Lithium: China Is The Key To Mass Acceptance Of Electric Cars FXI, WLC.v, CLQ.v, SQM, GM, F, TMT, GOOG, AAPL, AMZN, RIMM, QQQQ

Jay YarowMar. 11, 2009, 4:34 PM13
Loads of people still hang onto fears of poor Chinese manufacturing, but if we want to get cheaper electric cars in the United States, we should let go of those fears.
Daryl Siry, former chief marketing officer for electric car start up Tesla, argues that we need to outsource more of our electric auto production to China. In addition to the added cost of batteries for electric cars, the high labor costs in the US push the sticker price on electric cars too high.
For instance, the "cheap" Tesla sedan, the Model S, is projected to cost $58,000, but Siry thinks it will cost much more, closer to the $87,000 car being developed by Tesla rival, Fiskar, another electric automaker. The Chevy Volt, a comparatively affordable electric car still costs $40,000. Those prices look astronomical in comparison to Chinese automaker BYD's $22,000 electric car which should hit our shores in two years. (BYD is in portfolio of Warren Buffet - S.)
Few automakers want to get their cars built in China, because the nation has a reputation for shoddy quality. But if they can shake off the stigma that comes with Chinese production, automakers could build less expensive electric cars in China. The low price would then hurry along mass adoption, helping to wean us off oil.
The biggest problem with Siry's plan, though, is that all US automakers seem to need a bailout of some sort. Tesla is hoping for Energy Department money, as is Fisker. The struggles of GM and Chrysler are well documented. Siry argues that companies such as Apple design their products in the US and manufacture them in China. The quality isn't any worse and it still supports American industry. While it's a good thought, we doubt the government would be willing to finance companies that design and sell electric cars in the US but make them elsewhere.

US Dollar collapse: Foreign debt purchases fall sharply in January DXY, GDL, SVL, GDX, SLW, TNR.v, RMK.v, BTT.v, GBN.v, CGH.to, SBB.v, MGN, OK.v,

Offshore banking centers sell Treasurys; central banks sell agencies
By Laura Mandaro, MarketWatch
Last update: 3:59 p.m. EDT March 16, 2009
SAN FRANCISCO (MarketWatch) - A big jump in foreign sales of long-term U.S. securities raised concerns Monday that the U.S., in the midst of a massive debt issuance to fund its economic revival plans, may run into trouble getting other countries to finance its deficit.
Foreign purchases of long-term U.S. Treasurys, Fannie Mae bonds, corporate debt and stocks -- netted for acquisitions of foreign debt from U.S. residents -- dropped to negative $43 billion in January from positive $34.7 billion in December, said the Treasury Department Monday.
January's sales marked a record low, said currency strategist Michael Woolfolk, and the reasons for the plunge could spell bad news for the U.S. dollar.
"This was a truly awful report, throwing into question the funding of the U.S. current account deficit," said Woolfolk, senior currency strategist at the Bank of New York Mellon, in emailed comments.
Economists anticipate the U.S. current account gap, or the balance of trade with other countries in goods, services and investments, narrowed to a deficit of about $137.5 billion in the fourth quarter. The Commerce Department releases that report Wednesday. See Economic Calendar.
Concerns that U.S. creditors could balk at buying more U.S. debt were thrown into relief last week after China, the biggest holder of U.S. government debt, said it was worried about the safety of its U.S. bonds.
The U.S. is in the midst of raising more than $2 trillion by selling Treasurys, beating past records by a wide margin, according to estimates by big bond dealers.
Importantly, both China and Japan increased their holdings of U.S. Treasurys, though Chinese purchases slowed from their 12-month average in December and January, said RDQ Economics.
Troubles at now nationalized mortgage finance giants Fannie Mae and Freddie Mac prompted foreign investors to flee this category of government debt in the second half of last year, helping drive up yields relative to Treasurys. In response, the Fed in late November said it would start buying those bonds to bring down yields and related mortgage rates.
The continued selling of agency and U.S. corporate bonds suggests a structural problem within the U.S. balance of payments "that could begin to undermine the USD," Woolfolk said.
On Monday, the U.S. dollar fell against the euro and other trading rivals. Analysts attributed the decline to investors buying more risky assets, such as stocks and the British pound, after Fed Chairman Ben Bernanke said he expected the U.S. recession to end this year.
One euro bought more than $1.30 for the first time since February. The dollar index slid 0.1%. Read more in Currencies. U.S. Treasurys fell on the same news, with yields on the benchmark 10-year gaining 6 basis points to 2.95%. Yields have edged up since the start of the year, but at levels below 3%, they are still historically quite low.
Tax haven sell-off
More broadly, monthly foreign capital flows that include net foreign purchases of long-term securities, short-term U.S. debt such as Treasury bills and banks' liabilities, fell to negative $148.9 billion. That was also a record low, said Woolfolk, and suggests foreigners fled T-bills and banks deposits after plowing their cash into these safe-haven holdings in October and November.
The Treasury's report on capital inflows rarely moves markets because of its considerable lag: Investors won't get February's report until mid-April. But viewed over the long term, it can yield clues on the debt purchases that have been bolstering the dollar and keeping yields on U.S. Treasurys low.
One trend of note was a large volume of sales in tax havens, including Caribbean banking centers and Luxembourg.
Caribbean holdings of U.S. Treasury securities fell $20.9 billion, while holdings in Luxembourg slid $10.2 billion.
"The sales reek of hedge fund selling and quite possibly from investors who were Madoff-ed," said Tony Crescenzi, chief bond market strategist at Miller Tabak & Co., referring to reports of Luxembourg-based hedge funds said to have lost money by investing with fraudulent New York financier Bernard Madoff.
Or, said analysts at RDQ Economics, the sale of Treasurys by Caribbean-based investors may reflect hedge fund money that had been betting that the Fed would by U.S. Treasurys - as it suggested in December it was considering. It has refrained from buying Treasurys on the open market so far. Read more on Fed's plans to buy U.S. Treasurys.
"Once it appeared that the Fed was backing away from such an action, those positions were taken off," they said.
Laura Mandaro is a reporter for MarketWatch in San Francisco.

