18 Banks Inch Closer to the Precipice

bank-cracked_120x85Standard & Poor’s downgraded the creditworthiness of 22 18 banks [link] including:
Wells Fargo “AA-,
US Bank “A-,
Fifth Third Bank “BBB[what the ratings mean]

“We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions,” said Standard & Poor’s credit analyst Rodrigo Quintanilla.

Oh, this is getting interesting! The Street, Jim Cramer’s former company, offers free online bank ratings. I’ve checked ’em for years now.

Well, for 15+ years I had banked with Wells Fargo. There the nation’s second-largest bank by market cap, in deposits, home mortgage servicing, and debit card. I left them in 2006 when I discovered their outrageous exposure to derivatives. [Is Your Bank a Casino?]

I warned about WF (and others in the spring in 5 Banks Are “Dead Men Walking”.

Well, look where Wells Fargo is today:

Wells Fargo D+

Full report is here.

Anyone taking bets on how long they’ll last? I put my money on them being dead/sold off by Nov 26, 2009.

And if you bank with them don’t worry, the FDIC insures your deposits up to 250,000 per account owner.*

*The FDIC may take up to 99 years to return your money. [link] They (not you) will decide the payout schedule based on what they perceive as your need. And, only 1/4 of 1% of your deposit is actually backed with payout reserves. [link]

“During Times of Crisis, How Can I Help?”

Swami Kriyananda answers this question and talks about the HUGE coming changes in the video below.

mystic harpTo those who don’t know him (or know of him) he’s just “a nice, kindly man with a gentle sense of humor.” Well, I’ve kept tabs on Swami Kriyananda (aka J. Donald Walters) since 1993 and offer my personal testament to his devotion to God, and helping others through Him. He is a man of tremendous energy and deep insight, as well as my inspiration for creating this site and giving away my silver.

He’s founded half a dozen spiritual communities in three countries, published 90+ books, and composed over 400 pieces of music (including the best-selling “Mystic Harp” recorded by Derek Bell of The Chieftains). And yet, this dear man has no discernable ego. He is a friend to all, wanting nothing from anyone.

I mention this in hopes you won’t dismiss what he says as the ravings of a crackpot (uh, I own that distinction on this site!).

More thoughts about the coming changes from Swami:
Warnings & Advice from a Saint, Part 1
Warnings & Advice from a Saint, Part 2
Warnings & Advice from a Saint, Part 3
Warnings & Advice from a Saint, Part 4
Warnings & Advice from a Saint, Part 5

The 3 Stages of the Coming Silver Shortage

 Ted Butler’s friend and mentor Izzy takes the soapbox on “The 3 Stages of the Coming Silver Shortage”. 

Editor’s note: Izzy’s article was originally published a few years back, when silver was at $9+/oz and before the recent run-up in silver to $16. True then, moreso today. Consider this: we have already experienced Izzy’s STAGE ONE scenario (last year), get ready for STAGE TWO.

PHYSICAL SILVER YES, SPECULATION NO
By Israel Friedman

(This very bullish opinion was written by silver enthusiast Israel Friedman, age 73, a friend and mentor to Theodore Butler. Mr. Friedman has owned and studied silver for 30 years.)

I hope that the sell-off in the metals made you think about the way you perceive gold and silver as investments. This wasn’t just a correction, this was a slaughter by the paper short sharks who call themselves commercials.

Yes, COMEX Is Rigged
gold vs silver bars_100x108Mr. Butler wrote to the authorities in detail and asked why these so-called commercials can break the law. But up to now, he has not received any answers. I am in the camp that believes you can’t change the paper market to be honest. But that doesn’t mean you can’t do anything about it, because you can.

To those people who speculate in the paper market, I say you’d be better off giving your money to charity than give it to the paper sharks.

This sell-off brings two conclusions. One, that gold and silver don’t have monetary value, because money value doesn’t change so much in value in such a short period of time. Gold and silver aren’t insurance for anything, not for inflation, not for a collapsing dollar and they are simply controlled metals. Two, the naked short sellers aren’t afraid of anybody. The users are also controlled by the commercials and aren’t buying at dumping prices. They will regret not buying at the low prices, as they need silver to live.

