Oldtent Archives 2007 - 2008

gold will spike to 4000 to 5000.. silver to 100..

Total meltdown very quickly

 with all the financial chaos and gloom and doom around the world and failing currencies and the dollar down tonight.

 Guess what? Gold is down $8

 Sinclair said silver is an industrial metal.

 just keeps getting better

Bill,
Every year we read how South Africa’s gold production has gone down 10%. It is hard to get the big picture when only going back one year. Below are South Africa’s annual gold production numbers for 2000 thru 2008. For 2008 the production in the first 6 months was 109.16 tonnes from which the annual amount is estimated.

2000 428 tonnes
2001 394 tonnes
2002 397 tonnes
2003 373.1 tonnes
2004 342.7 tonnes
2005 297.3 tonnes
2006 275.1 tonnes
2007 254.7 tonnes
2008 218.3 tonnes (estimated)

Production has basically halved in the last 8 years. In 1970, South Africa produced 1000 tonnes of gold, its top year. Looks like the cartel has a big problem. At the same time central banks are slowing their sales, the world’s previous number 1 producer has declined faster and further than anyone imagined. Right now retail gold is unavailable because of the low price. With production declining like above, gold is not going to be available at any price. Regards,
-Bryant

Thanks, we love you guys too.

That article from my friend makes so much sense when explained like it was.

Best, MadMike

What I’m saying is that the rest of the world will go the same way as Iceland.  The collapse of the currency will only take a few days, not a few years.

The hyperinflation is baked in the cake now, but so subtly in the form of govt. guarantees of the banking systems, that very few people will see it coming. 

Ship Rates Plunge as Credit Freeze Strands Cargo, Demand Slumps

Oct. 15 (Bloomberg) — Commodity shipping rates plunged to the lowest in more than five years as a lack of trade finance left cargoes stranded and the global economic slowdown limited raw material demand.

Traders are finding it harder to get letters of credit that guarantee payments for goods, shipping executives said. Together with a slowdown in trade, that has contributed to this year’s 82 percent drop in shipping costs for grain, coal and other commodities. Rates are so low that Zodiac Maritime Agencies Ltd., the line managed by Israel’s billionaire Ofer family, announced today it may idle 20 of its largest ships.

”Letters of credit and the credit lines for trade currently are frozen,” Khalid Hashim, managing director of Precious Shipping Pcl, Thailand’s second-largest shipping company, said in Singapore yesterday. ”Nothing is moving because the trader doesn’t want to take the risk of putting cargo on the boat and finding that nobody can pay.”

……”Acquirers will find it harder to source funds and even if they can source funds, they’ll have to pay more,” said Steve Robinson, a senior investment manager with Alleron Investment Management in Sydney, which manages A$1.2 billion ($839 million). ”Given what’s happened with commodity markets, they may not find buyers prepared to pay a premium.”

Zodiac will instruct the captains of its capesize vessels, which typically carry iron ore and coal, to deliver their current cargoes and then weigh anchor, said two hedge fund managers who saw an e-mail from the company outlining the plan.

”There’s been a lot of credit problems with traders,” said Mikael Skov, interim chief executive officer at Danish shipping line D/S Torm A/S, said by mobile today, without being able to give a figure for how many cargoes had been delayed or canceled. ”It’s one more thing in a big negative melting pot for dry at the moment,” he said.

more

can i apply for dish washer at your mt get away

somebody’s got to do dishes

cheers

#

Bill H:

To all; it looks to me like the credit markets are voting with their capital and the Fed and Treasury are losing the election dismally. We had global rate cuts of 1/2% last week that came, went, and have been pretty much forgotten. Last week 30 year mortgage rates in the U.S. were 5.99%, today they are about 6.5%. So the Fed has cut rates yet mortgage rates have risen? This is LOSS OF CONTROL by the Fed.

LIBOR has barely moved to lower rates since the cuts, Freddie Mac had a disastrous auction yesterday and Treasury yields on the long end are moving hard to the upside while 30 day T-Bills are at nearly 0%.

I know I wrote about rates and Treasuries yesterday but watching this action is like being in the voting machine and seeing election results real time. The credit crunch started last July and now a year later we are witnessing a very “strange brew”. Money is piling in as short term as possible and fleeing the longer end while the appetite of the Treasury is huge and ever growing. Fannie and Freddie that are supposedly “backstopped” directly by the Treasury are showing remarkably high spreads, the market clearly has not taken the Treasury at their word. If you think the stock market has been a disaster, it can’t even hold a candle to the poor action in the credit markets.

