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In The News Today

Posted May 21st, 2013 at 3:23 PM (CST) by Jim Sinclair & filed under In The News.

Jim Sinclair’s Commentary

I was headed down the ramp into the lake in, what we hope is, a floating car when Little Ditti, the constantly staring at me rescue tiny poodle, literally shot out the window. He put so much energy into getting out of the car window heading for the water that he must have covered almost 5 feet before his trajectory decayed. I had to brake, stop about 6 inches from the lake, get out (which is a trick in itself as there really are no doors) and go get him. Getting back into the vehicle, we put on the a/c and closed the windows. The following has nothing to do with floating cars, only the regular type.

How do you know when it is time to hang up the car keys? I’d say when your dog has this look on his face!

Jim Sinclair’s Commentary

If you cannot see the writing on the wall you are really blind.

In Cyprus the IMF officially suggested the nationalization of pension funds. The treasury always hits the pension program of government employees.

When the Fed cannot QE in order to buy all the bonds of the US Treasury, private pension funds will be the buyer.

US Treasury secretary says he has begun tapping federal retiree pension fund to avoid default
Article by: MARTIN CRUTSINGER , Associated Press
Updated: May 20, 2013 – 7:52 PM

WASHINGTON – Treasury Secretary Jacob Lew said late Monday he will begin tapping into two government employee retirement funds to buy more time before the U.S. Treasury is faced with the prospect of defaulting on the national debt.

In a letter to congressional leaders, Lew said that he would tap the civil service retirement and disability fund and a similar fund that covers retired postal workers. The law allows him to remove investments from these funds to clear room for more borrowing until Congress votes to raise the debt limit

Under the law, any investments diverted from the pension funds must be replaced with interest once Congress approves raising the debt limit.

Lew has said the various bookkeeping measures he is allowed to employ should provide enough maneuvering room to keep the government from defaulting on its debt until after Labor Day. Other estimates say Lew may be able to forestall a default until as late as November.

In January, Congress voted to temporarily suspend the debt limit but that suspension ended Sunday.

Jim Sinclair’s Commentary

I expect privacy, but never would depend on it.

Cell phone users ‘have no legitimate expectation of privacy’ – judge
Published time: May 17, 2013 00:08
Edited time: May 17, 2013 15:19

A federal judge recently ruled that if someone has their cell phone turned on, their location data does not deserve protection under the Fourth Amendment, meaning law enforcement can track individuals without a search warrant.

New York magistrate judge Gary Brown decided in favor of Drug Enforcement Administration (DEA) agents who were seeking his approval over a warrant on a doctor who they suspected was being paid for issuing thousands of prescriptions. The warrant would have compelled the physician’s phone company to provide real-time tracking data from his cell.

Brown, certainly to the delight of police, issued a 30-page brief outlining his opinion that, by carrying a cell phone, someone is essentially waiving their Fourth Amendment right to due process.

“Given the ubiquity and celebrity of geolocation technologies, an individual has no legitimate expectation of privacy in the prospective of a cellular telephone where that individual has failed to protect his privacy by taking the simple expedient of powering it off,” Brown wrote.

“As to control by the user, all of the known tracking technologies may be defeated by merely turning off the phone. Indeed – excluding apathy or inattention – the only reason that users leave cell phones turned on is so that the device can be located to receive calls. Conversely, individuals who do not want to be disturbed by unwanted telephone calls at a particular time or place simply turn their phones off, knowing that they cannot be located.”

Jim Sinclair’s Commentary

The temperature is over 90 degrees today. The sheep deeply appreciate their hair cuts.

Jim Sinclair’s Commentary

Please note in the sheering of the sheep who is the hard working person and the relaxing supervisor with an ice tea.

Jim Sinclair’s Commentary

I am so happy for this lady. She has her values right. She just goes with the flow on her loss of property but finds what she really cares about without looking.

Woman Finds Dog Lost During Tornado While Being Interviewed
May 21, 2013 11:01 AM

MOORE, Okla. (CBS Houston/AP) – A woman who thought she had lost it all found one of the things most precious to her while being interviewed on live television – her pet dog, buried alive under the rubble of her former home.

Jim Sinclair’s Commentary

Since the first day that QE came on the scene this has been the party line.