So, the conclusion is that paper trading is dictating the prices, and if you think for one moment that they will not take your money when you trade paper, forget it.

Should You Buy Precious Metals?
Not to lose your investment money and participate in the future bull market in silver is the most important thing, and you have to choose the right course to achieve that. What kind of decision do you have to make to buy metals? You have to ask yourself some questions.

One, will any of the metals be in short supply?

Two, if I invest money can I make a minimum of 5 times my investment?

Three, can I hold for the long term?

Lastly, do I have extra cash to buy with?

gold vs silver v2_100x125If you can answer yes on all four questions, in my opinion you can buy. After you answer yes, the question then becomes should you buy gold or silver? I am a silver sympathizer, and in my opinion, only in silver can you have a shortage situation.

Gold no.

Only a shortage in physicals can bring high prices and defeat the paper market and force the naked short sellers into bankruptcy.

Price Points and the Coming Silver Squeeze
To define what I mean by shortage in silver, I say categorically that I’m not interested in the level of world inventories of silver, COMEX inventories and the guru’s stories. I am only interested to know if the users are receiving their shipments of silver on time. When a delay of silver shipments occurs, and affects most the users, I will consider this as a shortage.

Let’s see the stages of a shortage. 
1) Pre-shortage – the users will have to wait 3 to 6 weeks extra for shipments. Then the prices can rise to $20-30/oz.
2) Shortage – the users will wait an extra 6 weeks to 4 months for silver. Then the prices can rise above the old all-time highs of $50/oz.
3) Super shortage – the users have to wait more than 4 months for their silver shipments. The price will range from $100 to prices you won’t believe.

If this last scenario occurs, and gold has plenty of supply, the price of silver, at a minimum, will equal the price of gold. And my crystal ball tells me that silver can exceed the price of gold by a great deal.

You should be asking, how did I calculate the prices for the different stages?

silver 1000oz Comex Bar Stack_100x128My calculation is very conservative. I only take into consideration the future deficits between the producers and users, which is running currently at around 50 million ounces annually. I also take into consideration that private investors have 400 million ounces in bullion and coins that they will sell in some stages.

-In stage one, pre-shortage, I think investors will be willing to sell 50 million ounces at a price between $20 to $30.
-Stage two, shortage, investors will sell 200 million ounces between $30 and $100.
-And the remaining 150 million ounces will be sold in stage three, super shortage and the prices will be truly shocking.

These prices are very conservative, in my opinion, because they don’t take into consideration the naked shorts, new investments, or those banks worldwide that sold silver certificates without real silver backing, only derivatives backing.

Commercial Silver Users (Manufacturers)
The users will be the key for the future price of silver. No user wants to stop production, and will pay any price for silver if that means staying in business. For you the investor, who wants to know when stage one will start, my answer is simple – not me or anyone will know in advance when it will start. No one will ring a bell.

In my opinion, all of these stages will happen in silver, and super stage three will take years to develop. I ask you, do you believe that, when stage three comes, you will benefit if you hold a paper-leveraged contract? The Exchange will change the rules; including changing margins, and maybe by canceling the delivery process, and you will be left with a paper only contract.

The conclusion is, if you believe in a shortage situation, you will be secure only if you buy physical.

The Best Kind of Silver to Own for Stage 3
The only question is what to buy? Because I believe that at some point we will arrive at stage three, super shortage, when prices will be over the old all-time highs and will fluctuate by dollars per day, no investor will have the money to buy 100 or 1000 ounce bars.

coin-silver-eagle-wht-back_70x70For the small to medium investor, I say buy U.S. Silver Eagles.

And for rich investors buy Eagles and bars. I like Eagles because I think, at some point, the Mint will stop minting them and they will develop a numismatic and scarcity premium. Plus, in my opinion, they are the most beautiful coins in the world, and when I hold one they make me feel good about America.

Dance to the Bank
If my vision comes true, and we arrive at the super shortage stage, the Congress will ask a lot people hard questions, and the questions will be how we came to this situation. And Mr. Butler’s past complaints will be checked.

Physical investment is the safest way to riches, in my opinion. When the naked shorts go to bankruptcy courts, including the big sharks, you will dance to the bank.

