our elected officials bailed them out. Our leadership
placed America and the world unknowingly (knowingly?) on a preordained
destructive path because it was politically expedient and the easiest way
out of a difficult predicament. By kicking the can down the road our
political leadership, like the banks, avoided their fiduciary
responsibility. Similar to a parent wanting to be liked and a friend to
their children they avoided the difficult discipline that is required at
certain critical moments in life. The discipline to make America swallow a
needed pill. The discipline to ask Americans to accept a period of intense
adjustment. A period that by now would be starting to show signs of
success versus the abyss we now find ourselves staring into. A future
that is now massively worse and with potentially fatal pain still to come.
READ MORE |
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CURRENCY WARS: Misguided Economic Policy
 The
critical issues in America stem from minimally a blatantly ineffective
public policy, but overridingly a failed and destructive Economic
Policy. These policy errors are directly responsible for the opening
salvos of the Currency War clouds now looming overhead.
Don’t be fooled for a minute. The issue of Yuan devaluation is a political
distraction from the real issue – a failure
of US policy leadership. In my
opinion the US Fiscal and Monetary policies are misguided. They are wrong!
I wrote a 66 page thesis paper entitled “Extend
& Pretend” in the fall of 2009 detailing why the proposed Keynesian
policy direction was flawed and why it would fail. I additionally authored
a
full series of articles from January through August in a broadly
published series entitled “Extend & Pretend” detailing the predicted
failures as they unfolded. Don’t let anyone tell you that what has
happened was not fully predictable!
Now after the charade of Extend & Pretend has run out of momentum and more
money printing is again required through Quantitative Easing (we predicted
QE II was inevitable in
March), the responsible US politicos have cleverly ignited the markets
with QE II money printing euphoria in the run-up to the mid-term
elections. Craftily they are taking political camouflage behind an
“undervalued Yuan” as the culprit for US problems. Remember, patriotism is
the last bastion of scoundres
READ MORE
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READER ROADMAP
- 2010 TIPPING POINTS aid to
positioning COMMENTARY
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1
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1-SOVEREIGN DEBT |
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2-EU BANKING CRISIS |
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3-BOND BUBBLE |
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4-STATE &
LOCAL GOVERNMENT |
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5-CENTRAL & EASTERN EUROPE |
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6-BANKING CRISIS II |
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7-RISK REVERSAL |
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8-COMMERCIAL REAL ESTATE |
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9-RESIDENTIAL REAL ESTATE -
PHASE II |
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10-EXPIRATION FINANCIAL
CRISIS PROGRAM |
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11-PENSION CRISIS |
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12-CHRONIC
UNEMPLOYMENT |
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13-GOVERNMENT BACKSTOP
INSUR. |
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14-CORPORATE
BANKRUPTCY |
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TODAY'S TIPPING POINTS UPDATE |
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RED ALERT |
AMBER ALERT |
ACTIVITY |
MONITOR |
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Click to Enlarge
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12-13-10
GEO-POLITICAL TENSIONS - ISRAEL / KOREA / IRAN
IRAN
ISREAL
KOREA
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North Korea Threatens S. Korea With Nuclear War Newsmax
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North Korea warned Monday that U.S.-South Korean
cooperation could bring a nuclear war to the region, as
the South began artillery drills amid lingering tension
nearly three weeks after the North's deadly shelling of a
South Korean island.
The South's naval live-fire drills are scheduled to run
Monday through Friday at 27 sites. The regularly scheduled
exercises are getting special attention following a North
Korean artillery attack on front-line Yeonpyeong Island
that killed two South Korean marines and two civilians.
The Nov. 23 artillery barrage, the North's first
assault to target a civilian area since the end of the
1950-53 Korean War, began after the North said South Korea
first fired artillery toward its territorial waters. South
Korea says it fired shells southward, not toward North
Korea, as part of routine exercises.
North Korea, however, lashed out at Seoul, accusing
South Korea of collaborating with the United States and
Japan to ratchet up pressure on Pyongyang.
That cooperation "is nothing but treachery escalating
the tension between the North and the South and bringing
the dark clouds of a nuclear war to hang over the Korean
peninsula," Pyongyang's main Rodong Sinmun newspaper said
in a commentary carried by the North's official Korean
Central News Agency.
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Ex-U.S. Intel Chief Foresees S. Korea Military Action
Newsmax
The former US intelligence chief warns that South
Korea has lost its patience with North Korean provocations
and "will be taking military action."