Isn’t the new more transparent Federal Reserve a joke?

Dudley Says He Can’t Be Sure If Next QE Move Is ‘Up or Down’
By Joshua Zumbrun – May 21, 2013 2:29 PM MT

Federal Reserve Bank of New York President William C. Dudley said he has not decided whether the Fed’s next move should be to enlarge or shrink its bond buying program as he called for a fresh look at its eventual retreat from record asset purchases.

“Because the outlook is uncertain, I cannot be sure which way — up or down — the next change will be,” Dudley said in a speech today in New York.

Dudley adds his voice to a debate on the Federal Open Market Committee about what to do with its program of bond purchases, designed to lower the 7.5 percent unemployment rate. While many Fed officials have voiced support for shrinking purchases as the next step, Dudley, who is also vice chairman of the FOMC, signaled willingness to increase purchases.

Officials last week expressed a range of views on the program. Philadelphia Fed President Charles Plosser called for shrinking purchases at the Fed’s next meeting; San Francisco’s John Williams favored a reduction “perhaps as early as this summer.” By contrast, Boston’s Eric Rosengren said low inflation and high unemployment suggest there may be a need for even more stimulus, not less.

Stocks extended gains after Dudley’s comments. The Standard & Poor’s 500 Index climbed 0.2 percent to 1,669.16 after earlier declining as much as 0.2 percent. The yield on the 10-year Treasury note fell to 1.93 percent from 1.97 percent late yesterday.

Jim Sinclair’s Commentary

Add this to the IRS and it is business as usual.

Grassley charges U.S. attorney undermined Fast and Furious whistleblower
May 20, 2013
By: David Codrea

A newly-released Office of Inspector General’s report shows the Justice Department sought to undermine a key Fast and Furious whistleblower’s credibility, Sen. Chuck Grassley charged today in a press release. “U.S. Attorney Dennis Burke leaked a sensitive document to the press regarding a whistleblower who had come forward with allegations of gunwalking … he leaked an internal memo regarding Fast and Furious suspect Jaime Avila to the New York Times, and … he lied to Deputy Attorney General James Cole,” Grassley’s release charges, adding. “The document leaked to Fox News was deemed so sensitive by the Justice Department that it was not provided to Congress, except in a secured room at department headquarters.”

Crediting Special Agent John Dodson as “the whistleblower who had the guts to come forward and tell Congress the truth about Operation Fast and Furious,” Grassely charged “The Inspector General confirmed that Mr. Burke went to great lengths to discredit Special Agent Dodson and Congress’ investigation into the gunwalking that led to the death of Customs and Border Patrol Agent Brian Terry.

“Mr. Burke’s refusal to cooperate with the Inspector General’s investigation shows me that he didn’t operate in good faith,” Grassley explained. “His actions are indicative of this administration’s willingness to attack whistleblowers who cooperate with Congress and show the administration’s commitment to undermine legitimate congressional oversight."

Long-time Gun Rights Examiner readers will recall this column’s efforts to get Grassley’s office, along with the media, Darrell Issa and the National Rifle Association to notice and investigate this story first brought to light on the CleanUpATF whistleblower site and first reported by citizen journalist Mike Vanderboegh of the Sipsey Street Irregulars blog in December, 2010. Vanderboegh and this columnist specifically warned against attempts to smear whistleblowers back in January of 2011, and a week later were the first to report on retaliation against them.

Jim Sinclair’s Commentary

Today’s score is one for maybe up and maybe down and another for sideways.

Fed’s Bullard backs continuing QE program
By Greg Robb

WASHINGTON (MarketWatch) – The Federal Reserve should continue with its present bond-buying program and adjust the rate of purchases in view of incoming data on growth and inflation, said St. Louis Fed President James Bullard on Tuesday. In a speech to an economic conference in Frankfurt, Bullard said the Fed’s bond buying, commonly known as quantitative easing, is the best policy option at the moment and has been effective. He rejected calls by some, inside and outside the Fed, for the central bank to do nothing, saying this risks the mildly deflationary situation experienced by Japan. Other tools, like cutting the interest the Fed pays for banks to park reserves at the central bank, or to "twist" short-term government debt on the Fed’s balance sheet into longer-term debt, would have only minor effects, he said. Bullard said European leaders should consider a quantitative easing program if more easing is desired. The program should be GDP-weighted, as there is no European-wide government bond market, he said.