Remember, do your homework before you invest. Cover all the angles, but don’t speculate, only invest in physical silver with free cash money. And take in consideration you can buy silver 30% cheaper than a month ago. And this is a fantastic, fantastic, fantastic opportunity.

Good luck and remember the modern gold is silver.
Israel Friedman

 

June 2009. We’re already through Stage One. See also:
Scared By Silver? (or should it read, “Scared? Buy Silver”)
US Precious Metal Coin Shortage Continues
No Gold, No Silver
Butler: “Silver Blowback”
APMEX Explains Shortage/Outage

June 2009

bank-rate_up_or_down_70x55Second-Largest U. S. Bank Downgraded & In Trouble
You heard it here first, 18 months ago, when I warned about this bank and told you why I closed all my accounts with them. Standard & Poor’s has downgraded them and 17 other banks. But the big surprise was the “D+” independant bank rating, down from a “C” just a year ago. 18 Banks Inch Closer to the Precipice

Swami in Assisi_70x73During Times of World Crisis How Can I Stay Positive?
Sure things are bad. Sure they’re about to get much worse. Yes, as Swami says, the middle class will be destroyed and there will be international warfare. “The world will give you less and less to be grateful for.” But what can YOU do NOW, for yourself and for others? “During Times of Crisis, How Can I Help?” 

gold vs silver bars_70x76Izzy’s Silver Shortage: Are We in Stage Two?
In 2006 Izzy Friedman predicted we’d see 3 stages in the epic silver shortage. We’ve gone through Stage One (March 2008-May 2009) where we saw the silver price premium explode while silver delivery delays stretched into months. What’s on tap for the upcoming Stage Two? The 3 Stages of the Coming Silver Shortage

Jim SinclairWill Increased Delivery Demand Bust the Gold Warehouses?
Jim Sinclair: “I have been speaking with many people this evening who have taken gold delivery. What I am hearing is not impressive. When examined closely it is a paper system that may have fallen badly behind as gold moved ahead since 2001. There is a possibility the system is antiquated and more FUBAR than anyone, even the warehouses themselves, realize.” COMEX Warehouses in Trouble?

Jim SinclairWill the Manipulation of Gold & Silver Prices Ever End?
Gold and silver price suppression has been going on for years now, as documented by GATA and Ted Butler. Who’s behind it? Evidence points to JPMorgan Chase using massive (and illegal) short-selling on COMEX, at the bidding of the president’s Plunge Protection Team. Now, Jim Sinclair answers the question on everyone’s mind: Will the COMEX Manipulation Ever End?

70x70 atomicOctober 2009 Shaping Up Worse Than October 2008?
The Web Bot guys have been re-tooling their predictive software. Now it’s forecasting  “the bombing of Iran by Israel in late October, about which time, the U.S. government will be contemplating use of its ‘continuity of government’ plans due to social unrest brought about by (what else?) economic collapse.  And that in turn sets a 4-week temporal ‘timer’ that brings us to the part where South Korea receives a nuke or two from the North.  And then things get bad.”
Tired of getting a good night’s sleep? Read Web Bot Forecast for Fall 2009.

businessmanstairs_70x75What? You’re Still in the Stock Market?
Maybe you’re not bothered by the largest amount of insider selling since the DOW’s all-time high in 2007. Maybe the recent, massive, engineered bear-market rally has you seeing “green shoots” as well. Maybe you’re just lookin’ for Ten Reasons to Buy Stocks Now [humor].
A perceptive reader, Mike, is puzzled by all this talk about busting COMEX. Why hasn’t it happened yet? Does the fact that it hasn’t happened yet mean it’s likely it’ll never happen? Are we silver bugs simply doomed to suffer? Reader Asks, “What’s So Hard About Busting COMEX?”.

governator_poster_70x82What Will Foment the Coming Riots?
California, the world’s 7th largest economy, could be the first car in the jerking roller-coaster ride to the bottom of our financial and societal meltdown. Their “Governator” warned, “Califonians have until June 15 to make draconian cuts or face insolvency by the end of July.” But could these budget cuts have unintended consequences? Governator Squeezes Trigger for Crime-n-Riots

