by Jim Sinclair | Jim Sinclair’s Mine Set

Things are now “Out of Control.”

This international financial crisis is now out of control as the world asks if the USA has two presidents, one president or no president at all.

It would appear that Paulson is in financial control with Bernanke as his second.

I warned you by personal email long before the statement was proven totally correct that “This is it.” That was followed by “This is it, and it is now.” Many people laughed it off.

This is it, and it is now.
Now it is out of control.
Now we enter the Collapse of Confidence period.
Then we begin the Weimar Experience.

It has all hit the fan, and still the absolute majority have no clue. The OTC derivative dealers broke the system into millions of pieces of glass. This broken glass cannot be put back together.
It is heart rending to see a picture of GM autoworkers holding a prayer meeting for their retirement funds. The retirement money was never funded. It is a lost hope. This is another responsibility the government has undertaken that is going to go wild.

Those of you still in freeze frame are headed for lines around your bank. Your bank will likely be acquired by another bank that also is in deep trouble.

The US dollar, like a leaderless company, will lose its respect and therefore value.

In order of importance the following MUST be done unless you want to be one of the suffering masses that will be all too visible this winter:

1. You must have your assets held anywhere they are in true custodial-ship accounts. That type of account at a bank or broker states clearly that the assets held there are not on the balance sheet of the host financial entity. Those assets are clearly segregated in your name. This must be reviewed by counsel to be sure you have what you think you have. Don’t cheap out. All you have is depending on the validity of true custodial-ship accounts.

You cannot know all the banks are broke, however I feel ALL banks are broke because finance is an intertwined system that if visible would look like a spider’s web. Problems on the top will materialize all along the web. Therefore the singular most important step you must take is the establishment of a true custodial-ship account.

Do not assume you have this type of account unless a competent attorney reviews the account papers.

2. I am extremely concerned about those of you who persist in holding certificates for gold rather than holding the actual metal either delivered to you or held for you in a true custodial-ship type account. The scams out there in gold are plentiful. The only way to avoid these scams absolutely is to have your gold in your own possession.

Every other means of holding gold is steps away from perfection. Some will be ok, but many will not.

3. Why would anyone fail to either take paper certificates or order their financial agent to make direct registration book entry at the transfer agent? In most cases you only have until year-end to accomplish this strategy.

4. Withdraw from ETFs.

5. If you carelessly keep large assets with your broker you are as mad as a hatter. The FDIC DOES NOT have the money to guarantee all they are undertaking. Withdraw excess money constantly from any net broker. If you are so stubborn that you think you can trade to insure yourself when your funds are not making money while still getting your money that counts you are nuts. Admit to yourself you are nothing more than a gambling addict in a downward spiral.

6. Leave no gold or coins with any coin dealer.

7. If you can withdraw from your corporate retirement plan do it.

8. Withdraw from credit unions.

9. Withdraw from all money market instruments.

10. This is it.

11. It is now.

12. It is out of control NOW.

The next two months are going to be shocking, but nothing compared to what you will have to experience in 2009.

Respectfully yours,
Jim

Many say it could never happen, they say a U.S. Treasury Bill is a guaranteed investment.  The “guaranteed” money market accounts that many people have their cash stored in are often backed by Treasury securities.

If the U.S. were to choose to default on the treasury securities, large losses will be taken by many; but bankruptcy reorganization is probably the best thing, when you have such a large debt that cannot possibly be paid.

The time has come, a time which is long overdue, to recall the troops, close overseas bases and dramatically slash the size of government.  We need a fresh start and bankruptcy reorganization is the way to accomplish this.

Comrades, we are faced with a situation whereby the government, now more Socialist than ever, flat out refuses to listen to the will of the people; despite the fact that their constituents oppose their bankster “rescue” plan 9 to 1.

I watched, disgusted, as so-many representatives spoke on the floor of the house.  Most of them only concerned with the pork and incentives for idiots (like increasing FDIC insurance), who won’t understand that they are really being screwed and that the FDIC insurance is going to be worthless at any level if the fiat money system collapses.

Imagine that, trying to buy a few votes, versus the future of our nation.  The incredulity of these so-called “representatives” is beyond reproach and I am quite certain that their actions will be are sorely regretted legacy, just months from now when “bailout” Barney’s farce is realized for what it actually is.

