Saturday, March 16, 2013

Eric Sprott – The Current Financial System Will End In Ruin

from KingWorldNews:
Today billionaire Eric Sprott told King World News that the current financial system will end in ruin. Sprott also stated, “It’s unfortunate for those of us in the precious metals sector that, in essence, we are fighting the Fed all of the time … but I have no doubt that we will win.” This is the first in a series of interviews with Sprott that will be released today which reveals, despite mainstream propaganda, the reality of the increasingly desperate situation Western central planners face. Below is what Sprott, who is Chairman of Sprott Asset Management, had to say.
Eric Sprott continues @ KingWorldNews.com
 
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Former US Treasury Official – US Financial System To Collapse


kingworldnews.com / March 16, 2013

Today a former Assistant Secretary of the US Treasury warned King World News, “This type of situation is extremely dangerous.  The world has never seen it before.”  Former Assistant of the US Treasury, Dr. Paul Craig Roberts, also told King World News that JP Morgan now threatens the stability of the entire global financial system.  And if the Fed loses control and we collapse, “Nothing and no one would be safe anywhere.”
Here is what Dr. Roberts had to say in the second and final part of this extraordinary interview:  “I can point out three giant bubbles that threaten the remains of the American economy … When these bubbles pop, the consequence is obvious:  The wipeout of the remaining wealth from bond and stock collapses, and a very strong domestic inflation from the rise in the import prices.”
Dr. Paul Craig Roberts continues…
“The United States is now an import dependent country.  It doesn’t produce its own manufactured products, clothes, shoes.  These import items dwarf the import of oil or energy.  So what is the potential for happening when these bubbles burst is widespread unemployment, and a rapid increase in inflation, before which the economic policy has no known solution.
… It is frightening, and it shows the extent to which the economic policy of the United States is misused in support of four or five big banks that are ‘too big to fail’ … We now have one bank, JP Morgan, which has derivative exposure equal to the (entire) world’s GDP….
READ MORE
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Not for Sale



 People all around the world are becoming increasingly dependent on a small number of large multinational businesses. Monsanto controls 90% of the production of genetically modified seeds. Microsoft holds an 88.26% market share of the software industry, followed by Apple with Mac who hold 9.93%. Everyday, 150 million people throughout the world, buy an Unilever product without even realising it. McDonalds, serve 58.1million meals a day around the world. 51 of the worlds 100 biggest economies are businesses. The state loses power at the same rate as businesses gains it. Globalisation has created a context which requires a redefinition of the rules for global 21st century society.

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Selloff in 30-Yr U.S. Treasury Pressures USD Upward, Bearish for Commodities

For this weeks edition of the SIA Equity Leaders Weekly, we are going to circle back on the CBOE 30 Year Interest Rate as it continues to show Yields on the rise. In addition we will take a look at the U.S. Dollar Index and see how it is doing in a rising long end of the curve, U.S. Interest Rate environment.
CBOE Interest Rate 30 Year (TYX.I)
The first chart we are going to tackle this week is the CBOE 30 Year Interest Rate. This is a chart we have been watching closely and have wrote about on many occasions recently as we continue to see upward movement in the yield.
Looking to the chart we can see that near term resistance is at hand after a brief pull back in February. The 3.272% level should not be considered as strong resistance as it comes on the heels of this pullback and a double top signal. The next major level of resistance come in the 3.508% range.
The recent movement and continued upward action continues to put pressure on investors on the long end of the U.S. Treasury curve. For those investors they should keep a close eye on these holdings and look to stronger relative strength fixed income products as alternatives.
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U.S. Dollar Continuous Contract (DX2.F)
We wrote only a couple of weeks ago on the U.S. Dollar Index. The chart has moved through resistance at the 82.34 level since then but more importantly has seen a change from a Negative SMAX of 4 to Positive SMAX of 6 out of 10. This relative outperformance falls in line with what we have seen above as the long end of the U.S. Treasury continues to sell off, increasing Yields. This is the opposite of what has happened since the early 2000′s when we saw yields decline and the U.S. Dollar fall.
Looking to the chart we can also see that the U.S. Dollar has been on a positive trend since January of 2012, reversing a 10 year downtrend. Since then we have seen a confirmation move in June of 2012 and if the 84.83 level is taken out this trend has room to move to the 90.05 range.
Again the importance of these two trends is they are likely to have a significant impact on the Commodity markets, and those investments that have prospered over the past decade.
Click on Image to Enlarge
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Housing Sales Plummet as Canada’s Hot Market Finally Cools