1992_LA Riots_70x66What the Next 36 Months May Look Like
In the interest of providing you with an alternate vision—something outside the mainstream—a guy over at SeekingAlpha has penned a worse-case-scenario for the next three years. Some of this is hard to stomach but could he be right about America By 2012: 10 Dire Predictions?

wake-up-and-smell-the-fascism-70x85FEMA’s Martial Law Preparations
County officials south of Chicago reveal FEMA’s attempts to coordinate emergency vaccination of populations, structural hardening of police and fire stations, planning for mass grave locations, and anticipation of ammunition shortages. Indiana officials are worried FEMA’s
Planning for Martial Law.

relax_70x54“11:11” Time For Lunch Or Something Deeper?
Is there a special significance to the occurrences of 11:11 found in just getting through the day? What about “Lightworkers”? More than just installing fiberoptic cables for faster Internet? Here’s my take on the 11:11 Phenomenon & Lightworkers.

nibiru-orbit-nasa_70x72Planet X. 2012.
OK, you asked me what I know about 2012 and “Planet X.” I spill the beans AND hit you up with how a dead star 45,000 light years away may have killed 240,000 people here on little ol’ Earth a few years back. Planet X and 2012.

Read about the only indicator I’ve found that has correctly predicted the timing and magnitude of the 1929 crash in Market Predictions for 2009-2010.

Scott

Checking Off My “To Do” List
WSJ Talks Amero
Stats Say Yes, It’s a *Depression* 
Warnings & Advice from a Saint, Part 1 KEY INFO
– 2009: Worst Still Ahead 
Best Way 2 Control the Masses
– Uncle Sam’s Gold Grab   
Something of Historic Proportions Is Happening 
Shadow Powers Plan for 2011 
Sober Prediction for Nov. 2009 
– Market Prediction for 2009-2010 KEY INFO
 
>> How to Rate Your Bank’s Safety <<
History of the Meltdown… (on-going)

COMEX Warehouses in Trouble?

Since I started tracking COMEX gold and silver warehouse levels last November I’ve grown to be very suspicious of the numbers COMEX reports each day. In spite of increased physical deliveries in both metals, “registered” inventory levels remain more or less stable. This is why I gave up daily updates in favor of weekly ones; I just don’t have all that much faith in COMEX reporting.

Jim SinclairHero and venerable gold guru Jim Sinclair has experience in all things gold going back to the 1970s. Things happening NOW at COMEX gold warehouses are reminding him of severe delivery problems that bankrupted brokers BACK THEN.

Will Increased Delivery Demand Break The Gold Warehouses?

Dear Friends,

I have been speaking with many people this evening who have taken gold delivery.

What I am hearing is not impressive.

For decades warehouses have held, but rarely delivered as compared to store.

When examined closely it is a paper system that may have fallen badly behind as gold moved ahead since 2001.

There is a possibility the system is antiquated and more FUBAR than anyone, even the warehouses themselves, realize.

I have been told that bars delivered do not correspond with the receipts from exchanges.

I have been told that bars of slightly different weight (higher) have been received.

COMEX floor tradingThis may well be a system that has never been asked to handle volumes as are now taking place. This may well be like the old hand clearing equity systems that broke down as volume of trading increased in the early 70s.

F.I. Dupont went out of business because their back office could not meet the growing clearing and trading at that firm.

Pershing, and Vilas & Hickey were the two largest equity clearing firms.

Vilas & Hickey, a NYSE firm of which I was a general partner (at 27 years old) recognized the growing problem and transferred our clearing business to Pershing and merged our activities into another firm, Muller & Company, in order to avoid the impending problem.

I was the sole general partner of the merged NYSE firm so I know what I talk about. We preserved our capital and side stepped a problem that busted many firms.

I smell exactly the same thing in the precious metals warehouse business. How pervasive it is we all will soon find out.

Regards,
Jim

And Jim’s friend J.B. Slear, who helps people out with getting physical delivery from COMEX, is reporting:

1) “We’re finding out that some brokerages will not help with the delivery process or refuse to help even after the commissions are paid.”

2) “Calls today are reflecting concerns about accounting practices in Canada and other G7 countries.”