TNR Gold TNR.v Los Azules operator Minera Andes MAI.to pays off outstanding Macquarie loan of US$17.5 million TNR.v, MAI.to, CDNX, FXI, HUI, XAU, GDX

Minera Andes is back into solid financial position and Rob McEwen is in charge, next move is to officially notify Xstrata about scoping study and put the clock running its 90 day period for a back up of 51% by Xstrata. Somewhere down the line TNR Gold TNR.v is supposed to make some moves to bring more credibility to its claims in BC court. Winter could be interesting in that part of the world. Shareholders liked the news and stock MAI.v went up 12.5% today, it is still below Rob McEwen purchase price for PP at 1.0 CAD. What kind of a discount is it? Anyway easy money above 1.0 CAD will be made and further positions will be taken down the risk line profile.

SPOKANE, WA, March 16 /CNW/ - Minera Andes Inc. (the "Corporation" or "Minera Andes," TSX: MAI and US OTC: MNEAF) announces that it has repaid in full the Corporation's indebtedness to Macquarie Bank Limited ("Macquarie"), of Australia. The aggregate indebtedness was US$17.5 million, which consisted of a loan of US$7.5 million due on or about March 7, 2009, and a loan of US$10 million due in September 2009. The Corporation no longer has any bank debt.

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Electric Cars and Peak Lithium. FXI, SQM, WLC.v, G, TMT, GM, GOOG, AAPL, AMZN, RIMM.

We have not signed yet into Peak Lithium camp, but when oil will be back above 75 USD, electric cars in the amount lets say 10% of total fleet two billion will be a pretty big number for still very small industry.

"The people of the world will drive some two billion cars by 2030, up from roughly 700 million today. One of the leading hopes for avoiding greenhouse gas overload from all those tailpipe emissions is electric cars.From the Chevy Volt to the Tesla Roadster, cars that run on battery power rather than gasoline are fueling hopes for a cleaner transportation future. Even if we switched all U.S. cars to run on electricity from coal-fired power plants we'd emit less than we do now, according to a study from Pacific Northwest National Laboratory.But, in terms of economics, are we trading peak oil for peak lithium? Lithium is, obviously, a primary component of the lithium ion batteries powering the first generation of electric cars. The bulk of it is found in Bolivia. Even worse, according to some, most of these advanced batteries are made in Asia. In fact, General Motors selected a battery from Korean company LG over American start-up A123Systems for its initial Volt.But GM, assuming it survives, is also investing in a battery manufacturing plant in Michigan and there are deposits of lithium in the U.S. as well. Peak lithium may yet become a concern but first there would have to be a lot more electric cars on the road.
—David Biello"

Inflation watch: Grains are moving up. DBA, HAU.to, FXI

Water play is our Grains, HAU.to is highly leveraged to daily move of Grain index. It is an inflation indicator, play on water and credit shortage and increasing population demand. This one is a short term trade on Bear market rally.

China FXI: Decoupling before the Move. FXI, CZX.v, CUU.v

Decoupling is apparent from this chart: FXI has never really challenged October 2008 Low. We have Bullish higher lows on the chart, BB bands are getting closer indicating reduced volatility before the big move. Odds are high it will be move Up.

