NOW THE REAL EARTHQUAKES BEGIN -- SOME NEW PREDICTIONS

Here's a great quote from a story on T-Bills (linked below)

"One of the more unusual manifestations of the financial meltdown this year has been the dollar spike, that caught a lot of traders by surprise, and was generated in part by a stampede into the percieved safety of short-expiry US Treasuries, which necessitated the purchase of US dollars. This is now arriving at its ultimate conclusion where Treasury yields have been beaten down to zero, which means that in real terms they are negative, resulting in the bizarre situation where investors are now paying the US government for the privilege of lending them money. This is clearly an untenable circumstance that cannot be expected to continue indefinitely, and it has only been occasioned by desperation, as panicked investors have sought safe haven."

http://www.marketoracle.co.uk/Article7669.html

PLUS, the BIS is now warning that the bailouts are putting nations at risk... That means several nations (e.g. the US) might be going bankrupt soon.

So here's the way the first half of next year is shaping up. Mark my words here amigos. MIKE RUPPERT IS MAKING ANOTHER PREDICTION.

Dollar collapsing. Oil rising slowly in the first three months, after an OPEC production cut to try and hide Peak a little longer. Some temporary and illusory signs of a "maybe-sorta" recovery and bottom. Bailouts continuing. (Some like Citi might cry wolf again.) Bailout sending. Bigger banks failing. One of the big three failing (GM or Chrysler) plus maybe one more in Chapter 11. Foreclosures skyrocketing. Layoffs exploding. Then somewhere around June or July, an oil spike up past $100.bbl. That should pretty much finish things off. It's possible that by the end of 2009 the Government of the United States of America will declare itself insolvent.

Remember also that the Federal Reserve is a consortium of privately-owned banks and that it too can fail... It can probably declare bankruptcy which -- carried to its fullest extreme -- would mean that there would be no effective legal tender "for all debts public and private." Note the "public" part. They could possibly "public" in many ways.

How much do you think gold might be worth then? I don't know how to put a number on what gold could be worth if that happens.

[Rice Farmer, you rock!]

MCR
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Call it heroic patriotism. Or touching, if pathetic idealism. Or call it the final fukking over (a phrase whose Anglo Saxon spelling I've apparently coined) of the public before the Hugest Pop of the World's Latest Greatest Biggest Baddest Really Humongulous Bubble. In an article marvelling over the zero yield of US treasuries, this morning's New York Times calls these investments "the world's safest."

The Times is not a-changing; on the contrary, it is living in a time warp as well as a geography warp. For true to its xenophobic, solipsistic tradition, it is comparing US treasuries to US stocks as opposed to some other country's treasuries in today's economy.

Keep on running, people. Just don't look down or you might notice that the ground beneath your feet has disappeared. Only then will we all go splat.

Like a doctor who, hearing that his medicine has done no good, doubles the dose, the fed is a one-trick pony. When the ground disappears, they simply run faster.

Ostensibly this is because they are focussed on the immediate problem, deflation. And since we live in a constant state of emergency, they are 'of necessity' responding with short term fixes or at least what they're calling fixes. Maybe they mean that in the sense that a baseball game is fixed.

But the faster we run, the sooner we hit hyperinflation. Does the word evoke in you the symptoms of the sound-alike "hyperventilation?" No? Wait a few months.

In the vortex that is approaching, everything, particularly metaphors, will get blended together like the kaleidoscopic images in a dream. The United States and Zimbabwe, previously at economically opposite poles, will find themselves rubbing elbows in hell on wheels.

And yet, even as I never cease to marvel at the sleight of hand of today's media, I'm grateful for the bromides, the mindless reassurance. It means we have another day.

Follow the 8.5 Trillion: Breakdown of the Bailout
http://www.sfgate.com/cgi-bin/object/article?f=/c/a/2008/11/26/MNVN14C8QR.DTL&o=0

The New Yorker magazine runs a competition in which they present a cartoon and readers are invited to submit captions. You might find this week's cartoon fun. http://www.newyorker.com/humor/issuecartoons/2008/12/15/cartoons_20081208?slide=8#showHeader

JO