Posted at 11:59 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

My porch with three more days of snow predicted.

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Jim Sinclair’s Commentary

Do these two gentlemen look happy? This picture was taken yesterday after a frank discussion.

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Jim Sinclair’s Commentary

Chair Yellen: Are you paying attention as your economic recovery looks poor?

ISM Manufacturing Tumbles To 13-Month Lows, Employment Slumps, Construction Spending Plunges
Submitted by Tyler Durden on 03/02/2015 10:08 -0500

Despite a collapse in US macro data in February, Markit somehow managed to conjure a better than expected 55.1 print for US Manufacturing PMI. Under the covers employment creation was the slowest since July and inflationary pressures loom as selling prices rose notably. ISM Manufacturing printed 52.9 – a small miss vs 53.0 expectations – down for the 4th month in a row to 13-month lows, with employment at its weakest since June 2013. Construction spending’s modest rebound in (seemingly un-weather-affected) December (after dropping in November) has been destroyed with a 1.1% drop in January (against expectations of 0.3% rise) for the biggest drop in 8 months.

Spot The Odd One Out – one of these is a soft survey… the other summarizes US macro hard data into one variable…

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Doesn’t exactly look like a ‘recovery’ in manufacturing based on the jobs created…

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Jim Sinclair’s Commentary

GOTS means get out of the system while you still can.

"Spectacular Developments" In Austria: Bail-In Arrives After €7.6 Billion Bad Bank Capital Hole "Discovered"
Tyler Durden on 03/01/2015 19:59 -0500

Slowly, all the lies of the "recovery", all the skeletons in the closet, and all the bodies swept under the rug are emerging.

Moments ago, Austrian ORF reported that there have been "spectacular developments" in the case of the Hypo Alpe Adria bad bank, also known as the Heta Asset Resolution, where an outside audit of Heta’s balance sheet exposed a capital hole of up to 7.6 billion euros ($8.51 billion) which the government was not prepared to fill, the Austrian Financial Market Authority said.

As a result, according to Reuters, the bad bank that was created in the aftermath of the Hypo collapse, is itself about to be unwound, as the bad bank itself goes bad!

"Austria’s Financial Market Authority stepped in on Sunday to wind down "bad bank" Heta Asset Resolution and imposed a moratorium on debt repayments by the vehicle set up last year from the remnants of defunct lender Hypo Alpe Adria."

In short: Austria just cut off state support of what was until this moment a state-backed, wind-down vehicle and a key pillar of trust in what was already a shaky financial system.

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Jim Sinclair’s Commentary

Now this is downright tempting for a man that made 35 OTC markets in 1954.

Meanwhile, Over At The "New York" Stock Exchange… Lasers
Tyler Durden on 03/02/2015 07:22 -0500

The last time we looked at the most important tower in the world, about 4 months ago, it looked as follows:

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The tower in question is the primary microwave relay into the ill-named "New York" Stock Exchange which actually is located just off MacArthur Boulevard and Route 17 in Mahwah, New Jersey, and in our opinion is the "most important tower" in the world, because without it, the financial industry, which these days means a few hundred thousands HFT algos and their math PhD creators, would grind to a halt as suddenly trading would revert back to the "caveman days" of 2007, when one actually traded not just to frontrun a whale order in some dark pool half way around the world, but actually cared about such things as "fundamentals" and "reality" (oh, and there wasn’t some $12 trillion in cental bank created liquidity supporting every asset class).

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Jim Sinclair’s Commentary

A picture is worth a thousand words. If that is the case, then thanks to WilliamBanzai7 this is worth 10,000 words.

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David Stockman Warns "It’s One Of The Scariest Moments In History"
Submitted by Tyler Durden on 03/01/2015 22:45 -0500

"The Fed is out of control," exclaims David Stockman – perhaps best known for architecting Reagan’s economic turnaround known as ‘Morning in America’ – adding that "people don’t want to hear the reality and the truth that we’re facing." The following discussion, with Harry Dent, outlines their perspectives on the looming collapse of free market prosperity and the desctruction of American wealth as policymakers "take our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that’s been built up and created by the American people over decades and decades." The Fed, Stockman concludes, "is a rogue institution," and their actions have led us to "one of the scariest moments in our history… it’s a festering time-bomb and we’re not sure when it will explode."

Full Discussion:

Full Transcript here.