Silver SLV: still Bullish picture. SLW, ASM.v, KTN.v, FVI.v, OK.v, SBB.v, MGN, RVM.to, KS.v

Silver is still in a Bullish picture. Last week has retested MA200 and formed Bullish Hammer. Silver will not be able to move forward without Gold, but should Gold move up it will outperform Gold.

Gold GDL: consolidates in a Handle of Cup and Handle. GDL, GDX, HUI, XAU, RMK.v, TNR.v, BTT.v, GBN.v, CGH.to

Gold is consolidating in a weekly Cup and handle bullish formation. Last week bullish Hammer appeared on the chart with US Dollar sliding down. Once "normal" US Dollar-Gold relations are back Gold will move decisively higher.

US dollar collapse: Weekly Double Top Reversal. DXY, GDX, HUI, XAU, SLW, TNR.v, RMK.v, FVI.v, OK.v, MGN, BTT.v, GBN.v, ASM.v, CGH.to, CZX.v

We wrote before last week about our US Dollar crash alert, the China questioned quality of Debts of US Corp, they were reassured by Obama and couple of battle ships close to their shores. Jim Paplava is talking about 3 Trillion US Dollar debt to be sold this year to finance all bailouts and rising Deficit to 2 Trillion. Have all these fundamentals finally filtered down to trades' brains? US Dollar looks scared on Weekly chart with Double Top Reversal, RSI is lower with Second Top, MACD has not made new high with Second Top. Chances are good that apart from "we do not really know what to do together" communique from London G2o meeting of finance ministers, dollar will be allowed to slide down and pronounce Inflation next week. National game will be to manipulate your currency and devalue debts increasing export revenues. Swiss and Japanese are in on a big scale, UK was the first "clever" player help by total mess in banking and Russia are struggling with collapse of Oil revenues from last summer. US economy was punished by strong dollar from GE to Google, problem will be how to manage the slide down onto the Downtrend without getting into Waterfall scenario with USD breaking below 70?

Bob Moriarty on Fortuna Silver. FVI.v, SLV, SLW, SSRI

Always take write ups from guys paid to do it with grain of salt, but Bob Moriarty has his name and it is interesting to follow him. His recent write up on Fortuna Silver is covering one of our potential candidate for Silver Consolidation M&A game in Mexico.

"Readers who have been around for a while may well remember my first write-up of Fortuna in September of 2005. You owe it to yourself to go back and reread the piece. I did, I had to, to figure out what I had said. It was interesting reading, I did a good job. The stock ran from about $1.04 a share to almost $4 over the next couple of years.
Fortuna got hammered last year but it has nothing to do with the caliber of the projects or the caliber of management or the price of silver. It got hammered because people had to sell anything and everything to raise money and they threw out the baby with the bath water. It got to a point in October that even with a producing mine making money, they were selling for less than the cash they had in the bank. They are still absurdly cheap. (Here we are in a full agreement S.)"

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TRU Presentation Lithium Supply & Markets IM Conference Santiago 2009 Slide Show. TTM, F, GM, GOOG, FXI, SQM, RIMM, OIL, OIH

TRU Group Inc, Toronto ON, Tucson USA - Lithium consultants TRU Group Inc says that its updated lithium outlook for presentation Tuesday at the IM Lithium Supply & Markets Conference Santiago 2009 will conclude that the industry is not immune from the global recession and will be pushed into oversupply this year through 2013. Global use of lithium will decline sharply by at least 6% in 2009 and demand is unlikely to bounce back any time soon as consumers put off buying laptops or cell phones containing lithium batteries. This is bad news for an industry accustomed to strong sustained growth over many years. TRU president Edward Anderson commented that “an outlook presentation of this type is very unusual for us because all of our work is client confidential. However, Mitsubishi Corporation who commissioned the original analysis has authorized TRU to release some of the material”. The techno-economic analysis and supply-demand forecast is a major in-depth assignment conducted by the TRU Lithium Team made up of the world’s top technical experts on lithium production and extraction on the supply side, as well as our specialized industry analysts on the demand side. Impacts of recent advances in lithium extraction technology (for example, in selective ion adsorption, electrodialysis, and nanofiltration) are considered.
It is likely now that some expansions and new projects will be delayed or cancelled until market conditions improve. The long range however remains bright because new and large uses for lithium will start having a major impact on demand within the five year horizon: Lithium use in electric vehicle batteries and lithium alloys for aircraft. TRU forecasts that demand will be strong and sustained in these two segments over the long term 2020. The industry does need at least one of the announced pipeline production projects to come into production and also could do with another new project as the market tightens around 2015-2017. New lithium producers still will need to be cost competitive with existing salt lake brine based producers in South America and China. Emerging technology may make some of the undeveloped medium sized (brine) lithium resources quite attractive. Certainly the industry through expansion and development of new resources will have no problem meeting demand. 2009 global Uyuni lithium download slide show free
TRU Group Inc based in Toronto, Canada and Tucson, USA are industrial management and engineering consultants with a strong capability in lithium project development. The firm is a world leader in resource evaluation, salar exploitation, brine & mineral lithium extraction and processing technologies - those in use, prospective, and leading edge. TRU has evaluated and modeled most of the known existing lithium properties and advised a number of players on a wide variety of lithium resource, engineering, process, business and investment issues.