Jim Sinclair’s Commentary

It is as they say it is, but what is the alternative that is politically viable? Has Ms. Lagarde decided to oppose Chairman Bernanke and Draghi? She is delving into a league of heavier hitters.

BIS and IMF attacks on quantitative easing deeply misguided warn monetarists
Monetarists across the world have warned that the International Monetary Fund and the Bank for International Settlements are making an historic error by calling for a withdrawal of emergency stimulus before the global economy has fully recovered.
By Ambrose Evans-Pritchard
3:59PM BST 19 May 2013

The two watchdogs launched broadsides against central bank largess last week. The BIS — the forum of central banks — was particularly blunt, seeming to imply that quantitative easing "does not work".

Critics say this risks undermining the credibility of radical measures when more may yet be needed. They fear central banks could repeat the mistake made in 1937 when the Federal Reserve lost its nerve and tightened too soon, tipping America back into depression.

"The BIS and the IMF are deeply misguided and risk doing the world a grave disservice. The biggest threat right now is irrational fear of bubbles among central banks," said Lars Christensen, a monetary theorist at Danske Bank.

"How can they criticize the Bank of Japan for pulling the country out of 15 years of deflation and the longest asset price collapse in modern history?"

Mr Christensen said deflationary forces are stalking the global economy, making it essential to offset budget cuts with monetary stimulus. The US is tightening fiscal policy by 2pc of GDP this year, the most in half a century.

Jim Sinclair’s Commentary

Adding beats reducing. Central banks do not buy gold to flip it at a better price, like Russia who values their gold at market, they know what is going to take place.

Since yesterday was the 20th of the month, The Central Bank of the Russian Federation updated their website with their April data. It showed that they added another 200,000 troy ounces of gold to their reserves…bringing their total up to 31.8 million troy ounces. Here’s Nick Laird’s most excellent chart updated with that data…

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Jim Sinclair’s Commentary

Why work?

Swingeing socialist tax policies in France mean thousands of millionaires have paid more than 100% of their annual income
By Daily Mail Reporter
PUBLISHED: 16:00 GMT, 19 May 2013 | UPDATED: 16:00 GMT, 19 May 2013

Taxes on the rich imposed by Socialist president Francois Hollande meant more than 8,000 French households had tax bills that exceeded their income last year.

It is thought the exceptionally high level of taxation was due to a one-off levy last year on the previous year’s incomes for households with assets of more than 1.3million euros (£1.1million).

It comes after Mr Hollande implemented a temporary 75 per cent tax on earnings over 1million euros (£845,000), aimed at offsetting the cost of a rebate scheme imposed by his right-wing predecessor Nicolas Sarkozy, which capped overall taxation at 50 per cent of personal total income.

French business newspaper Les Echos said Finance Ministry data showed in total nearly 12,000 households paid taxes worth more than 75 per cent of their 2011 income due to the levy.

Mr Hollande’s implementation of the tax has been judged unfair by the Constitutional Council, meaning it has recently been hastily rehashed to target companies rather than individuals.

Jim’s Mailbox

Posted May 21st, 2013 at 3:20 PM (CST) by Jim Sinclair & filed under Jim's Mailbox.

Dear CIGAs,

Jim is so right, pensions are going to be gone in the future. With the severe amount of underfunding the writing is on the wall. Anyone depending on a pension for future income is nuts in my opinion! In 10 years gold will still be here, pensions may not. The choice is simple.

CIGA BT

Public sector pensions ‘will be reduced by a third’ under reforms

Four million people will be affected by the changes, although some will be better off
Hilary Osborne
guardian.co.uk, Friday 17 May 2013 16.28 BST

Proposed changes to public sector workers’ pension schemes will reduce the average value of the benefit by more than a third for four million people, according to a report by the Pensions Policy Institute (PPI).

However, some people at the bottom of the income scale will be better off under the reforms.

The coalition plans to make several changes to public sector pension schemes to reduce the costs of running them. These include raising retirement ages in line with the state pension age and increasing the contributions made by employees.