Key Excerpts from the detailed interview:

David Stockman: People don’t want to hear the reality and the truth that we’re facing. But I think there is an enormous appetite out in the country to get a different perspective than what you have from the media day in and day out, so I say the fed is out of control. Its balance sheet is exploded. It’s printing money like never before.

Zero interest rates for 70 months have basically destroyed the pricing function in the financial markets. I said that as a result of this, Wall Street has become a huge casino which basically rewards gamblers, but it is not functioning as a capital raising, capital allocating instrument, which really is what the financial markets should do in a free market system. I warned about the size of the federal debt. I’m an old budget director from the Reagan days. We had a trillion dollar national debt, a 3 trillion economy when I started. Today, it’s 18 trillion. Eighteen fold gain in the last 35 years versus maybe a fourfold gain in the economy. So all of these trends are taking our economy in a direction that is dangerous, that is not sustainable, and is likely to fully undermine everything that’s been built up and created by the American people over decades and decades.

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Jim Sinclair’s Commentary

Pensions are a great target for all governments with too much debt, the USA included. That is to borrow from them which means assets out, and government paper in.

As Greek Default Fears Return, Government Considers "Borrowing" Pensions To Repay IMF
Submitted by Tyler Durden on 03/02/2015 14:54 -0500

Greek short-term default risk jumped over 300bps today putting the odds of a restructuring at 50-50 within the next year as the warnings we issued last week with regard Greece’s imminent default on its IMF loan loom. Seeking to reassure its lenders (and avoid yet more capital flight), Reuters reports the Greek government said it was "exploring solutions," including delaying payments to suppliers or try to raise up to 3 billion euros by borrowing from state entities such as pension funds.

As Reuters reports, Athens is running out of options to fund itself despite striking a deal with the euro zone in February to extend its bailout by four months. Faced with a steep fall in revenues, it is expected to run out of cash by the end of March, possibly sooner.

"The Greek government has been exploring solutions … to ensure there won’t be a single problem with repaying the IMF loan, or its funding obligations in March," Government Spokesman Gabriel Sakellaridis told Greek radio.

So far, Athens’s other funding options have stumbled upon problems. Transferring 1.9 billion euros worth of profits the European Central Bank made on buying Greek bonds will not be allowed until Greece has completed promised reforms.

Another option is the issuance of additional Treasury bills, but Athens’s EU/IMF lenders have set a 15 billion euro cap on such debt and it has already been reached.

On Wednesday, Athens will go ahead with a regular six-month T-bill auction of 875 million euros to refinance a maturing issue, in a sale that will be closely watched as the government faces a possible funding gap.

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Jim Sinclair’s Commentary

It is simply nuts to speak about voluntarily raising interest rates when there are systemic problems of this nature.

California Rental Armageddon: Nearly half of Los Angeles adults doubling up, working class moving out, or you have the option of simply living in poverty.

California like the rest of nation has gained a large number of rental households.  Many of these households were formed from the ashes of the 1 million completed foreclosures.  Over the last ten years the nation has lost 1 million net homeowner households and has gained a whopping 10 million rental households.  L.A. County with roughly 10 million residents is predominately a renter county.  Over the last ten years the large gain in California households has come in the form of rentals.  Maybe you find living with roommates deep into your 30s and 40s as awesome or maybe you enjoy living a Spartan lifestyle just so you can pay your monthly rent while hearing helicopters overhead in your hipster neighborhood.  Every piece of research simply shows that people are being pushed into spending more money on housing.  Some say move out.  Well guess what?  Many middle class Californians are doing just that.  The rental and housing market has gone into full on financial Armageddon mode yet in typical California fashion, the sun keeps glowing brightly.  Ironically over time people think it is normal to dump every nickel you have into housing.  Let us look at three trends impacting the rental market in California.

Moving out

The urge to buy real estate is a deeply rooted American concept, although Millennials might be changing their tune.  For the majority of the country, buying a home is a simple endeavor.  With your typical house costing $200,000 and with low interest rates, simply having the median household income is good enough to not have your home consume every penny of your income.  But in California, we have $700,000 crap shacks that look as if a two-year old developed it in their first art experiments.  In the last couple of years, there is a vocal group saying “hey, if you can’t make it in California get out!”  Apparently some people are listening to this:

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Posted at 11:42 AM (CST) by & filed under Jim's Mailbox.