Presentation

Lithium: Tata Motors Shows Nano Europa, Indica Vista EV at Geneva. FXI, EPI, OIL, OIH, HUI, XAU, GOOG, AAPL, AMZN, RIMM, SQM, GM, F, TTM

This is the first Electric Car unveiled by Tata Motors.

"The Indica Vista EV (electric vehicle) will be the world's first large scale production electric vehicle. Capable of carrying 4 passengers, plus luggage and using state-of-the-art battery and motor technology, the Indica Vista EV offers consumers a safe, comfortable, reliable, cost effective and environment friendly transport solution."

We have posted a lot very sexy and very expensive rides on this blog lately. In order to buy them from our investments in Lithium we need guys from Tata Motors to develop and sell hundred thousands of very cheap, safe and reliable Electric Cars available for middle class families in Emerging world with 4.5 billion people. This one looks good enough for us with 200 km range. Next thing we will have to start talking again about Uranium - where from all this electricity is going to come.

Tata Motors Shows Nano Europa, Indica Vista EV at Geneva

4 March 2009
Tata Motors presented the Tata Nano Europa, intended for a future launch in select international markets, at the Geneva Motor Show. The company also displayed the Tata Indica Vista EV, an electric vehicle based on the award-winning new generation Tata Indica Vista, and the Tata Prima, a concept luxury sedan. Tata will launch the Nano on 23 March in India.

The Tata Nano Europa has a slightly longer wheelbase (2.28 meters) compared to the Tata Nano. To meet the driving needs of its target customers, the Tata Nano Europa will be powered by a 3-cylinder all-aluminium MPFI engine matched with a 5-speed automatic transmission, and electric power steering. The gasoline engine will produce low CO2 emissions of less than 100 g/km.
The Tata Nano Europa meets all safety regulations. In addition to the all sheet-metal body, its energy absorbing design, use of advanced restraint systems, ABS, ESP and Air Bags will enhance passenger safety.
The Tata Indica Vista EV will be capable of carrying four individuals, adequate luggage space, with a predicted range of up to 200 km and acceleration of 0-60 km/h in under 10 seconds. Tata uses super polymer lithium ion batteries from Electrovaya. Tata Motors’ electric vehicles will be produced in association with Miljø Grenland/Innovasjon, Norway. (Earlier post.) Tata Motors’ UK subsidiary, Tata Motors European Technical Centre plc, has a 70% stake in Miljø. The first such vehicle to be developed by the company is the Indica EV, which is currently undergoing extensive tests in Europe.

Lithium: Ultra-High-Power Lithium-Ion Batteries. OIL, OIH, FXI, SQM, WLC.v, CLQ.v, GOOG, RIMM, AMZN, AAPL, F, GM