Twelve months to save final salary schemes, says pensions minister
Steve Webb says there may be ‘no point trying to apply electrodes to the corpse’ but a version could be saved
Hilary Osborne
guardian.co.uk, Wednesday 15 May 2013 17.09 BST

There may only be a year to save company pension schemes that offer a guaranteed payout to savers, the pensions minister, Steve Webb, has warned.

Defined benefit (DB) pensions, also known as final salary schemes, have been under pressure in recent years as a combination of increased life expectancy and low gilt yields have made it increasingly expensive to provide the retirement incomes promised to members.

Research by the Pensions Protection Fund showed that by the end of April 5,142 of the UK’s 6,316 private sector schemes were in deficit, with the total shortfall between liabilities and assets adding up to £257bn.

Mr. Sinclair,

A friend and I flew from Alaska to attend the Saturday seminar. Your vast knowledge is so impressive and it was an honor to share the room with you. I asked a question specifically about my gold backed IRA and got a great answer from you.

Thank you so much,
CIGA Farrel

Hello Mr Sinclair,

Saw this article this afternoon in The Daily Bell by Catherine Fitts. She writes very well about what you would call the great flushing.

Thank you again for speaking in LA Saturday for those of us on the West Coast.

Kindest regards,
CIGA Jeff

Make Way for the Killers & the Great Tax Haven Roundup
By Catherine Austin Fitts

There are no scandals in Washington. There is simply a turnover. We are preparing for an escalation of the global financial war. The old team is simply being told to step aside. Make way for the killers.

When G-7 concluded their emergency meeting in London last weekend, they announced that they were going to target tax havens. What does this mean? After months of G-7 central banks buying mortgage bonds and equities, the hunt for capital is on. Of course, we knew the tax havens were in the crosshairs already – only intelligence agencies can dump out the kind of leaks we have been seeing over the last month leading up to the G-7 meeting.

However, the seriousness of the capital moves underway were underscored by the swiftness with which a "scandal" was trumped up and ready to go at the IRS, with headlines on Monday morning, the leadership was out on Wednesday and a new acting from OMB in at the IRS on Thursday. Wonder who the new commissioner will be? That is being sorted out now. It will be someone masterful at legal warfare – "lawfare."

A serious attack on the offshore havens, sufficient to direct $20-30 trillion in the direction that the G-7 wish it to go will also require the right kind of leadership at DOJ. Yes, Holder is certainly willing to play ball – he has done a perfectly adequate job supplying guns to the Mexican drug cartels and beating up on the Swiss. However, someone with international experience who is a lot meaner and trusted in certain congressional quarters is preferred. After all, asserting jurisdiction over $32 trillion is one amazing squabble.

Remember, whatever equity markets get that capital will have their P/E’s head up, which means they can go buy up everyone whose stock is trading in the markets that don’t get the capital. Backed by the capital accessed through the financial coup d’etat, think of the acquisition binge that is coming.

Dear Jeff,

Thank you for attending. Remember the Great Flushing precedes the Great Leveling.

Jim

Dear Jim,

Thank you for your Q&A session yesterday. I traveled from Washington state solely to attend your session, and left knowing that it might have been the most important conference I have ever attended. I was touched by your genuine concern for us. Your only goal was to inform us, with no personal side agenda. You are a very generous man.

I was unable to ask my one question during the session, and did not want to bother you after it ended, considering you have just spoken for 4 1/2 hours without much of a break, so here it is: What event, or set of events, would change your posture regarding the future of physical gold, paper gold’s pricing power, and the banking system’s risks?

Thank you again for your passion and dedication,
CIGA Mark

Dear Mark,

1. Sincere effort to reduce government spending.
2. Fair and equitable tax schedule supporting the establishments and continuation of business activities.
3. A separation between government and the major US corporations like Church and State.
4. The USA values it gold holding, after a third party audit of its holdings, at market price.
5. Emancipation of physical gold from future gold.
6. A total cessation of OTC derivative manufacture and distribution of any type or kind.

7. The declaration that high frequency trading is only the act of illegal front running of legitimate orders and banning it.
8. The closing of the Exchange Stabilization fund and its activities.

The emancipation of physical gold from fraudulent paper gold would result is a very high price for physical gold so in a real scenario to fix things gold is at new highs and worn by a currency like a necklace. It is voluntary to wear gold, but wearing it gives significant competitive value to wearing currency.