Jim,

If only 50% of this is true, it is still very scary.

CIGA LarryM.

Al-Qaida planning kamikaze attacks on ships in Mediterranean, cables claim
Leaked document from Russian intelligence agency claims north African branch wants to extend its range to Europe with marine unit
Seumas Milne and Ewen MacAskill
Wednesday 25 February 2015 13.48 ESTLast modified on Thursday 26 February 2015 11.31 EST

Al-Qaida has developed a seaborne unit to attack targets around the Mediterranean, according to a confidential report from Russian intelligence, one of a cache of secret documents from spy agencies around the world tracking jihadi terrorist groups.

According to the Russians, North African al-Qaida (Aqim – al-Qaida in the Islamic Maghreb) has established a 60-strong team of suicide bombers to plant mines under the hull of ships and to use small, fast craft for kamikaze attacks.

The claim, in a leaked document from Russia’s Federal Security Service (FSB), is one of a string of reports on the rise of Islamic State (Isis) and al-Qaida.

They include a two-month briefing by Omani intelligence estimating that Isis now has up to 35,000 fighters and an income of $1.5m (£1m) a day, reports from United Arab Emirates agents about the Isis leadership structure and a dossier from Jordanian intelligence on confessions extracted from terrorist suspects.

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Jim,

The template is in motion, The G20 agreement (AKA Bailed-In) this year has been ruled into adoption for FAILED INSTITUTIONS and of course it happens on a weekend.

Guess who the creditors are of this bank?

Excerpt:
"The finance ministry noted that creditors can be forced to contribute to the costs of winding down Heta – or "bailed in" – under new European legislation that Austria adopted this year so that taxpayers do not have to shoulder the entire burden."

Click here to read the full article…

CIGA Perry

Perry,

An unsecured creditor of a bank is defined as a depositor in the bank.

Respectfully yours,
Jim

Posted at 11:34 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mario, where are you?

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Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- Downside GDP Revision Reflected Corrections to Excess Inventory Levels 
- Downside Revisions Loom for Historic GDP Growth 
- First-Quarter 2015 Economic Outlook Is Troubled

"No. 700: Fourth-Quarter 2014 GDP, First Revision" 
Web-page: http://www.shadowstats.com

Gold Imports by India Seen Surging as Jaitley Retains Record Tax
Sunday, 01 Mar 2015 03:21 PM

Gold imports by India, the world’s biggest consumer, are poised to surge after Finance Minister Arun Jaitley belied industry expectations for a reduction in tax.

Overseas purchases may jump to 100 metric tons in March from about 25 tons in February as jewelers and traders, who delayed purchases in anticipation of the tax cut, replenish stockpiles, Rajesh Mehta, chairman of Rajesh Exports Ltd., said by phone from Bengaluru on Feb. 28. Domestic demand will also increase as retail buyers return to the market, he said.

The revival in Indian demand may help gold prices in London to extend the first weekly gain in five and spur smuggling. Jaitley retained the duty at a record 10 percent in the budget on Feb. 28, while announcing plans to tap a part of the 20,000 metric tons of locally stockpiled gold to lower reliance on imports. Seven of the 10 jewelers and analysts surveyed by Bloomberg in February had predicted a tax cut.

“Imports will pick up in March because in the past one month there wasn’t much imports,” Mehta said. “Everyone was waiting for the duty changes.”

The tariff is the last of the import restrictions imposed in 2013 to contain a record current-account deficit that drove the rupee to an all-time low. The deficit has narrowed with the plunge in crude oil, helping the rupee rebound and allowing Jaitley to ease controls on shipments.

“With Akshaya Tritiya festival around the corner, imports will only rise next month,” Mehul Choksi, chairman of Gitanjali Gems Ltd., said by phone from Mumbai on Feb. 28.

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Jim Sinclair’s Commentary

Let me recall. When was the last time I heard these exact words? I know. It was when I was just in grammar school and the nun had our entire class practicing how to get under our desks if there was a nuclear attack, which was anticipated by everyone. You think the clock is turning backwards?

Russia ready to repel any nuke strike, retaliate – missile forces command chief
Published time: March 01, 2015 14:09

Russia’s Strategic Missile Forces are ready to react to any nuclear strike even if it is lightning fast, SMF Central Command chief said. A retaliatory strike would take place in all circumstances, “without hesitation,” he added.