A lithium-ion battery electrode described this week in the journal Nature can deliver electricity several times faster than other such batteries. It could be particularly useful where rapid power bursts are needed, such as for laser weapons or hybrid race cars.
Test batteries based on the new electrode--developed by Gerbrand Ceder, a professor of materials science at MIT--can be discharged in 10 seconds. In comparison, the best high-power lithium-ion batteries today discharge in a minute and a half, and conventional lithium-ion batteries, such as those in laptops, can take hours to discharge. The new high rate, the researchers calculate, would allow a one-liter battery based on the material to deliver 25,000 watts, or enough power for about 20 vacuum cleaners.
This level of power output would put these batteries on par with ultracapacitors, gadgets that can rapidly discharge power but can't carry much energy for their size, says John Miller, a vice president for systems and applications at Maxwell Technologies, a manufacturer of ultracapacitors, who wasn't involved in the research. The new batteries would store nearly 10 times as much energy as an ultracapacitor of the same size. The combination of small size and extreme power could make the batteries particularly useful for race cars, he says. (Starting this year, new Formula One racing rules will allow race cars to store energy from braking to deliver very brief jolts of acceleration.)
To improve the batteries, the researchers modified an electrode material called lithium iron phosphate to allow electrons and ions to move in and out of it much more quickly. The advance is based on computer models that Ceder developed in 2004. The models suggested a way to improve conductivity by directing lithium ions toward particular faces of crystals within the material.
To exploit this, Ceder included extra lithium and phosphorus. This helps form a layer of lithium diphosphate, a material known for its high lithium-ion conductivity. He says that ions encountering the material are quickly shuttled to faces that can pull them in, allowing for very fast discharging.
The fast-discharging materials may also recharge quickly, raising the possibility of cell phones that charge in seconds, Ceder says, but this would require expensive chargers. Ric Fulop, vice president of business development at A123 Systems, a battery maker based in Watertown, MA, that has licensed Ceder's new material, says that it could be useful for hybrids or for delivering the power needed for laser weapons. (Fulop notes that A123 is not developing batteries for the latter application.)
Other researchers have already modified lithium iron phosphate to achieve power levels high enough for power tools and for most hybrid vehicles. Indeed, iron phosphate batteries are already being sold by more than one battery maker for such applications. Ultimately, the energy capacity of lithium iron phosphate is lower than that of other lithium-ion battery materials, making Ceder's advance of limited value, says Jeff Dahn, a professor of physics at Dalhousie University, in Halifax, Nova Scotia. This battery is good for acceleration, but not as much for long range. "A real breakthrough . . . would be a new positive electrode material with quantum-leap performance specs" in energy storage, Dahn says.

Gold, Oil and US dollar: Chinese Central Bank sees gold, oil and other resources recovering this year, but dubious on dollar. FXI, OIL, OIH, GDX, HUI

It is just getting better and better: coordinated action before Finance Ministers G20 meeting in London. US Dollar under fire, General Bernanke advanced his troops, news blast from every angle on weakness in US Dollar - just wait util Oil will pronounce after Gold that Deflation is dead, long live Inflation. Inflation plays Agri Grain, Lithium and good old Zinc and Copper ideas will be helpful in that environment. Always check who is talking about the trend - if it is the guy with the biggest cheque book on the floor it could be credible.

COPPER AND ALUMINIUM TO REBOUND
Chinese Central Bank sees gold, oil and other resources recovering this year, but dubious on dollar
The People’s Bank of China sees potential rebound in gold, oil, other resource prices, but feels outlook for U.S. dollar uncertain beyond start of year as the U.S. deficit and low rates sap attraction of dollar assets. Author: Zhou Xin and Simon RabinovitchPosted: Friday , 13 Mar 2009
BEIJING (Reuters) -
The prices of resource products from gold to crude oil are likely to see upward pressure later this year, while the outlook for the dollar is uncertain, China's central bank said in a report issued on Friday.
In its annual international financial markets report, the People's Bank of China said it expected global demand to continue to weaken this year but held out the hope that the forceful policy response of governments could lead to a turning point in the world economic crisis.
"The international financial crisis will continue in 2009, and the world economic slowdown may continue. The global economic and financial situation faces huge complexity and uncertainty," it said in the 147-page report.
"The measures taken by governments will gradually show their effects, and there may be a turnaround in the world economic and financial situation. The international financial markets are likely to warm up in the second half of this year."
The central bank added that because of the spreading uncertainties of the financial crisis, financial markets would continue to be marked by a high degree of volatility.
Specifically, it said it expected the following movements in prices:
DOLLAR
-- To be strong in early 2009, but uncertain what will happen to the dollar later in the year.
"At the start of 2009, the U.S. dollar will maintain its upward trend against other major currencies, but because of the unclear economic outlook for major economies and other factors, the full-year trend for the U.S. dollar is quite uncertain," it said.
"Safe-haven demand for the U.S. dollar has risen with the spread of the financial crisis and the implementation of U.S. economic stimulus plans has also become a supporting factor for the dollar.
"But the big rise in the U.S. fiscal deficit and the very low U.S. dollar interest rates will reduce the attractiveness of dollar-denominated assets."
GOLD
-- Prices to stay high and could scale new peaks.
"In the context of the financial crisis, the price trends for gold, the dollar, crude oil and other commodity futures all experienced a divergence.
"Due to the complexity and uncertainties of the development of the financial crisis, gold price trends will be quite uncertain in 2009. But generally speaking, gold prices will fluctuate at high levels and may possibly break through previous highs."
OIL
-- Prices to remain low in the first half, but likely to make big gains in the latter half of the year:
"Following OPEC production cuts and some economies gradually recovering, the decline in supply and the recovering demand will combine to support a rebound in international crude oil prices.
"We forecast that it is very likely that international crude oil prices will fluctuate at a low level in the first half of this year but will rise in quite a large range in the second half."
COPPER AND ALUMINIUM
"At the end of 2008, copper and aluminium future prices dropped to their lowest levels in recent years. There is quite a big possibility that they will rebound in 2009." (Additional reporting by Langi Chiang and Aileen Wang; Writing by Jason Subler; Editing by Ken Wills)

