Archive for May 2009
by Roger Wiegand
Editor of Trader Tracks Newsletter Posted May 28 2009
Welcome to the New Banana Republic of the United States of America and Black Markets.
WE WOULD NOT, under any circumstances, believe our government would make decisions flying in the face of sacred United States contract law. What they have done to auto company bondholders is to favor unions for political votes forcing bondholders into a lower, non-preferred payment order. This says corporate contracts in the United States are now meaningless.Auto union people were moved to the head of the bankruptcy line while bondholders with a preferred first lien position by CONTRACT LAW, are now forced to the end of the line.
If your government will do this to auto bondholders, what will they do to the Sheeple?
News this morning told of GM bondholders finally reaching a settlement providing $0.17 on the dollar in two parts as GM shares trading was halted. Further news stated GM shareholders are receiving 1% of the deal. Watch for a following clarification as to what all this might mean.
In our view it’s all just grave dancing…
We expect Chrysler for sure and GM being a strong maybe, to enter their final resting places in the automobile manufacturing graveyard. For these companies to survive, they have to build and sell cars. We project years of falling vehicle sales with more lean years afterward. We think they have zero chance to continue in business in the longer view. Ford has a long shot chance to survive IF they can downsize the company another 35-50%. We would suggest their chances are one in three to get through it all and expect their bankruptcy as well. If Ford makes it, Chapter 11 comes first.
by Roger Wiegand
Posted http://www.kitco.com May 22 2009
OUR 2003 FORECAST SAID Ford Motor Company would go bankrupt. We hold to this forecast but its obvious GM and Chrysler beat them to it. Also per our predictions, GM has announced they might leave Detroit probably citing affordability of their monster headquarters building. The real reasons are to exit the USA’s failed auto market, and dump all health care and pensions on the US taxpayers. We think they will move to Germany using Opel as the new GM base for a corporate headquarters and European operations. Buick stays in China and very few US plants and facilities remain. The US car market is dead for a decade. And, the United States as a world class manufacturer is down the drain. The steady off-shoring of American manufacturing for cheap labor has gutted the US’s ability to provide for itself in many key markets. We think this comes back to haunt.
“General Motors is considering moving its headquarters from Detroit, selling-off U.S. plants and even renegotiating parts of its restructuring plan with its major union, the new chief executive said Monday. A move by GM to leave Detroit would represent another blow for the economy of a region already reeling from the bankruptcy of Chrysler and a sharp downturn in auto manufacturing. GM purchased its glass-towered headquarters building known as Detroit’s Renaissance Center in 1996 for $625 million. GM’s current restructuring plan, which is supported by the U.S. autos task force is headed by former investment banker Steve Rattner, would cut about 21,000 more U.S. factory jobs.”- Reuters & CNBC
US autos are literally crashing as Chrysler buyers stay away in droves due to the company’s bankruptcy, lack of dealer credit and no confidence in the job market. Would you buy a car from a manufacturer in bankruptcy owned and operated by the UAW and U.S. Government?
by Trace Mayer, J.D.
Posted originally February 1, 2008
A KONDRATIEFF WINTER is the correction of a credit expansion. During an inflationary credit expansion capital moves up the pyramid. During the deflationary credit contraction, or Kondratieff Winter, capital burrows down the pyramid to safety. This is why stock markets have been crashing as investors flee into T-Bills. Ultimately, investors ensconce themselves within a deflationary but invincible and immoveable golden forcefield.
Legendary investor George Soros recently said in Davos, Switzerland, “The current crisis is not only the bust that follows the housing boom, it’s basically the end of a 60-year period of continuing credit expansion based on the dollar as the reserve currency. Now the rest of the world is increasingly unwilling to accumulate dollars. I think we do have to rescue markets, otherwise we would go into a depression like we did in the 1930s.”
by James Howard Kunstler
posted in The Daily Reckoning 19 May 2009
EUPHORIA MANAGED to out-run swine flu a few weeks ago, as the epidemic- du-jour, with “consumer” confidence jumping and the big bank stocks nudging up. The H1N1 virus fizzled for now, at least in terms of kill ratio, though we’re warned it might boomerang in the fall with a vengeance. No one was surprised to see Chrysler roll over like a possum on a county highway, but the memory of their muscle cars will linger on like a California surfing song. Here in the northeast, where Sundays are not spent at the NASCAR oval, the spring foliage reached the tenderly explosive stage and it was hard to feel bad about anything.
For now, the “bottom” is in – that is, the bottom of this society’s ability to process reality. It may continue for a month or so, but events are underway that are beyond the command of personalities. We’re done “doing business” in all the ways that we’ve been used to, but we just can’t get with the new program. Let’s count the ways:
By David C. Harper
Numismatic News April 30, 2009
THE U.S. MINT isn’t about to tell its workers in Philadelphia and Denver to take a six-month vacation, but it could be, judging from the coin demand target it is aiming for in 2009.
The Federal Reserve System has placed orders for just 3 billion coins in 2009, down over 70 percent from the 2008 production level of 10.1 billion. With approximately 1.2 billion coins struck already in the first three months of the year, that leaves eight months into which to divide production of just 1.8 billion coins. In the year 2000 the Mint was striking more than that per month.
The Mint says it will build a coin inventory, but unless the Treasury plans to stockpile the current commemorative Lincoln cents as it once did Morgan silver dollars, with its current business approach it is hard to envisage the Mint going too far beyond projected coin needs.
by Matt Kjeldsen
Posted May 8, 2009 www.opednews.com
MYTHS PREVENT PEOPLE, especially Americans, from discerning and even reaching for the truth. Myths are created by and used by the elite power structure to control the masses. It works because these myths create a sense of power in the individual through his/her connection to the group, even though in reality, this faith-based belief in the myth actually neuters any power the individual once possessed. Let’s look at the two biggest and most powerful myths used to control Americans.
Myth number one — we are a democracy
First of all, America is a constitutional republic, not a democracy. This is a lie constantly repeated by the people who benefit (politicians and press – and those who own them). The reason this myth is so controlling and destructive to America, is that a two-headed monster dictates all policy and all debate. Two teams continually battle for control of the system and every citizen, whether they vote or not, is drawn into the false divide and sides with one or the other of the teams. When one team has worn out its welcome, the voters replace it with the other team.
By David Morgan
Posted 8 May, 2009 http://dollardaze.org/blog
JOHN EXTER was an internationally known banker and a gold bug in the true sense of the word. He graduated from Harvard and was present when Keynesian economics first came to the fore. He lived through World War I, witnessed the founding of the Federal Reserve, the Great Depression, and the establishment of the International Monetary Fund (IMF). He also presided over the New York Federal Reserve Bank. Mr. Exter’s work can be found on the Internet with a simple Google search.
One of his most famous quotes is, “The U.S. and world economies are on the threshold of a deflationary crash that will make the 1930s look like a boom. Gold will be the single best investment to own. Buy it now while it’s still cheap.”
A pyramid is one of the most stable structures ever envisioned by humans. However, Mr. Exter is perhaps most famous for his inverted pyramid of how a debt-based monetary system is constructed.
Logically, an upside down pyramid implies one of the most “unstable” structures one can imagine.