“If there’s a challenge to repel a lightning-fast nuclear in any given conditions – it will be done in fixed time, that’s dead true,” the Strategic Missile Forces Central Command’s chief, Major-General Andrey Burbin, told Russian News Service on Saturday.

Russia’s strategic missile forces are positioned geographically in such a way that no global strike can knock them out completely, Burbin said.

In case an order is given to carry out a nuclear strike, Russian nuclear weapons operators will fulfill it, he added.

“There would be no hesitation, the task would be executed,” he said.

The unavoidability of a retaliatory nuclear strike from Russia is also guaranteed by the fully automatic and constantly modernized ‘Perimeter’ system, also known as “Dead hand.”

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A Tale of Two Cities:

 

Chicago, IL

 

Houston, TX

 
         

Population

2.7 million

 

2.15 million

 
         

Median HH Income

$38,600

 

$37,000

 
         

% African-American

38.9%

 

24%

 
         

% Hispanic

29.9%

 

44%

 
         

% Asian

5.5%

 

6%

 
         

% Non-Hispanic White

28.7%

 

26%

 
         
                 

Pretty similar until you compare the following:

 

Chicago, IL

 

Houston, TX

 
         

Concealed Carry – Legal

No

 

Yes

 
         

# of Gun Stores

None

 

184 Dedicated gun stores plus 1500 – legal places to buy guns–Wal-Mart, K-mart, sporting goods, etc.

 
         

Homicides, 2012

1,806

 

207

 
         

Homicides per 100K

38.4

 

9.6

 
         

Avg. January high temperature  (F)

31

 

63

 
         

Liberal Conclusion: Cold weather causes murders. This just has to be due to global warming.

Posted at 4:08 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

The Telegraph makes a point that is a no-no to most MSM.

The global financial system stands on the brink of second credit crisis
The world financial system stands on the brink of a second credit crisis as interbank lending shows increasing risk
By John Ficenec

The world economy stands on the brink of a second credit crisis as the vital transmission systems for lending between banks begin to seize up and the debt markets fall over. The latest round of quantitative easing from the European Central Bank will buy some time but it looks like too little too late.

It was the collapse of US house prices back in 2007 that resulted in the seizure of the credit markets and banking crisis of 2008. And it would be easy to lay the blame for the 2008 financial crisis at the doorstep of American home owners, easy but wrong. The collapse of the US housing market was not the cause of the crisis, it was merely a symptom of the more insidious ills of cheap credit, low risk and the promise of another bailout round the corner.

The Keynesian pump priming that has taken place on a colossal scale across the world is failing. The Chinese economy was growing at 12pc in 2010, but that slowed to 7.7pc in 2013 and 7.4pc last year — its weakest in 24 years. Economists expect Chinese growth to slow to 7pc this year. It is the once booming property sector that has turned into a bust, and is now dragging down the wider economy as the bubble deflates.

The second global credit crisis is now already unfolding in China some 6,800 miles away from the epicentre of the first in the US. The bonds of Chinese real estate companies are now falling like dominoes. Kaisa, a Shenzhen-based, Hong Kong-listed developer that raised $2.5bn on international markets had to be bailed out by rival group Sunac last week after it defaulted onits debts. The bonds of other Chinese real estate groups such as Glorious Property and Fantasia have also sold off heavily as the contagion spreads.

Chinese authorities have responded to try and contain the situation. The People’s Bank of China introduced a surprise 50-point cut in the Reserve Requirement Ratio (RRR) from 20pc to 19.5pc. But this misses the point, the credit system in China is completely unsustainable unless new money is printed every year to refinance the old, simply tinkering to ease liquidity won’t cut it.

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Jim Sinclair’s Commentary

As the gold market grows, so does the competition for the fiddlers.

SGE plans yuan-denominated gold fix
People close to the matter say the exchange plans to start a yuan-denominated gold fix this year.
Bloomberg News | 27 February 2015 15:39

The Shanghai Gold Exchange plans to start a yuan-denominated gold fix this year, according to people with knowledge of the matter.

The price-setting mechanism will be linked to the SGE’s one kilogram (32.2 ounces) contract and will be open to foreign banks and traders, said the people, who asked not to be identified because the plans haven’t been made public. The exchange wants the fix to be used a global benchmark for gold priced in the Chinese currency.

