Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: Chispas who wrote (76900)	3/26/2008 11:47:20 AM
From: Chispas	Read Replies (1) of 116555

Jim Sinclair, Please consider for a moment what is happening to the balance sheet of the US Federal Reserve. Borrowings are growing by each billion it puts into bankrupt financial entities while what is taken in collateral is worthless special performance contracts on financially disavowed mortgage instruments, not the actual mortgage instrument. This means as billions go out of the US Fed, total crap comes in that has no hope of performing as the entity that is to perform is bankrupt. This crap paper will never function. The OTC derivative taken in by the Fed both in outright purchase at full value or collateral at full value is dead and gone as is the dead entity supposed to perform on the special performance contract called an OTC derivative. Loans that are made are in no way 28 or 30 day loans but rather grants to financial entities to be rolled over into the next lifetime. The US Federal Reserve in keeping up the giveaway to those who have caused this problem are destroying their own balance sheet. This leaves gold as this central banks only asset and don't kid yourself - the Fed knows it. Gold is going to $1650. Tomorrow I am the luncheon speaker at the AMEX Precious and Base Metals conference in New York. I am tempted to go to the podium and say gold is going to $1650, the US dollar to .5200 and that is all anyone needs to know. I may follow it up by asking if there are any intelligent questions and stating fools will not be trucked! Regards, Jim jsmineset.com

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