Retired Adm.
Dennis Blair, who was national intelligence director until
May, said he did not think that hostilities would escalate
into a larger war with artillery attacks on Seoul because
North Korea knows it would lose.
"So I don't think
a war is going to start but I think there is going to be a
military confrontation at lower levels rather than simply
accepting these, this North Korean aggression, and going
and negotiating," he said on CNN's "State of the Union." |
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1-
SOVEREIGN DEBT & CREDIT CRISIS |
Investors bailed out of bonds in November, mostly municipals
USAT
SocGen- Actually, The US Government Isn't Issuing Enough Debt BI
Market alarm as US fails to control biggest debt in history
Telegraph
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4- STATE
& LOCAL GOVERNMENT |
Emptying the pork barrel would hit some states especially hard
Stateline
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5-
CENTRAL & EASTERN EUROPE |
A
Secretive Banking Elite Rules Trading in Derivatives
NYT
Volcker: Worried about mega-bank failure rules MW
Stiglitz Says Fed Stimulus Poses `Considerable' Risks for Emerging Markets
BL
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8-
COMMERCIAL REAL ESTATE |
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9-RESIDENTIAL REAL ESTATE - PHASE II |
Is Now The Time To Call The Bottom On The Worst Housing Market In America?
BI
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The worst
housing market in America is Las Vegas, which has continued to
plummet in recent readings, with little sign of letting up.
But eventually it will hit bottom, and that could be right now.
Two things to consider:
First, gaming revenues are clearly rebounding.
Nevada gaming revenues grew an impressive 11% in October, the
third straight monthly increase. On the strip, revenue rebounded
by an even more
impressive 16%.
Second, this chart which we ran last month
shows a pretty nice correlation between hospitality jobs and
Nevada
home prices (as measured by the Case-Shiller). Now
Case-Shiller is pretty laggy, but it's clear that hospitality jobs
have troughed, and looked to be starting a rebound. Combine that
with the comeback in gaming revenues, and it's easy to imagine an
actual bottom in Las Vegas real estate.
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10- EXPIRATION FINANCIAL CRISIS PROGRAM
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11- PENSION & ENTITLEMENTS CRISIS
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The Deluge Of 99ers Begins... Now Calculated Risk
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Regardless of what happens with the tax deal,
there's no more support for the so-called
99ers, people who have been on unemployment for the maximum
length allowable: 99 weeks. And their numbers are about to
swell.
As this chart from
Calculated Risk shows nicely, we're about 99 weeks since the
very worst of the
job losses from late-2008/early-2009. The extent to which
their cutoff slams the consumer recovery (and thus everything
else) is a huge issue to consider
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13- GOVERNMENT BACKSTOP INSURANCE |
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14- CORPORATE BANKRUPTCIES |
China's Inflation Tops 5%, Adding Pressure for Wen to Raise Interest Rates
BL
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19- PUBLIC POLICY MISCUES |
Washington Orders Another Free Lunch
Schiff
The Economic Sweet Spot of Presidential Terms
NYT (Norris)
Kicking the can down the road
Economist
Why Democrats
Should Disregard Bill Clinton's Endorsement of Obama's Tax Deal
Reich
OTHER TIPPING POINT CATEGORIES NOT LISTED ABOVE
24-RETAIL SALES
26-GLOBAL OUTPUT GAP
31-FOOD PRICE PRESSURES
32-US STOCK
MARKET VALUATIONS
GENERAL INTEREST
Unintended
Consequences
Mauldin
The
Nerve to Say No
NYT (Morgenson) FLASH CRASH - HFT - DARK POOLS
MARKET WARNINGS
Is Sentiment Flashing A Major Warning Signal Pragmatic
Capitalist
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“The
Investors Intelligence Advisors Sentiment Survey bull-bear
spread is once again moving towards the +40% danger zone. When the
spread last broke above 40%, in October 2007, the market collapsed
spectacularly.
In our most recent survey (see above), at the
end of November, the bulls minus bears ratio maintained its
uptrend off its September low and read +33.6%. Readings
going into the start of the New Year are worth
paying attention to, as a move into the forties would be a
strong call for defensive measures.”
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CURRENCY WARS
MARKET &
GOLD MANIPULATION
The central banks don't consider it manipulation, they consider it part of
their job Chaos Theorien
if the currency wars escalate and if we have a sequential
collapse of paper currency, there may come a time - we're not
there, yet – but there may come a time in the future, when the
dollar is collapsing, and in that case we will need to re-start a
new currency backed by gold, which would be acceptable in world
trade. And if that happens, it would make sense for the United
States to commandeer not just the German gold, but all foreign
gold in the United States, basically move it to a different
location.