China is trying to ensure its influence on commodity prices matches its significance as an importer and user of raw materials. The country is the second-largest consumer of gold and oil and the biggest user of industrial metals and iron ore. The 95-year-old London gold fixing mechanism, a global benchmark, is being overhauled this year.

“There is real demand from Chinese users, as a major global consumer, to have their own benchmark,” said Helen Lau, a Hong Kong-based analyst at Argonaut Securities Asia Ltd. “A China gold fixing makes sense to the domestic industry.”

China lost its spot as the world’s biggest bullion buyer to India last year as global demand slid 4 percent to a five-year low, according to the World Gold Council.

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Posted at 4:04 PM (CST) by & filed under Jim's Mailbox.

Jim,

I don’t know if you’ve heard this interview. Maguire is discussing the new physical market the Chinese have developed and are using now. They are about to go public with the info in early March.

What caught my interest starts at the 6:45 mark of the interview. Apparently the new exchange would allow Miners to directly deposit the refined product into the system bypassing the bullion banks.

He only talks briefly about it so I have no details, however it does sound like an interesting concept to possibly follow up on.

CIGA Jeff

Click here to listen to the interview…

 

Jim,

I read former Fed Chairman Paul Volcker’s biography.

He could have left public service and made millions. Instead he went into hock, so to speak, earning only $57,000 as Fed Chairman.

The travails of his life, weighted down further by lack of money, can bring tears to your eyes. Yet his ethics and integrity remained beyond reproach.

"VolCker credited his father with instilling in him a sense of the importance of public service, as manifested by a sign on his father’s desk:

‘You go into public service for public good, not private gain.’ This ethic was to become part of Volcker’s life".

I have 3 heroes in my life: Abe Lincoln, Wyatt Earp, and of course Paul Volcker.

Which brings me to the article below. Where have all the heroes gone?

CIGA Wolfgang Rech

Why Does Maryland Have The Most Millionaires Per Capita? The Answer Might Make You Angry
Submitted by Tyler Durden on 02/27/2015 14:53 -0500

Submitted by Michael Snyder via The Economic Collapse blog,

The fat cats in Washington D.C. are living the high life, and they are doing it at your expense.  Over the past decade, there has been one area of the country which has experienced a massive economic boom.  Thanks to wildly out of control government spending, the Washington D.C. region is absolutely swimming in cash.  In fact, at this point the state of Maryland has the most millionaires per capita in the entire nation and it isn’t even close.  If you have never lived there, it is hard to describe what the D.C. area is like.

Every weekday morning, hordes of lawyers, lobbyists and government bureaucrats descend upon D.C. from the surrounding suburbs.  And at the end of the day, the process goes in reverse.  Everyone is just trying to get their piece of the pie, and it is a pie that just keeps on growing as government salaries, government contracts and government giveaways just get larger and larger.  Of course our founders never intended for this to happen.  They wanted a very small and simple federal government.  Sadly, today we have the most bloated central government in the history of the planet and it gets worse with each passing year.

If you were to ask most Americans, they would tell you that the wealthiest Americans probably live in cities such as New York or San Francisco.  But thanks to the Obama administration (and before that the Bush and Clinton administrations), the state of Maryland is packed with millionaires.  In particular, the Maryland suburbs immediately surrounding D.C. are absolutely overflowing with government fat cats that make a living at our expense.  Every weekday morning, huge numbers of them leave their mini-mansions in places such as Potomac and Rockville and drive their luxury vehicles to work in the city.  As the Washington Post has detailed, at this point approximately 8 percent of all households in the entire state of Maryland contain millionaires, and the rest of the area is not doing too shabby either…

In Maryland, nearly 8 out of every 100 households in 2014 had assets topping $1 million, giving the state more millionaires per capita than any other in the country, according to a new report from Phoenix Marketing International.

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Hi Jim,

If the Indians implement this strategy will it succeed, or be attacked by the other central banks?

"Though stocks of gold in India are estimated to be over 20,000 tonnes, mostly this gold is neither traded, nor monetised, the Finance Minister said.

He also proposed to develop an alternate financial asset, a Sovereign Gold Bond, as an alternative to purchasing metal gold.