Heads we win, tails we also win.

Sincerely,
Jim

Hi Jim,

Mr. Hudson proudly wears his gold eagle. He protects our treasury from the evil bankers. Even though he is Tennessee born and raised, he is a Vermont Yankee at heart. He went through three homes before we rescued him at the age of 10 months. We brought him north and he has become quite the appreciative gentleman. He is wondering if you could post a face shot of his cousin Yankee Doodle.

Sincerely,
CIGA Thomas

Thomas,

Yankee Doodle is very much a patriot as well. Between Hudson Doodle and Yankee Doodle the emancipation of physical gold from paper gold is a sure thing. In fact, a many trillions of dollars sure thing.

Jim

Jim,

In the near future, the only employment will be in the technology field and gambling (trading).

Let’s just hope that computers will be in the position to buy things, as humans do now. Otherwise, we’re in a world of deep doo-doo. Why manufacture anything if there is no one to sell to? What will we do with all that time on our hands? (I’d better go back and watch the 1960 film The Time Machine with Rod Taylor, Yvette Mimieux, and the Warlocks to refresh my memory).

We’ve always looked at technological improvements as if it were the universe… meaning it has no end. Well, I do believe we’ll wake up one day and see ourselves heading toward a brick wall. An economic brick wall.

I prefer the gambling aspect of a career choice because you still need brains to reason and consolidate global and economic events, and still maintain the ability and agility to modify your actions. Something computer algo’s cannot do. Black Swans are just not in their vocabulary… yet.

In the technology arena, I see computers making and programming other computers. They already manufacture products, perform surgery, maintain logistical support, render soldiers obsolete in wars (see drones), and much, much, more. Anyone doubting this has simply to research companies like iRobot that look to take over every aspect of human productivity. So much for high tech jobs.

Perhaps Jim Rogers is correct with his espousals of having your children become farmers.

As long as computers can’t execute alchemy, as in making gold, I know I’ll feel secure.

CIGA Wolfgang Rech

Dear Wolfgang,

I have better advice than the other Jim.

Move to Tanzania, consolidating thousands of subsistence farmers into modern farming, and benefit thereby.

Jim

Dear High School Graduate: Everything You’ve Been Told Is False
5/21/2013 @ 3:05PM

When I graduated from Omaha Creighton Prep High School back in 1977, my fellow grads and I entered a benign, forgiving, if U.S.-hegemonic, economic order where one could find paid work — albeit of a blue collar variety — just by completing high school. A world where even a C-student was guaranteed some kind of white-collar employment just by earning a college degree; any kind of degree, with any kind of major, from a wide variety of public or private institutions.

High School Graduates of the Class of 2013, those days are over. Not only are there not a plethora of decent-paying jobs just waiting for you upon graduation, there are structural changes afoot in the U.S. economy making your human labor “incidental.”

You’ve probably noticed this at the proliferating self-checkout stations at your local CVS. You see it in the increased use of robots in surgery, auto assembly, and warfare, and in the increased use of high-frequency-trading computers — as opposed to human traders — on Wall Street. You see it in the increased operating efficiencies of corporations across the fruited plain, almost all of whom have enjoyed record profits post-2008 without an appreciable increase in their human labor pool.

Hi Jim,

I enjoyed both days in LA, thanks. Ran across this article where a currency is being devalued for a different reason but the people still value gold as a store of value.

CIGA Ken

Ken,

What is interesting here is that Euroland is softening on the entire embargo so let’s see exactly how much crushing the USA is going to do. Maybe they will fire cruise missiles at camel caravans smuggling gold.

Jim

Gold crush: U.S. ready to shut down gold sales to Iran
By Perry Chiaramonte
Published May 20, 2013

The U.S. is trying to stop the gold rush to Iran in a bid to undermine the Islamic Republic’s plummeting currency, but critics say the move is more likely to hurt ordinary citizens than the rogue regime’s leadership.

A top Treasury Department official told lawmakers that, starting July 1, the U.S. plans to crack down on all transfers of gold to the Iranian government or its citizens. The move appears aimed largely at banks and gold brokers in Turkey and the United Arab Emirates. Companies operating from within those nations have shipped large amounts of gold to Iran as Tehran attempts to stabilize its currency, the rial, amid increasing international economic isolation.