Right now it is at the Federal Reserve Bank of
New York, which is an independent agency. So it would be good for
the United States to in fact commandeer the gold and move it
exclusive U.S. government control, away from the Fed, probably at
West Point, because we have a good large gold vault there and good
security. And at that point, the United States could launch a new
version of dollar backed by gold and work with the Europeans, the
Japanese and others to make this the new global currency that
would be acceptable in world trade. In conversion of the gold we
would give the Europeans some kind of treasury certificate in
exchange for their gold. |
Gold
Stocks Still Cheap 2
ZEAL
The
case against gold
G&M
AUDIO / VIDEO
QUOTE OF THE WEEK
"Gold as money is incompatible with
unlimited majority rule and scoffs at the idea that money is just
'credit'. It negates any rationale, however farfetched, for the
existence of central banks. It precludes 'fractional reserve
banking' or any other method of debasing its utility as a medium
of exchange. Last and most important, it SEVERELY curbs the power
of government to interfere in the lives of its citizens. No
assembly of national “leaders” brought together to “modernize” a
financial system will ever agree to its use as money. But let one
nation anywhere implement it, and the lid blows off."
William A Buckler
Publisher:
The
Privateer
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Gordon T Long is not a registered advisor and
does not give investment advice. His comments are an expression of opinion
only and should not be construed in any manner whatsoever as
recommendations to buy or sell a stock, option, future, bond, commodity or
any other financial instrument at any time. While he believes his
statements to be true, they always depend on the reliability of his own
credible sources. Of course, he recommends that you consult with a
qualified investment advisor, one licensed by appropriate regulatory
agencies in your legal jurisdiction, before making any investment
decisions, and barring that, we encourage you confirm the facts on your
own before making important investment commitments.ont>
© Copyright 2010 Gordon T Long. The information
herein was obtained from sources which Mr. Long believes reliable, but he
does not guarantee its accuracy. None of the information, advertisements,
website links, or any opinions expressed constitutes a solicitation of the
purchase or sale of any securities or commodities. Please note that Mr.
Long may already have invested or may from time to time invest in
securities that are recommended or otherwise covered on this website. Mr.
Long does not intend to disclose the extent of any current holdings or
future transactions with respect to any particular security. You should
consider this possibility before investing in any security based upon
statements and information contained in any report, post, comment or
recommendation you receive from him.
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TIPPING POINTS |
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1-SOVEREIGN DEBT &
CREDIT CRISIS |
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2-EU BANKING CRISIS |
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3-BOND BUBBLE |
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4-STATE & LOCAL
GOVERNMENT |
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5-CENTRAL & EASTERN EUROPE |
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6-BANKING CRISIS II |
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7-RISK REVERSAL |
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8-COMMERCIAL REAL ESTATE |
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9-RESIDENTIAL REAL ESTATE -
PHASE II |
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10-EXPIRATION FINANCIAL
CRISIS PROGRAM |
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11-PENSION CRISIS |
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12-CHRONIC
UNEMPLOYMENT |
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13-GOVERNMENT BACKSTOP
INSUR. |
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14-CORPORATE
BANKRUPTCY |
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15-CREDIT CONTRACTION II |
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16-US FISCAL IMBALANCES |
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17-CHINA BUBBLE |
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18-INTEREST PAYMENTS |
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19-US PUBLIC POLICY MISCUES |
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20-JAPAN DEBT DEFLATION SPIRAL |
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21-US RESERVE CURRENCY. |
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22-SHRINKING REVENUE GROWTH RATE |
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23-FINANCE & INSURANCE WRITE-DOWNS |
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24-RETAIL SALES |
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25-US DOLLAR WEAKNESS |
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26-GLOBAL OUTPUT GAP |
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27-CONFIDENCE - SOCIAL UNREST |
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28-ENTITLEMENT CRISIS |
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29-IRAN NUCLEAR THREAT |
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30-OIL PRICE PRESSURES |
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31-FOOD PRICE PRESSURES |
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32-US STOCK MARKET VALUATIONS |
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33-PANDEMIC |
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34-S$ RESERVE CURRENCY |
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35-TERRORIST EVENT |
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36-NATURAL DISASTER |
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