“The bonds will carry a fixed rate of interest and also be redeemable in cash in terms of the face value of the gold, at the time of redemption by the holder of the bond,” he said. ”

Cheers,
CIGA Gary

Gary,

Gold is deep in the heart and soul of India. They just might plow forward as Western Central Banks now have the Brics to contend with. The reset will start amongst the Brics.

Jim

Union Budget 2015-16 proposes steps to monetise gold, contain imports

To curb gold imports and monetise large idle stocks of the precious metal, Finance Minister Arun Jaitley on Saturday announced three schemes, including redeemable gold bonds which will carry a fixed rate of interest.

The Minister proposes to introduce a gold monetisation scheme, which will replace both the present gold deposit and gold metal loan schemes.

“The new scheme will allow the depositors of gold to earn interest in their metal accounts and the jewellers to obtain loans in their metal account. Banks/other dealers would also be able to monetize this gold,” Mr. Jaitley said in his Budget speech.

India is one of the largest consumers of gold in the world and imports as much as 800-1,000 tonnes of gold each year.

Though stocks of gold in India are estimated to be over 20,000 tonnes, mostly this gold is neither traded, nor monetised, the Finance Minister said.

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Jim,

If there was any question on the connection between Russia and China, this story should dispel any doubts of where their interests lay.

CIGA LarryM

Ukraine crisis: Top Chinese diplomat backs Putin and says West should ‘abandon zero-sum mentality’
China’s ambassador to Belgium said Russia’s security concerns are legitimate
Zachary Davies Boren
Friday 27 February 2015

China has voiced its support for Russia’s handling of the Ukraine crisis, with prominent diplomat Qu Xing calling on the West to "abandon its zero-sum mentality".

According to state news agency Xinhua, the Chinese ambassador to Belgium said the West should take "the real security concerns of Russia into consideration".

Qu said the "nature and root cause" of the crisis was the "game" between Russia and western powers the United States and EU, and that a change of approach is required to resolve it.

After nearly a year of relative silence on the subject, China’s intervention is striking, not least because it comes just as harsher sanctions against Moscow are being discussed.

More…

Jim,

This is spooky! Soon they will mandate the wearing of certain chips.

CIGA Dr. K.

Microchip hand implants offered to Swedish office staff – video

Posted at 5:55 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- First-Quarter Economic Contraction Indicated by Retail Sales and Durable Goods Orders
- Headline January Real-Retail Sales Still Fell by 0.1% (-0.1%), On Top of the Monthly Plunge of 0.7% (-0.7%) in the CPI-U
- Home Sales Activity Remained Heavily Stressed
- Unchanged before Inflation, Real Average Weekly Earnings Gain Was Due to Headline Plunge in CPI-W Inflation
- January Year-to-Year Inflation: -0.1% (CPI-U), -0.8% (CPI-W), 7.5% (ShadowStats)
- Average Oil and Gasoline Prices Increased in February

"No. 699: January CPI, Real-Retail Sales and Earnings, Durable Goods, Home Sales"
Web-page: http://www.shadowstats.com

Jim Sinclair’s Commentary

Yes, soon it will cost you to have a bank deposit even in the weakest as well as strongest currencies.

How Much Will You Pay to Park Cash as Central Banks Go Negative?

Sweden’s Riksbank says it’s open to further reductions, while the Swiss and Danes may be forced into them if their currencies threaten to climb.

The Bank of England has said it no longer views 0.5 percent as a floor for its benchmark, while Barclays says the Bank of Japan could switch to negative rates if it needs more stimulus amid concerns over the size of its balance sheet and the diminishing power of quantitative easing.

Citigroup said Friday that the ECB may cut its deposit rate as low as minus 50 basis points from the current minus 20 basis points if growth prospects fail to improve.

“It is clear that the ‘zero lower bound’ is much less of a constraint than was widely assumed,” Michael Pearce, an economist at Capital Economics in London, said in Thursday’s report. “We are in uncharted territory and nobody knows where the lower bound really lies.”

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Jim Sinclair’s Commentary

The Gold market is going through significant changes that will offer competition to the paper hangers.

China plans yuan-denominated gold fix this year: sources
27 Feb4:15 PM

[SINGAPORE] China plans to launch a yuan-denominated gold fix this year to be set through trading on an exchange, sources familiar with the matter said, as the world’s second-biggest bullion consumer seeks to gain more say over the pricing of the precious metal.