3) “…We have witnessed cost increases in just about everything “Comex”, from Prudential’s verification process (which is matching buyers monies and sellers bars) all the way down the line to the delivery itself.”

Read more at Assistance Getting Delivery from COMEX Warehouses.

Will the COMEX Manipulation Ever End?

Jim SinclairThe headline above echoes a popular question asked by all who suddenly realize gold and silver prices have been manipulated on the COMEX. No less an authority than Jim Sinclair (of JSMineset.com) answered this query Monday, June 8, 2009:

You always offer me, among the many other lamentations in your communication, the fear that gold and the dollar will always be manipulated to withhold true pricing.

My answer is manipulation only works in the direction anything wants to go in the first place, which gold and the dollar have so far proven correct. Step back and from the day to day ticks and look at the big picture.

The problems out there are so big that no central bank, treasury or group of Banksters anywhere on the planet can afford to handle them. Right now if it were not for the charisma of the new Administration things would have unwound completely.

In time, the problems of today’s financial world to which there is no practical solution will overwhelm the manipulation by simple size of money motivated into the gold market and the number of newly created dollars for sale.

The size of the dollar pool is infinite, and the amount of gold is finite. That is the equation which will make Alf right in his take on the price. It only takes a failure of confidence to motivate the equation. This is why I have been trying to give you clear direction free of the fog of emotion and spin in order to protect you.

At every turn the media, government and Banksters have been trying to get you to dump your protection.

Stay the course. Gold is going to save more than your financial position.

Jim Sinclair

Editor’s note: Alf’s numbers are predicting $3,000 to $4,000 per ounce for gold during this next leg up.

Jim has said this move will begin in just a few days, around June 15, 2009.

I say, “Where gold goes, silver will follow at a ratio between 1:16 to 1:75. Silver is the poor man’s gold.”

$3,500 gold implies silver at $47 (1:75) to $219 (1:16).

Ten Reasons to Buy Stocks Now [humor]

growthstockwireI’ve respected Jeff Clark’s advice on the markets for years now. In the last two weeks he’s made a compelling case for a major. imminent decline in the stock market. I’m getting ready to jump into some DXD (the double DOW down fund).

Then this morning I was mystified to read this headline from him:

Ten Reasons to Buy Stocks Now

For the past few weeks, I’ve been spouting off about all the reasons to stay out of the stock market.

Numerous technical indicators are flashing “sell” signals. There’s massive negative divergence on the charts of all the major broad market indexes. Insider selling is at its highest level since late 2007. The public has forgotten all about the tortuous decline suffered just a few months ago and is casually tossing what’s left of its savings back into the most speculative stocks like a toddler throwing coins into a wishing fountain.

Of course, nobody really wants to hear stuff like that. As one reader put it, “Enough already with the negativity. Can’t you find any good reasons to buy stocks?”

The reader is right. Frankly, I’m tired of being bearish on the stock market. It’s time to blow away the storm clouds of negativity and enjoy the lemon drop sunshine and gummy bear rainbows. Let’s stop focusing on the bad stuff. Instead, join hands with your neighbor and share good thoughts.

And if you’ll hum a little Kumbaya, I’ll share my top 10 reasons to buy stocks right now…

10) The Feds are already doing everything they can to destroy your wealth. Putting all you have into stocks will get the job done faster and free up their time for other things.

9) Bernie Madoff thinks it’s a good idea.

8) You won’t need a calculator to figure out your net worth.
 
7) Your broker won’t have to take a second career delivering pizzas. That’ll open up a job for someone else. The employment report will improve, and you’ll be credited with kicking off the economic boom of 2009.

6) Standing in soup lines is a great way to meet new people.

5) You won’t feel guilty benefiting from the “Take a penny, Leave a penny” tray at the local Starbucks.

4) It’s “Opposite Day.”

3) A diet of Top Ramen and generic beer will bring back all those wonderful memories from college.

2) Homelessness will take your mind off of global warming.

And, the No. 1 reason to buy stocks right now…

1) You won’t have any of those pesky capital gains taxes to worry about at the end of the year.

Best regards and good trading,
Jeff Clark

(Read more from Jeff on The Gowth Stock Wire.)