Oldtent Archives 2007 - 2008

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The economic calamity in Zimbabwe is hard to phantom, too big to imagine. 95% unemployment, 45 000 000 & inflation, it’s total ruination.

Harare –The magnitude of the economic calamity in Zimbabwe is hard to phantom. One way one can begin to understand the level of economic ruin that ZANU-PF has brought on the country is by looking at the annual rate of inflation.

Today, the Herald claimed the annual inflation rate was not at 11.2 million percent.

“Zimbabwe’s annual rate of inflation surged in June to 11.2 million percent,” The newspaper said, adding: “It gained 9,035,045.5 percentage points from the May rate of 2,233,713.4 percent.”

However everyone agrees that the government estimate is a fraction of the real figure.

“The actual figure could be high as 40 million percent in June,” said independent economist John Robertson.

“The actual figure for July could be as high as 300 million percent, while for August it could be 600 million percent,” he added.

The currency, once on a par with the British pound, is in freefall; unemployment is pegged at a staggering 95 percent; food and essential goods are in short supply and the vast majority of people go hungry every day.

In the face of such adversity, many have resorted to ingenious ways to ensure their next meal.

Mike Bvunzawabaya, a security guard at a large Harare supermarket, is able to buy a loaf of bread at the official price of eight Zimbabwe dollars, which he then resells for 120 dollars.

“At least I am not stealing from anyone,” he says, justifying the thriving sideline trade of 15 to 20 loaves he resells every day.

In one Zimbabwean village, people have turned to barter, exchanging a bar of soap for maize, and are cutting down on meals.

Villagers who once stashed savings from grain sales are now refusing to accept cash as they cannot afford bus fares to travel to shops and fear the money will be worthless before they arrive.

In cities, some doctors ask to be paid in cash rather than charging medical insurance schemes, saying the currency would be further devalued by the time they are reimbursed. Some schools are charging school fees in fuel coupons.

In Harare, a 29-year-old Air Zimbabwe worker did not go to work last week as she could not afford the transport costs to get there.

“It costs me more to go to work,” she said, adding that the number of travellers using the airline had dropped.

The UN World Food Programme (WFP) estimates that 83 percent of Zimbabweans are living on less than two US dollars a day and that 45 percent of the total population is malnourished.

Recently, the state-controlled Herald newspaper carried a story about a man who invested his retirement package in a fixed account 10 years ago. When he went to withdraw his savings, he was told the money was worth one cent after the country’s central bank knocked ten zeros off the Zimbabwe dollar.

Earlier this month, Zimbabwe’s central bank chief urged a six-month price and salary freeze in a bid to rein in runaway inflation, with the country in the midst of an economic meltdown.

“Zimbabweans must realise that the country is in a practically binding state of socio-economic emergency,” The Herald quoted Reserve Bank governor Gideon Gono as saying then.

“As such, there is need for a universal moratorium on all incomes and prices for a minimum period of six months,” said Gono.

The economic ruination by ZANU-PF and Mugabe is a text example of a total failure in a government in the history of the world. –Tribune Business News/Services

I’ll need a sharp mind to delineate what I’ve found and it’s way too late tonight for that…so give me about 24 hours.

Moggy

Tested as in basting the turkey?  I believe I have you beat by a few cents…bought BLRV @ $.92…it is now @ $.04.  But all is not lost as I hedged by buying bullion, sand, and scads of survival food…yet, it doesn’t sit well with me, to see what the thieves have done to everyone’s investments, which symbolize years of hard earned capital.

Moggy

SEC May Propose New Short-Sale Rules Within `Weeks,’ Cox Says
By Jesse Westbrook

Aug. 19 (Bloomberg) — U.S. Securities and Exchange Commission Chairman Christopher Cox said his agency will propose new rules aimed at curtailing manipulative short sales of stocks in the “next few weeks.”

“Our proposals will be designed to ensure the smooth functioning of markets and to support equally the important role of bets on the upside and the downside,” Cox told reporters in Washington today.

The SEC imposed a temporary measure last month that made it harder for traders to bet on declines in shares of Freddie Mac, Fannie Mae and 17 brokerages. The agency said the order was meant to prevent traders from driving down stocks considered at risk of manipulation after Bear Stearns Cos. and IndyMac Bancorp Inc. collapsed amid speculation they were faltering.

The measure, which expired Aug. 12, targeted so-called naked-short selling by requiring traders to actually arrange to borrow stock before executing a short sale. Prior to the SEC’s order, investors were only required to locate shares in advance.

“We are looking to see what were the consequences of doing that,” Cox said in a Bloomberg Television interview. The agency is also considering rules that would curtail short selling in all companies, not just a select few, he said.

To contact the reporter on this story: Jesse Westbrook in Washington at jwestbrook1@bloomberg.net.

MIDAS

Appendix

Hi Bill.. I am writing you because of a prompt of Jim Sinclair.. I met Jim in 1976 by chance and one I have had contact with over the years since. He asked me to send you my read on gold and inflation for 09. Background. Been a student of astrology since 1972. Applied it to markets starting in 1975. After 20 years research I started AstroEcon in 1996. Worked in investment banking in London from 2001 till 2007. Now I reside back in the hills of West Virginia in semi hunker down mode.

I have an esoteric point of view which is not for everyone. I combine western astrology quantum physics shamanism and Mayan time counts into my perspective.

My references include Irma Schogt who runs markettiming.nl .. A collection of the best astrofinance people in the biz.

