SEE THIS VIDEO: Northern Rock
Wed Sep 19, 2007 20:13

Jim Sinclair’s Commentary

The Bank of England announced they would guarantee Northern Rock and the Brits did NOT react positively.

When confidence in collateral falls it is extremely hard if not impossible in the short term to rebuild, even if guaranteed.
SEE THIS VIDEO: Northern Rock

Posted On: Wednesday, September 19, 2007, 2:39:00 PM EST

In The News Today

Author: Jim Sinclair

"Raising the debt limit so often should give Congressmen reward points. Like going to Starbacks 10 times, you get your 11th cafe' mochaccino for free." --From the book, “Musing of CIGA Rusty" the Father of

Dear CIGAs,

Here is additional proof that what I have been telling you for years is absolutely true. The problem is over the counter derivatives, but no one has yet told you how big. It is at least a $20 trillion dollar problem. There are no tools anywhere to fix this one other than working overtime to hide what it really is. That means, as I have told you, the problem is still out there and has not been extinguished, nor can it be by any degree of interest rate adjustment. This one is coming home to roost, so prepare yourself now!

Now let me tell you that all I have told you about short of gold derivatives is absolutely true. 99 percent of recent and oncoming development projects have this problem. The industry breaks down into two groups. Those that are so stupid they do not know it, and those that know it but will not tell. Therefore the probability is 99 to 1 that you have the problem.

Even gold sites bashed me on the existence of the over the counter derivative problem both as the key economic risk as well as the primary risk to all varieties of precious metals shares. I have argued this for eight years.

As gold stays longer above $700 all varieties of gold shares are firming, giving you an opportunity to think deeply about what I have been telling you and the opportunity to consider fixing it.

Central Banks Lack Tools to Fix `Panic of '07,' Moody's Says
2007-09-18 19:33 (New York)
By Mark Pittman and Kabir Chibber

Sept. 19 (Bloomberg) -- Central banks may not have the tools to restore stability to credit markets amid the ``Panic of '07,'' and instead should demand greater transparency from financial companies, Moody's Investors Service said today.

Derivatives and the growth of hedge funds using unprecedented amounts of debt have magnified the impact of a rise in borrowing costs, New York-based Moody's said in a report.

``The new financial paradigm has brought with it some problems, which the world's financial policy technicians have not yet solved,'' Moody's said in a report by Vice Chairman Christopher Mahoney and Senior Vice President Pierre Cailleteau. ``Each credit crisis teaches new lessons, often resulting in corrective reforms. The current `Panic of '07' will as well.''

Central banks failed in their initial efforts last month to stem a credit crunch that was sparked by rising defaults on subprime mortgages. The banks used their traditional instruments for propping up markets such as adding cash to the financial system through overnight lending and cutting interest rates.


Jim Sinclair’s Commentary

Dan seems to feel there is a bit of control concerning the substance of media in the US. Now where did he ever get that idea?

Rather Files $70 Million Suit Against CBS
The New York Times
Posted: 2007-09-19 17:42:46

(Sept. 19) - Dan Rather, whose career at CBS News ground to an inglorious end 15 months ago over his role in an unsubstantiated report questioning President Bush’s Vietnam-era National Guard service, filed a $70 million lawsuit this afternoon against the network, its corporate parent and three of his former superiors.

Mr. Rather, 75, asserts that the network violated his contract by giving him insufficient airtime on “60 Minutes” after forcing him to step down as anchor of the “CBS Evening News” in March 2005. He also contends that the network committed fraud by commissioning a “biased” and incomplete investigation of the flawed Guard broadcast and, in the process, “seriously damaged his reputation.”

The suit, which seeks $70 million in damages, names as defendants CBS and its chief executive, Leslie Moonves; Viacom and its executive chairman, Sumner Redstone; and Andrew Heyward, the former president of CBS News.

In the suit, filed this afternoon in State Supreme Court in Manhattan, Mr. Rather charges that CBS and its executives made him “a scapegoat” in an attempt “to pacify the White House,” though the formal complaint presents virtually no direct evidence to that effect. To buttress this claim, Mr. Rather quotes the executive who oversaw his regular segment on CBS Radio, telling Mr. Rather in November 2004 that he was losing that slot, effective immediately, because of “pressure from ‘the right wing.’ ”


Monty Guild’s Commentary

Below is an article about China's inflation and the actions the government is taking to slow inflation. This inflation will find its way into the developed world’s inflation numbers within a year.

This is bullish for gold.

UPDATE 1-China sounds fresh inflation alarm, freezes prices
Wed Sep 19, 2007 4:57am BST

BEIJING, Sept 19 (Reuters) - The Chinese government on Wednesday froze prices that it controls for the rest of the year, in the latest sign of Beijing's mounting concern over inflation.

Beijing also stressed the importance of holding down market-driven prices during the forthcoming holiday period, saying it would have a direct impact on the country's "development, reform and stability".

Ensuring stable prices would also create favourable conditions for the opening of the ruling Communist Party's five-yearly congress on Oct. 15, a statement issued by six ministries said.

The government still administers a vast array of prices, including those for land, transport, utilities and fuel.


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