"We have been very clear with the governments of Turkey and the UAE and elsewhere, as well as the private sector that is involved in the gold trade, that as of July 1 all must stop, not just the trade to the government," Treasury Undersecretary for Terrorism and Financial Intelligence David Cohen told members of the Senate Foreign Affairs Committee last week.

The rial has lost two-thirds of its value against the dollar since late 2011, largely as a result of U.S.-led sanctions targeting the banking system and oil exports. The sanctions are in response to Iran’s ongoing nuclear weapons program. The U.S. can impose sanctions on foreign companies that violate the Iran policy, as long as those companies also seek to do business with parties in the U.S. To date, the Obama administration has not penalized any companies in Turkey or the UAE for trading in gold with Iran.

Jim,

I flew from Indiana via Chicago on Sunday morning to be at your meeting. It was a long day, but worth every minute. If you make it to Chicago, I will see you there as well.

Thanks for everything,
CIGA Jeff

Dear Jim,

It certainly appears so.

Regards,

CIGA Luis Ahlborn Sequira

Robin Hood in reverse – gold being taken down to make the rich richer

The legendary Robin Hood took gold from the rich to give to the poor: Today’s financial elite appear to be doing the reverse, but not with physical metal which is still flowing the other way.

Hi Jim,

I hope you are in recovery at home and with all your critters by your side!

What a delivery in LA combined with the Q&A! I was impressed with the quality and depth of the questions and the number of people asking those questions. You have educated your followers well, and I don’t believe anyone was disappointed with your responses or answers to specific questions. Even the one man on Saturday who was almost looking for a fight over his losses left the microphone in the end respectful of your relentless service to the community.

“Outside the banking system?” You spoke of investing in the currencies of the BRIC nations in accounts in those countries. I believe the motivation for this was that these countries had a healthier grasp on successful business basics, less debt, and more gold to back their currency. If that is accurate, are these simply exemptions to the get “outside the banking system?”

Much thanks,
CIGA Blake

Dear Blake,

My quest to see CIGAs get out of the system means out of the Western financial system by being off the balance sheets of Western financial institutions. I suggest in the BRICs and Singapore. My intention is to see you there not seeking privacy, but storage of hard assets and some fiat currency for transactions.

This is why I am committed to traveling to see all CIGAs until capital controls occur, closing the exit door legally. I leave for London in about a week.

Respectfully,
Jim

Hi Jim,

My husband and I drove down from the central California coast on Sunday for the LA Q&A. We enjoyed it so much!!! Thank you for coming. It was wonderful to get to meet you. You may remember me, I was wearing my Comet pin especially to show you, but I forgot to mention it.

Since you love dogs so much, I thought you might get a kick out of this multiplicity shot of Smidgen, who will sit wherever you put her. This photo may look like duplicated images of Smidgen, but it is eleven different poses from those exact locations… including the one on the table outside.

Thank you so much for sharing your knowledge with us. It is SO MUCH appreciated.

CIGA Evaan

Jim,

It was a pleasure. I flew from Australia to attend and enjoyed every moment.

Thanks,
CIGA Mark

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Clients Denied Gold At Major Banks As Shortage Intensifies

Posted May 21st, 2013 at 2:36 PM (CST) by Eric King & filed under King World News.

Dear CIGAs,

Today Egon von Greyerz told King World News that clients are having tremendous problems getting their physical gold out of Swiss banks as well as other major banks as the shortage intensifies. Greyerz also discussed the fact that refiners simply cannot keep up with demand, “no matter how much they produce.” Below is what Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, had to say in this extraordinary interview.

Greyerz: “This week I want to talk about what we are seeing in the physical gold market, and why there is a disconnect in that market. We transfer a lot of gold from Swiss banks and other banks into private vaults for investors.

More often now, than ever, we are encountering incidents when the banks are putting up all kinds of obstacles for these transfers. The first sign of the potential shortage of physical gold started with ABN AMRO a few weeks (when they) declared that they would renege on their commitment to redeem gold accounts in physical gold.

“Instead they would redeem in cash. The custodian for ABN AMRO, for the gold, is UBS, and UBS decides to what extent they hedge the ABN paper gold position.