The Chinese benchmark would be derived from a new 1 kg contract to be launched on the state-run Shanghai Gold Exchange, a senior source directly involved in the process told Reuters.

China, also the top producer of gold, feels its market weight should entitle it to be a price-setter for bullion and it is asserting itself at a time when the established benchmark, the century-old London fix, is under scrutiny because of alleged price-manipulation.

If the Chinese fix takes off, it could add to the pressure on the London benchmark, which is used worldwide by producers, refiners and central banks to price holdings and contracts, although the two could exist side-by-side. "We need a renminbi benchmark for Chinese producers and foreign suppliers to the market," said the source, using an alternative name for the yuan. "This renminbi gold benchmark can be complementary to the US dollar gold-fixing in London." The contract for the Chinese fix would be traded for a few minutes each day to make the process transparent – addressing one of the big complaints about the London fix – and the exchange would settle all trades, the source said.

One barrier to wider international acceptance is that the yuan is not fully convertible.

A second source with a global bullion bank said trading and settlement could be done in offshore yuan to allow foreign banks and other suppliers to participate, although only domestic players are expected to participate initially.

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Jim Sinclair’s Commentary

Sharps Pixley has not distinguished itself as positive on gold often. Therefore this is a good as it gets.

Gold Getting Support from Rising Physical Demand and Euro QE

The U.S. Comex gold futures rebounded over one percent in the past two days to $1,210.10 on Thursday while the Dollar Index also rose 0.85% and the Euro/Dollar plunged 1.25% in the same period. This week, the Euro Stoxx 50 Index jumped 2.42% while the S&P 500 Index was flat and the crude oil futures were down 4.31%. The U.S. ten-year Treasury yield fell 8bp this week to 2.03% on Thursday while the ten-year German Bund yield fell 4bp to 0.323%.

Focusing on Inflation
The Dollar Index has strengthened on the back of a stronger than expected core inflation data in the U.S of 0.2% in January. The Fed chairman also expects that the inflation will climb towards the Fed’s two percent target as the short-term decline in inflation due to oil price plunge is transitory. According to Bloomberg, the market sees a 60% chance that the Fed will raise rates in October this year. In Japan, the consumer prices excluding food rose 2.2% year-on-year in January. However, the core inflation slowed to 0.2% and the inflation-adjusted wages fell 1.7% in December, raising the fear that Japan will fall into deflation again. In Europe, Germany’s February unemployment number fell more than expected by 20,000 while the Q4 GDP growth accelerated and the sentiment in Europe improved. The launch of the Euro QE will likely support the gold prices near-term.

Rising Physical Demand
The gold prices have been supported by rising physical demand from China. Its net imports from Hong Kong rose 12.8 metric tons in January to 71.6 metric tons while gold futures trading in the Shanghai Gold Exchange, the world’s largest physical gold exchange, rose for the second day after the end of the Chinese New Year holidays. Later this year, a gold link-up is likely between Hong Kong and Shanghai following the successful launch of the stock link-up late last year.

What to Watch
We will monitor India’s 2016 budget this Saturday for any signs of the gold import duty cuts. We will also watch China’s February NBS manufacturing PMI Index on 1 March, the Eurozone January unemployment rate, the U.S. February ISM manufacturing index, and the U.S. January core PCE price index on 2 March, the U.S. February ADP private payrolls on 4 March and the Bank of England and the ECB interest rate and asset purchase decisions on 5 March as well as the U.S. January trade balance, the February non-farm payrolls, and the unemployment rate on 6 March.

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Pending Home Sales Miss For 5th Month In A Row
Tyler Durden on 02/27/2015 10:15 -0500

Despite a modest 1.7% rise (after dropping 1.5% in December), Pending Home Sales missed expectations of a 2.0% rise – the 5th monthly miss in a row.

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It appears NAR’s chief economist Lawrence Yun, whose specialty is revising the script to goalseek any desired outcome until the deviation from reality is so massive the NAR has no choice but to do a massive backward-looking revision, has flip-flopped yet again: On existing home sales, NAR blamed the drop on lack of supply (bizarrely, just as prices dropped at the same time ) while on pending home sales, NAR says buyers overcame lack of supply.