Jim can confirm I wrote in my site and reported to him back in may 08 I thought August 08 was the low with 820 a price to start working with for long positions. My next lower target is about 725 if gold cannot hold here on the 8/15 low.

there was a lunar eclipse on 8/15.. This is a significant indication a good low is in now..

I will try to keep the astro jargon out of the below. Feel free to quote me on this. Also feel free to ask questions.

~~~~~~~~~~~~~~~

Gold and inflation in 2009

The wave of deflation we are in now is close to ending. With that will come a massive liquidity injection which will last well into mid 2009. There are astrological alignments in the first half of 2009 that clearly point to a bubble of some sort. I expect this to start in late November 08 and crest mid 2009. One would think in that kind of environment that gold would do very well.. 1500 is not an unreasonable target. in fact I see the 1999 naz and gold in 2008 making a low in a bull trend near an august eclipse so a gold double into January is not out of the question. Depends how fast the liquidity wave ahead is priced in.

Seriously negative interest rates should be seen in 1st half of 2009 as well.

We will see rationing some time in later 09 to control OFFICIAL prices (gas first) and those pesky COL increases in social security etc. Most likely the rationing will be subtle at first. A LOT LIKE the “rationing” of physical metals occurring now which is you cant buy much at the official price. Once started it will spread from one thing to another. By the time this is full bore it will be legislated to be “the best thing” so poor people can remain functional.

Electronic cashless money not far behind to contain the barter economy that will be inevitable.

Robert Hitt
www.astroecon.com

I’m with you. I have faith the real thing.

overtop of floridagolds post, e trade add etc

Thanks for your reply,  Much clearer than all the long winded stuff I have been reading.

…Margaret..you ask how Gold will do in a Deflation..

…If Deflation means Fiat Rules and everything costs less as Fiat Gets more valuable….ask your self…what would you rather have Paper Promises on Nothing..or tangable Physical Metal

….No matter what mixture of Rising and Falling Prices we get with respect to Fiat BS Funny Money….we will get Price Deflation In Real Money

….ie….Physical Gold and Silver will be traded for More things than Paper Promises…

….I guess what I’m saying is….If the Financial System .(which as you know is based on BS Paper Promises)… Implodes…Gold and Silver will buy more than the shrapnel left of the financial System..!

Deflationists are welcome to explain how Fiat will be Stronger than Metal after the paper BURNS Baby !

What a peculiar 24 hour trading period. I am still trying to figure it all out; however, what is most important is that gold put in an outside day key reversal to the upside and closed the downside gap from yesterday.

After the close yesterday, gold fell apart in the Access Market trading, an obvious Gold Cartel attack in the thinly traded market. Clearly their effort was to attract more desperate selling, so they could do some more covering. In addition, as we know all too well, they always bomb gold around a key US economic report … one which reveals inflation really is a serious problem in the US … which is just what we got this morning;

08:30 Jul PPI reported 1.2% vs. consensus 0.6%; ex-Food & Energy 0.7% vs. consensus 0.2%
Jun PPI unrevised from 1.8%; ex-Food & Energy unrevised from 0.2%.
* * * * *

Wholesale prices rising at fastest pace since 1981

Mexico Mike expressed what most of us who were watching the price action were going through at the time…

Hi Bill!
I guess my tin foil hat is on too tight this morning. I noticed that gold and silver were both under pressure in overseas trading last night, and were lower this morning. Then the inflation data hit the tape, and the markets reacted, with DOW futures plunging. How foolish of me! I actually thought we would see a rebound in the metals on this news. But wait… Gold and silver also plunged on this horrible inflation report. To all those who deny that manipulation is alive and well in markets, please wake up and smell the coffee. One must ask, what is it going to take to convince people that there is a massive effort underway behind the scenes to cap and control the precious metals?

We have been repeatedly told that inflation is under control, and that expectations are for lower inflation rates in future quarters. This latest report surely must begin to debunk that convenient myth. Gold is a go-to investment in times of inflationary pressure, and always has been. With the metal so severely oversold going into this session, and the related issues in the world that are gold friendly, the inflation data this morning should have triggered a monster surprise rally to the upside. The large number of spec shorts would have been squeezed and forced to cover. But alas, this is a rigged market and such events are not allowed to unfold.

All I would like to see is for some of the more informed and neutral market commentators to step up to the plate and denounce what is clear for all to see. Why is there such a complete acceptance that the market has been corrupted and that clueless investors are being led around by the nose? People have put their reputations on the line to expose widespread corruption of far less significance than what is unfolding on a daily basis in our markets. Yet for all the evidence that continues to build, we can just sit back and listen to the crickets chirp.
Cheers!
MexicoMike

I’m in the inflation camp myself.  I think ole Ben will print and distribute as many excessive dollars as he thinks will be needed to combat deflation but…. you have pulled a post from six months ago…. and a guy has a right to change his mind.  So…Rambus has changed his mind well what’s wrong with that?

What planet are you on if you don’t think this is a big deal?  The AA and A spreads have blown out by 150 basis points over the weekend!

Something is blowing up.

Actually, that’s a lie.  A lot of things are blowing up in the credit world.  In fact, its easier to list the things that aren’t blowing up instead of the ones that are.

The ones that aren’t blowing up (thus far) are:

• Treasuries

That’s it.  A list with one item in it.

Most everything else is either at historical wides or is very close to it.

That’s bad.

http://market-ticker.denninger.net/