Mr Wen be assured - everything is fine with our IOUs! U.S. Destroyer Escorts Surveillance Ship in South China Sea FXI, VIX, GDX, HUI, XAU

Is it plain stupid or the last Empire resort to its strength - military one? House of cards will start falling apart ones Oil will move above 75 USD.

By Tony Capaccio
March 13 (Bloomberg) -- A U.S. Navy surveillance vessel on a submarine spotting mission has been joined by a U.S. destroyer in the South China Sea, according to a Pentagon official, days after the surveillance ship was allegedly harassed by Chinese boats.
The USNS Impeccable has been joined by the USS Chung-Hoon, a destroyer already on a routine deployment to the area but moved closer after five Chinese vessels, in a possibly coordinated effort, “shadowed and aggressively maneuvered in dangerously close proximity” to the surveillance vessel on

US Dollar Monitor: Into the Financial Abyss - Chinese are better be prepared. DXY, HUI, XAU, GDX, TNR.v, RMK.v, GBN.v, BTT.v, RR.v, SGC.v, CGH.to

After all Gold above 5000 USD/oz could be not only Gold Bugs Dream, but Chinese reality. "There is simply not many big enough markets to accommodate Chinese surplus apart from US Treasuries" - argument goes. But does it mean that they will continue to accumulate Debt from Bankrupt State? From all recent developments they are pursuing different policy for their reserves: buying strategic assets like Copper and Zinc, stakes in companies in basic materials sectors and more and more talking about Gold. Will G20 push again agenda pronounced by Russians and echoed by Chinese privately in Davos of supporting alternative reserve currencies apart from US Dollar?

Into the Financial Abyss
By Dr. Mark W. HendricksonFrontPageMagazine.com Tuesday, March 10, 2009
The U.S. Treasury recently released its “2008 Financial Report of the United States Government.” In case you had any doubts, our government’s finances are in a terrible mess. According to the report, under generally accepted accounting principles (the ones that private businesses are required by law to use), Uncle Sam’s total financial liabilities—explicit debts and unfunded obligations—exceed $65 trillion. That’s five times as large as our national GDP—a GDP, by the way, that happens to be shrinking at an alarming rate.I don’t know about you, but I find those incomprehensibly large numbers disorienting. I feel like Alice when she fell down the rabbit hole and entered a realm of the absurd.Does anyone believe that the federal government will ever be able to scratch together an extra $65 trillion on top of the other trillions that Washington intends to spend every year? Not a chance. As I wrote last fall, “We’re Broke.”So, how does the current administration propose to put Uncle Sam’s fiscal house in order? What plan does it have to rescue us from outright national bankruptcy? For starters, President Obama has presented a budget with an estimated $1.7 trillion deficit for 2010. Far from pulling back from the brink, we are plunging headlong into the fiscal abyss. We’ll never climb out of the hole by digging it deeper.

US Dollar Collapse: Wen Voices Concern Over China's U.S. Treasuries DXY, HUI, XAU, GDX, SLW, RMK.v, TNR.v, OK.v, SBB.v, RR.v, GBN.v, MGN, CGH.to

Our yesterday Crash Alert on US Dollar is getting more sense now with Chinese worried about their investment in US corp debt. Now FED can push US dollar down and blame Chinese for evil doing continuing to talk about strong dollar.

By ANDREW BATSON and ANDREW BROWNE
BEIJING – Chinese Premier Wen Jiabao expressed concern over the outlook for the U.S. government debt China holds, urging Washington to take effective policies to restore the American economy to health. He also said China can do more to boost its economy if that becomes necessary.
Speaking at his annual press conference, Mr. Wen voiced confidence in the Chinese government's ability to keep its own economy growing, and said it has the resources to roll out additional stimulus measures if needed.
"We have reserved adequate ammunition. We can at any time introduce new stimulus policies," he said.
Mr. Wen reaffirmed that China can meet its traditional target of economic growth of around 8%. He said market expectations last week of another stimulus package were based on "rumors and misunderstandings," and that China's existing four trillion yuan investment program addresses "both short term and long term needs."
Premier Wen Jiabao, at his annual press conference marking the close of China's legislative session, spoke forcefully about the effect of China's policies on the global economy.