by Jennifer Kwan
Yahoo! Finance, Canada

Another round of data is driving home the fact that the country’s once-hot housing market has shifted into lower gear. The number of homes sold in Canada in February plummeted 15.8 per cent from the same period last year, the Canadian Real Estate Association said on Friday.
At the same time, the association cut its forecast and now predicts 441,500 sales of existing homes in 2013, down 2.9 per cent from last year’s level. But in 2014, CREA forecasts that national activity will rebound by 4.5 per cent to 461,200 units, reflecting a slow and steady grind higher in activity.
The data drives home the fact that Canada’s housing market is undergoing a soft patch, cooling especially since Ottawa implemented a fourth round of mortgage restrictions last summer to help consumers get a grip on soaring debt levels and calm down a frothy real estate market.
Continue Reading at Yahoo.com…
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Three strategies to profit from the rise in gasoline prices

U.S. oil independence is picking up steam. In December, the country lost its position as the world’s largest importer of oil, with shale production climbing faster than expected. Net imports fell below 6 million barrels per day, domestic production increased more than 1 million barrels per day and demand declined by about 700,000 barrels per day.
In the east, it’s a different picture, as Chinese crude imports reach record volumes. While the U.S. may nudge its way to the top position in the short term, it’s likely that China will “officially overtake the U.S. as the world’s biggest oil importer” in 2013, according to Citi Research.
Despite America’s energy renaissance, the price of a gallon of gas remains hinged on growing global demand and seasonal pricing trends. That’s why the recent bump in gas prices isn’t a cause for alarm, especially for resource investors.
Business Insider shared this chart from Deutsche Bank, showing retail gasoline price trends normalized to December 2012 prices. Going back 15 years, the price for a gallon of gas has historically risen during the first half of the year, and generally declined in the last half of each year. While this year’s increase of $0.53 per gallon seems alarming, the rise is a non-event when you compare it to the seasonality of oil and oil products.
Last January, we posted a seasonal chart showing a similar pattern, with returns of the S&P 500 Energy Index rising in February, March, April and May.
Best month lie ahead
Themes to Capitalize On
This time every year, the futures market builds in the rising price of oil with the assumption that refineries are getting ready for the summer driving season. Annual maintenance is scheduled, causing inventories to build. Also, the summer fuel is a different blend that is more expensive to produce.
While there’s not much a consumer can do to lower the price of gas at the corner station, investors can act today on the more significant emerging energy trends. Here are three ways Global Resources Fund (PSPFX) portfolio managers, Brian Hicks and Evan Smith, plan to seize the potential opportunities:
  1. Domestic Refiners:  Strong overseas demand, a weak U.S. dollar and a glut of oil from growing unconventional production in North America have driven U.S. exports of gasoline and distillates to record volumes, heralding in a new golden age in refining. 
  2. Petrochemicals:  A U.S. manufacturing renaissance combined with inexpensive natural gas feed-stocks unlocked from prolific North American shale plays have fueled profits of the U.S. chemical industry.
  3. Midstream:  With the rapid development of North American oil and gas shale basins such as the Marcellus in Pennsylvania, the Eagle Ford in Texas and the Bakken in North Dakota, infrastructure constraints are being alleviated with new investment in assets to gather, process and transport growing oil and gas volumes. We believe certain Master Limited Partnerships (MLPs) that have the right type of assets in the right geographic locations will allow investors to reap the benefits of the development of shale plays in the U.S. and Canada.
You can access these trends through select petrochemical or oil & gas MLPs, ETFs or stocks.
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Two Gold Charts

We have one simple question - does the following small drop (which we happen to have seen before) in Gold ETFs, which at least according to the mainstream media, has been responsible for the recent slide in the price of gold, appear to justify the absolute surge in gold futures and options short exposure as per the Commitment of Traders report, which for yet another week, saw the biggest net short positioning since 1999. And no, we are not really confused - as we said "according to the mainstream media"...





and the Bonus third chart - what happened the last time futures were so 'short'...


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