Betrayed by the Bailout: The Death of Democracy

William John Cox | GlobalResearch.ca

On this date, October 3, 2008, the American people were betrayed by those whom they had elected to represent them. The members of Congress who voted for the Wall Street “bailout” violated their oath of office to “support and defend the Constitution” … “that I will bear true faith and allegiance to the same” … “and that I will well and faithfully discharge the duties of the office on which I am about to enter: …”

Without holding any meaningful hearings or public discussions and listening only to those most responsible for the economic disaster, Federal Reserve Board Chairman Ben Bernanke and Treasury Secretary Henry Paulson, Congress abdicated its responsibility to the American people.

Locking out most members from all discussions, the congressional “leadership” emerged from their backrooms with legislation that grants Secretary Paulson the ability to spend at least $700 billion to “take such actions as [he] deems necessary” … ” to promote financial market stability.”

Entrusting tremendous political and financial power (and a ton of borrowed money that taxpayers will have to repay with interest) into Paulson’s sole discretion, members of Congress must have been aware that, prior to his cabinet appointment in 2006, Paulson worked for 32 years at Goldman Sachs, one of the Wall Street firms that stands to benefit greatly from his “actions.” Read the rest of this entry »

The “rescue package” is a Trojan Horse folks. It is the method by which the banks are trying to convince us to allocate resources in a wasteful manner, to supposedly save society, when, in point of fact, nothing could be further from the truth.

The reason credit is drying up for “main street” as they so often put it, is because the failing banks are absorbing ever-more liquidity, while everyone else is left to fight for the crumbs. Let the bad banks fail, every last one of them, down to JP Morgan Chase.

If they can’t manage their affairs, they certainly can’t help us manage ours. They need to go and we need to move on.

The Rescue Package Will Delay Recovery

Daily Article by Frank Shostak | Posted on 9/29/2008 | mises.org

In his testimony to the Congress on September 24, Fed Chairman Bernanke urged the legislators to quickly approve the bailout of the financial sector with a package of $700 billion. Bernanke echoed Treasury Secretary Paulson’s view that the bailout expense, while hefty, is needed to remove from banks’ balance sheets the mortgage-linked assets, which are paralyzing the flow of credit.

I think it’s extraordinarily important to understand that as we have seen many previous examples in different countries and in different times that choking up of credit is like taking the lifeblood away from the economy.

Most experts came out in strong support for the package. Without the rescue package, many large institutions that are “too big to fail” could go belly up. Many believe that the consequences of all this could be very severe to the real economy.

It is true that the financial system must be rescued; it must be rescued from the institutions holding bad debt that are currently draining capital while waiting for a bailout and adding little in return. It is they that are preventing wealth-generating activities in the financial sector and the other parts of the economy from expanding real wealth.

The Essence of Economic Adjustment

Conventional thinking presents economic adjustment — also labeled as “economic recession” — as something terrible, even the end of the world. In fact, economic adjustment is not menacing or terrible; from an economic point of view, it is nothing more than a time when scarce resources are reallocated in accordance with consumers’ priorities.

Allowing the market to do the allocation always leads to better results. Even the founder of the Soviet Union, Vladimir Lenin, understood this when he introduced the market mechanism for a brief period in March 1921 to restore the supply of goods and prevent economic catastrophe. Yet for some strange reason, most experts these days cling to the view that the market cannot be trusted in difficult times like these.

If central bankers and government bureaucrats can fix things in difficult times, why not in good times too? Why not have a fully controlled economy and all the problems will be fixed forever? The collapse of the Soviet Union’s centralized system is the best testimony one can have that controls don’t work. A better way to fix economic problems is to allow entrepreneurs the freedom to allocate resources in accordance with society’s priorities.
Read the rest of this entry »

I urge those of you who understand what you are in for if a bailout is done to write your congressmen and tell them that you will not stand for this kind of financial absurdity.  We need to stop the bailout, allow the insolvent institutions to fail and return to sound money.

Here’s what I recently wrote to my congressmen via votenobailout.org.

It really infuriates me to see the Congress giving the White House and its Secretary of the Treasury the power to transfer the people’s money to wealthy bankers on Wall Street.

These are the same people who got us into this mess and bailing them out most certainly isn’t going to get us out.