To wit:

Lawrence Yun, NAR chief economist, says for the most part buyers in January were able to overcome tight supply to sign contracts at a pace that highlights the underlying demand that exists in today’s market. “Contract activity is convincingly up compared to a year ago despite comparable inventory levels,” he said. “The difference this year is the positive factors supporting stronger sales, such as slightly improving credit conditions, more jobs and slower price growth.”

At least he didn’t blame snow in the seasonally-adjusted winter like he did for months in a row one year ago. Then again, there is always February…

In the meantime, the narrative spin must go on:

Yun also points to more favorable conditions for traditional buyers entering the market. All-cash sales and sales to investors are both down from a year ago1, creating less competition and some relief for buyers who still face the challenge of limited homes available for sale.

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Jim Sinclair’s Commentary

Apple diversified its huge cash. Apple, Russia ,India and China should pretty well make a dent in the physical gold market.

Apple buying a third of world’s gold to meet demand for iWatch
Cecilia Jamasmie | February 26, 2015

Technology giant Apple (NASDAQ:AAPL) may soon buy up one third of the world’s gold in order to meet the demands of its highly anticipated Apple Watch, according to reports.

Interest in the high-end model, featuring 18-karat gold casing, is picking up and the firm is already taking the necessary steps to have enough of them in stock. According to WSJ.com, Apple plans to start producing more than one million units per month in the second quarter of the year, anticipating high demand from Asian markets, mainly China.

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This Apple Watch could cost as much as 10 iPads.

Josh Centers, from TidBits, estimates that each gold watch will contain 2 troy ounces (62.2 grams) of gold. So, based on the estimated sales figure, he concludes that Apple will need 746 tons of gold a year, or about 30% of the world’s annual production.

His estimations — admittedly based on the Wall Street Journal predictions, not official figures — would mean that Apple may soon become a major player in the world’s luxury watch market, grabbing about half of it.

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Jim Sinclair’s Commentary

Speaking out is becoming more dangerous everywhere.

Attackers in Bangladesh hack to death American blogger
Posted: Feb 27, 2015 9:49 AM ESTUpdated: Feb 27, 2015 9:57 AM EST
By JULHAS ALAM

DHAKA, Bangladesh (AP) — A prominent Bangladeshi-American blogger known for speaking out against religious extremism was hacked to death as he walked through Bangladesh’s capital with his wife, police said Friday.

The attack Thursday night on Avijit Roy, a Bangladesh-born U.S. citizen, occurred on a crowded sidewalk as he and his wife, Rafida Ahmed, were returning from a book fair at Dhaka University. Ahmed, who is also a blogger, was seriously injured. It was the latest in a series of attacks on secular writers in Bangladesh in recent years.

A previously unknown militant group, Ansar Bangla 7, claimed responsibility for the attack, Assistant Police Commissioner S.M. Shibly Noman told the Prothom Alo newspaper.

Roy "was the target because of his crime against Islam," the group said on Twitter.

Roy was a prominent voice against religious intolerance, and his family and friends say he had been threatened for his writings.

About 8:45 p.m. Thursday, a group of men ambushed the couple as they walked toward a roadside tea stall, with at least two of the attackers hitting them with meat cleavers, police Chief Sirajul Islam said. The attackers then ran away, disappearing into the crowds.

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Posted at 4:56 PM (CST) by & filed under Jim's Mailbox.

Jim,

Gives new meaning to the East-West Game. Russia/China vs. USA/Europe.

I wonder where they’ll have their bowl game? Hawaii?

Actually a better idea than what they’re doing now… destroying the world.

CIGA Wolfgang

China Just Sided With Russia Over The Ukraine Conflict
Submitted by Tyler Durden on 02/27/2015 – 14:25

Few asked throughout the Ukraine civil war is just whose side is China leaning toward, after all the precarious balance of power between NATO and Russia had resulted in a stalemate in which neither side has an obvious advantage (even as the Ukraine economy died, and its currency hyperinflated, waiting for a clear winner), and the explicit or implicit support of China to either camp would make all the difference in the world, and perhaps the world’s most formidable axis.

Today we finally got the answer.  China’s ambassador to Belgium, was quoted as blaming competition between Russia and the West for the Ukraine crisis, urging Western powers to "abandon the zero-sum mentality" with Russia.  Reuters assessment of Xing speech: "an unusually frank and open display of support for Moscow’s position in the crisis." At least it is not a warning to the US to back off or else. Yet.

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