Obviously over the last couple of weeks people have been scared to death and have that deer in the headlights look about them. This “pullback” or inactivity by the public will not help retail sales [reported down 1.2% today], nor the housing market. However, even if the public wanted to buy real estate they would have to pay 8% more this week than last because the mortgage rates have risen so much. In fact, it can be argued that real estate “dropped” by this same 8% since last week because those who are stupid or brave enough to want to step up to the plate will only qualify for .92 cents compared to last week based on income. These Treasury rates really bear watching from here on as they truly are the warning gauges to the world’s economic motor.

We have witnessed an extraordinary move into short term treasuries that has only occurred once before in U.S. history, the early 1930’s. This is akin to all the passengers running to the back of the Titanic as the stern rose up as the bow was submerging. Back in the 30’s piling into short term Treasuries was a logical response as Dollars were Gold backed and Treasuries were Dollar denominated. It made sense back then, however it is a death trap today because of the fundamental flaw in our currencies. Now we need to watch to see when short term rates start to rise since that will be a clue as to the timing of the total sinking of the system. Short term rates will start to rise and CNBC will blare into your living room that “the worst is over, just look at short term rates, the credit markets are THAWING”! HURRAY! In a sense they will be correct, the credit markets will “thaw” for maybe 24-48 hours because capital will begin to exit the short end and rates will rise. BUT, and this but is HUGE, this will be the beginning of capital fleeing the fiat system. The credit market will go from thaw to total meltdown virtually overnight. Once short term rates start to rise they will not stop for quite a while. Short rates will blow past Fed funds, the discount rate and all other “official rates”. This will be the beginning of the end for the U.S. Treasury as auctions will fail and the world will ration capital to the world’s worst abuser of credit. This will be a panic into anything and everything real.

A good primer for what is to come would be Argentina in 2002. The stock market cratered, interest rates went up drastically and the currency value imploded. When people actually figured out what was happening, they got out of all fixed income including the banks and then panicked back into the stock market. They primarily bought shares in companies that actually produced real goods and real products. This was the response to a crashing currency. In other words, get your money into something real. I think the short end of the Treasury market will be a huge clue as to when this action will begin. Regards, Bill H

when the market does its bear market rally.. …going up inflation coming down the pike

Don’t get me wrong I wish folks would take delivery

however it’s a pain in the butt (designed that way) to take delivery many would rather just cash out a contract and buy the physical from a local coin store…trust me…have you ever seen a 1,000 oz Comex bar…

” just cash out a contract and buy the physical from a local coin store”

” buy physical from the coin store”

BWWWWWAAAAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAH!!!!

……did you read that Post from Mad Mike ?

…hey now you are talking worthles currency..is that deflation ?

….dont think so !

…..do they have deflation in Iceland ?….I think their Kroner is a Goner !

…maybe they are just Thawing out a bit !

canadian politics

Canada voter turnout lowest on record…

http://www.theglobeandmail.com/servlet/story/RTGAM.20081015.r-banks-commodities16/BNStory/energy/home

“China has, as I describe it, paused for breath. So that gives us a chance to really test some of these capital expenditures and the costs of construction,” Tom Albanese, Rio Tinto’s chief executive officer, said in an interview from London.

Korean Won Declines Most Since 1997, Stocks Drop on S&P Warning

Oct. 16 (Bloomberg) — South Korea’s won slumped the most since the International Monetary Fund bailed the nation out in December 1997 and stocks fell, on concern turmoil in financial markets will make it difficult for banks to service debt.

The Korean currency slumped as much as 12 percent today, extending this year’s loss to 30 percent, Asia’s worst decline, as Standard & Poor’s said yesterday it may cut credit ratings for Kookmin Bank and six other Korean financial companies because of possible difficulties refinancing maturing debt.

”Risk aversion returned,” said Dariusz Kowalczyk, a strategist with CFC Seymour Ltd. in Hong Kong. ”It will be very difficult, if not impossible, for Korea to roll over its short- term debt.”

The won fell 7.7 percent to 1,341.5 against the dollar as of 9:27 a.m. in Seoul, according to Seoul Money Brokerage Services Ltd. It fell as low as 1,399.95. The Kospi stock index fell by as much as 6.9 percent to 1247.57.

South Korea’s foreign-exchange reserves dropped in each of the last six months, sliding $24.6 billion to $239.7 billion as policy makers intervened to stem the won’s slide. Central banks buy or sell overseas currencies to influence exchange rates.

The nation has been building up its currency reserves since the Asian financial crisis led to the won halving in value in 1997. The government secured a $57 billion loan from the International Monetary Fund at the time to help repay overseas debt.

South Korea plans to sell as much as $5 billion of global bonds next year to provide a benchmark yield for other Korean debt and increase its foreign-currency reserves, Yonhap News Agency reported

Proceeds from the global bonds will be part of 15 trillion won ($12 billion) in issuance next year for the stabilization of currency movements, the report said, citing an unidentified finance ministry official.

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