As a citizen of the united States of America I demand that you vote No to the Bailout legislation. Read the rest of this entry »

There’s clearly an awful lot wrong with the financial system of today.  The talking heads and bureaucrats will tell you that they need more money powers to sort the situation out.  They say that they must create trillions of dollars and have the ability to take over large companies; all of this is to bail out the financial institutions.

When you are thinking about this situation, you have to realize that the original purpose of the Federal Reserve banking system was to give the large Wall Street bankers the peace of mind of knowing that they would always be bailed out, so they would never lose any of their own money.  With a system of this sort in place, financial institutions take risks that they would not have otherwise taken.

Lately, the investment banks such as Lehman and Merrill Lynch have gotten into the habit of “investing” 30 dollars for every dollar in capitol that they have.  It doesn’t take a genius to realize that this is incredibly irresponsible. Read the rest of this entry »

Lately I’ve heard an awful lot of local ignoramuses complaining about the state of the economy, the decline in their investments and just plain how “bad” they have it. They feel so betrayed and have a long list of people to blame and hate.

It seems they will blame anybody, but won’t take responsibility for their own role in their predicament. Its sort of comical to see them all running around scared, acting like this is all a big surprise, but one thing is for certain: if they hadn’t had their heads so far up their asses, they’d have seen this coming years ago.

I would like to tell you the story of one individual, who I have been over-hearing today, who seems particularly deserving of a wake-up call. Read the rest of this entry »

I want to take a moment to relate some information that has come to my attention recently, which has the potential to affect everyone on this planet; but particularly those in the united States of America, since they will first be affected by this.

Over the course of the last couple of decades, the financial managers have been allowed to regulate themselves. There was an implicit mandate to create a boom in the housing market in order to bolster the economy.

In order to create this housing boom, a variety of “exotic” financial instruments were employed, which enable them to leverage their assets, and give more loans than they would have generally been able to give. Most of the troubled financial institutions of today were using “off-balance sheet” entities to hold these financial instruments, many of which were very risky.

Well, it looks as if the widely abused loop-hole that allowed them to keep things off of their balance sheet back-fired in an awesome way. Now the new financial accounting standard regulations FAS 140 are forcing them to move these entities back onto their balance sheet and realize any gains or losses.
Read the rest of this entry »

It has been a year since economist Lyndon LaRouche announced that world financial system is in the midst of a breakdown crisis. He offered a set of solutions, which were probably capable of repairing the economy and rebuilding the necessary infrastructure.

Although action was taken in many of the localities throughout the USA, the democratic party in CONgress blocked anything that even smelled like a solution.

Here is LaRouche’s latest thoughts on where we are, as well as where we are going. It isn’t rosy at all… he says we only have a few more weeks left before the system, as he puts quite bluntly, dies.

My question is, will they end up putting the USD onto a newly revitalized gold-certificate ratio? I don’t think they will have much of a choice, unless they want to see all-out chaos in the streets…

Download/Watch/Listen One Year Later — But Still Not Too Late

Source: Monty Guild and Tony Danaher | Guild Investment Management

Food inflation as we have mentioned is here to stay. Corn prices may be peaking as the Mississippi river crests, but we see higher prices for other substitutable grains. A decline in food prices could happen temporarily in the autumn if the U.S. Government and others end set their aside programs and other countries start to develop underdeveloped farmland. This will not lead to a large increase in food production worldwide initially but in the long term production will rise.

The problem is that consumption is also rising at a rapid rate. While worldwide production will not go up by a huge amount, the main effect will be psychological. As people come to the conclusion that supplies may increase, speculators will exit positions. Over the longer term, global food stocks will be rebuilt as they are way too low. This rebuilding of inventories will keep prices firm.

As we have mentioned in the past, global food inventories have fallen in 7 of the last 8 years. These inventories must be rebuilt for many years before prices can really start to fall. The fact is, global food prices are lower in inflation adjusted dollars than they were decades ago. Even in the most optimistic case, inflation adjusted corn, wheat, soybeans, and other foods must rise for years to come just to get back to their inflation adjusted prices of 50 years ago.

An aside…developed country consumers spend less of their budget on food compared to consumers in other countries. We believe that this will change. Consumers in developed countries will be spending more of their total income on food as well. Read the rest of this entry »