But he noted that the U.S. remains the world's largest economy, and said that China is closely watching the effects of policies taken by U.S. President Barack Obama.
"We have lent a huge amount of money to the U.S., so of course we are concerned about the safety of our assets. I do in fact have some worries," Mr. Wen said in response to a question. He called on the U.S. to "maintain its credibility, honor its commitments and guarantee the safety of Chinese assets."
China holds the world's largest foreign-exchange reserves, reported at $1.946 trillion at the end of 2008, and about two-thirds of that sum is believed to be held in U.S. dollar assets, primarily Treasury bonds. Mr. Wen repeated China's position that the foreign reserves are managed with a view to "safety, liquidity and profitability" – in that order. He said that while China's first priority is to protect its own interests, it will "at the same time also take international financial stability into consideration, because the two are inter-related."

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Lithium. Battery maker envisages electric car boom. FXI, GOOG, AAPL, AMZN, RIMM, WLC.v, CLQ.v

By Robin Harding in Tokyo
Published: March 9 2009 22:33 Last updated: March 9 2009 22:33
Electric cars will create such a vast market for batteries that there is little chance of oversupply, according to one of the world’s largest battery makers.
If only 10 per cent of cars went hybrid or electric, there would be an “unbelievably large market” for lithium-ion batteries, Makoto Yoda, president of GS Yuasa, told the Financial Times.
The prospect of a boom in hybrid and electric vehicles has prompted a rush of investment in the advanced batteries, which store huge amounts of energy for their size and weight.
Lithium-ion technology is also seen as the best hope for electric vehicles to travel long distances between charges.
Panasonic’s takeover of Sanyo Electric was largely motivated by the latter’s lithium-ion battery business; Toshiba is spending about Y20bn ($202m) on a new factory as it builds a lithium-ion business from scratch; and the US economic stimulus bill is offering billions of dollars of support for US makers of advanced batteries.
Some analysts say large lithium-ion batteries could become a commodity within five years.
“Of course there is a risk of oversupply and falling prices,” said Mr Yoda. But if low-carbon vehicles became significant, “no one company will be able to make enough batteries”.
For example, GS Yuasa’s joint venture with Mitsubishi Motors is building a factory that can supply 200,000 lithium-ion battery cells a year, but that would be enough to power only about 2,000 electric vehicles.
The Japanese company is also setting up a joint venture with Honda to supply lithium-ion batteries to hybrid electric vehicles, similar to the Toyota Prius, that also use a conventional engine.
GS Yuasa will own 51 per cent of both joint ventures.
Mr Yoda said that if other carmakers wanted GS Yuasa lithium-ion batteries they should expect to buy from those two ventures.
“If we set up another joint venture it would scatter our people and capital. So, if possible, we want to supply from the existing two,” he said.
In the meantime, the slump in global car sales is hurting GS Yuasa’s main business of conventional car batteries, for which it has the largest share of the Asian market.
Sales for the year to March 2009 are expected to be Y300bn, down 4 per cent on last year, but the company still forecasts a net profit of Y4bn.
GS Yuasa has numerous plants in south-east Asia, where the downturn in the car market started early. Mr Yoda said the region was recovering slowly.
“I think today’s terrible conditions won’t continue for so long.”
Even if the car market improved, a wider economic recovery would take longer, Mr Yoda said.
Copyright The Financial Times Limited 2009

US Dollar crash Alert: daily chart is Broken. DXY, HUI, XAU, GDX, SLW, TNR.v, RMK.v, SST.v, OK.v, SBB.v, MGN, CGH.to, FVI.v, ASM.v, GBN.v

We have a very strong Bearish Inverted Hammer in today's trading, all momentum indicators turned negative. US Dollar chart has Breaking Down confirming Second Double Top reversal. We do not know why we have this change of heart particularly now, maybe actions of Swiss National Bank has spark intervention from FED as well. Japanese are definitely in the market trashing Yen down the pipe, now FED can not hold it any longer and will push US Dollar down, below 86 it will collapse with news on recent Deficit number for February which were played down by Bubble Media. Does the world finally awaken to US Corp fundamentals and will sell common stock US Dollar?

U.S. February Budget Deficit Widened as Revenue Fell (Update1)

By Timothy R. Homan
March 11 (Bloomberg) -- The record U.S. budget deficit widened further in February as a shrinking economy cut income-tax payments by companies and individuals.
The excess of spending over revenue rose to $192.8 billion, still less than economists forecast, compared with a gap of $175.6 billion in the same month a year earlier. Spending was little changed at $280.1 billion, and revenue dropped 17 percent to $87.3 billion. Corporate tax revenue in the past five months has plunged 45 percent from a year earlier.
The deficit five months into the 2009 fiscal year already exceeds the record set in the entire previous year. Rising foreclosures and 14 straight months of job losses are cutting tax receipts while the government commits hundreds of billions of dollars of taxpayer funds to bolster the economy, now in its second year of recession.
“The budget balance has deteriorated badly,” Steven Wood, president of Insight Economics LLC in Danville, California, wrote in a note to clients. “The budget deficit for fiscal year 2009 will rocket higher.”
Before today’s report, economists in a Bloomberg News survey forecast a February deficit of $205 billion. The median estimate was based on projections from 31 economists.
During the first five months of fiscal 2009, which began Oct. 1, the country’s deficit swelled to a record $764.5 billion for the period, compared with a $265 billion shortfall during the same period a year earlier.
Corporate Taxes
Corporate tax receipts totaled $52.8 billion through February, down from $96.9 billion in the first five months of fiscal 2008, the Treasury said. Individual income tax collections were down 13 percent so far this fiscal year, totaling $388.5 billion through February compared with $446.9 billion in the year-earlier period.
“The country faces grave challenges, both in terms of its short-term economic health and its long-term fiscal future, and working our way out of these difficulties will not happen overnight,” Peter Orszag, director of the White House’s Office of Management and Budget, told Congress yesterday. “Our economy is in a deep recession, which threatens to be more severe than any since the Great Depression.”
The deficit in 2008 totaled a record $459 billion. The White House’s Office of Management and Budget projects a $1.5 trillion deficit this year, or 10.6 percent of gross domestic product, Orszag said.
In other categories, spending by the Social Security Administration rose 7.2 percent to $290.1 billion for the fiscal year to date; spending by the Department of Health and Services, which administers the Medicare and Medicaid health programs, rose 9.1 percent to $319.6 billion and spending by the Defense Department rose 7.5 percent to $267.5 billion.
President Barack Obama today signed into law a $410 billion spending bill that includes an overall 8 percent budget increase for some federal agencies and thousands of congressional pet projects. The measure provides funding for most government operations through Sept. 30.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

Inflation watch. Wait for US Dollar to move: Swiss intervention sparks talk of ‘currency war’. DXY, GDX, HUI, XAU, SLW, TNR.v, RMK.v, GBN.v, CGH.to

Just wait until competition who will print more money begins: the only way out of piles of debt is to water it down by Inflation.

"The Swiss National Bank sparked talk of a global currency war on Thursday as it surprised investors by intervening to bring down the Swiss franc.
The Swiss franc’s safe-haven status has been heightened by recent market turmoil, pushing it close to its record high around SFr1.43 against the euro in the past few weeks.
But the franc fell to its lowest level this year after the Swiss National Bank said the currency’s strength represented an “inappropriate tightening of monetary conditions” as it battled against a slowdown in the Swiss economy.
“In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market to prevent any further appreciation of the Swiss franc against the euro,” the central bank said.
The central bank said it had implemented its decision, with traders confirming that the SNB had been active in the market, selling the Swiss franc against the euro and the dollar.
This represented the first time a leading central bank has intervened in the foreign exchange markets since 2004, when the Bank of Japan sought to weaken the yen.
The franc dropped 2.6 per cent to SFr1.5192 against the euro and dropped 3.2 per cent to $1.1894 against the dollar.
Analysts said the move was likely to increase talk of a bout of competitive currency devaluation in the face of the current financial crisis.
“Let the currency wars begin,” said Chris Turner at ING Financial Markets. He said countries around the world faced with the constraint of zero interest rate levels might now think it acceptable to intervene formally to weaken their currencies, in order to ease monetary conditions.
“Of course, those with higher export shares in GDP will have monetary conditions more sensitive to FX rates. Japan will probably be at the head of the queue,” Mr Turner said.
The SNB said economic conditions had deteriorated sharply since its last policy meeting in December and that there was a risk of deflation over the next three years.
“Decisive action is thus called for, to forcefully relax monetary conditions,” the central bank said.
The SNB also cut its interest rates by 25 basis points, taking its three-month Libor target range down to 0-0.75 per cent.
It also announced plans to adopt a quantitative easing approach to monetary policy, saying it would increase liquidity substantially by engaging in additional repo operations and buying Swiss-franc denominated bonds issued .
Analysts said the move towards quantitative easing was sparked by drastic changes in the central bank’s forecast for growth, which is now expected to fall between 2.5 per cent and 3 per cent in 2009, much worse than its previous forecast of a drop of between 0.5 and 1 per cent."