So as there is no more physical redemption of the ABN AMRO gold accounts, it seems these contracts are no longer backed by physical gold. It’s just backed by paper, and this is of course typical for the paper market, Eric. This paper market, which is 100 times bigger than the physical market, probably has zero percent backing of physical. This is why ABN stopped redeeming in gold.

Click here to read the full interview on KingWorldNews.com

In The News Today

Posted May 20th, 2013 at 4:57 PM (CST) by Jim Sinclair & filed under In The News.

No Bear Market In Gold — Paul Craig Roberts
May 20, 2013

You know that gold bear market that the financial press keeps touting? The one George Soros keeps proclaiming? Well, it is not there. The gold bear market is disinformation that is helping elites acquire the gold.

Certainly, Soros himself doesn’t believe it, as the 13-F release issued by the Securities and Exchange Commission on May 15 proves. George Soros has significantly increased his gold holding by purchasing $25.2 million of call options on the GDXJ Junior Gold Miners Index. http://bullmarketthinking.com/soros-reports-over-239mm-in-gold-positions-buys-25mm-in-call-options-on-juniors/

In addition the Soros Fund maintains a $32 million stake in individual mines; added 1.1 million shares of GDX (a gold miners ETF) to its holdings which now stand at 2,666,000 shares valued at $70,400,000; has 1,100,000 shares in GDXJ valued at $11,506,000; and 530,000 shares in the GLD gold fund valued at $69,467,000. [values as of May 17]

The 13-F release shows the Soros Fund with $239,200,000 in gold investments. If this is bearish sentiment, what would it take to be bullish?

The misinformation that Soros had sold his gold holdings came from misinterpreting the reason Soros’ holdings in the GLD gold trust declined. Soros did not sell the shares; he redeemed the paper claims for physical gold. Watching the gold ETFs, such as GLD, being looted by banksters, Soros cashed in some of his own paper gold for the real stuff.

Ron Paul On Gold: No One Knows Value; I’m Buying
April 24, 2013

April 23 (Bloomberg)– Ron Paul, Former Congressman from Texas, discusses his views on gold, central banks, and the weakened Republican Party. He speaks on Bloomberg Television’s “Market Makers.”

Jim Sinclair’s Commentary

Predictable as a monetary union is faced with the selection of sides. This sides with Russia.

EU decision to lift Syrian oil sanctions boosts jihadist groups
Jabhat al-Nusra, an al-Qaida affiliate, consolidates position as scramble for control of wells accelerates
Julian Borger and Mona Mahmood

The EU decision to lift Syrian oil sanctions to aid the opposition has accelerated a scramble for control over wells and pipelines in rebel-held areas and helped consolidate the grip of jihadist groups over the country’s key resources.

Jabhat al-Nusra, affiliated with al-Qaida and other extreme Islamist groups, control the majority of the oil wells in Deir Ezzor province, displacing local Sunni tribes, sometimes by force. They have also seized control of other fields from Kurdish groups further to the north-east, in al-Hasakah governorate.

As opposition groups have turned their guns on each other in the battle over oil, water and agricultural land, military pressure on Bashar al-Assad’s government from the north and east has eased off. In some areas, al-Nusra has struck deals with government forces to allow the transfer of crude across the front lines to the Mediterranean coast.

Jim Sinclair’s Commentary

In Cyprus, the unthinkable was proposed by the IMF and the Dutch Finance Minister. So unthinkable that I have been traveling to see you to define all of the potential conditions of any future refinancing of financial entities.

The unthinkable targeted nationalization of pension funds, putting the information world on notice in Brazil as well as the entire Western financial world. That unthinkable proposal not only confiscated depositor’s funds, but more egregiously called for in writing and in public for the nationalization of Cyprus pension funds.

We need to talk eye to eye so you understand that all large fonts of public money are in the cross hairs of governments in need of buyers for their sovereign debt. In the USA the absolute majority of US sovereign debt is being bought by the US Federal Reserve. There was even the cutest of ploys recently mentioned that the huge warehouse of this debt could be sold off the Federal Reserve balance sheet to the US treasury. That would be debt monetization of debt monetization or debt to infinity and beyond. I cringe at the possible reaction of the US dollar to that purely academic non-solution.

Should the Federal Reserve have to sustain these high level of purchases of treasury instruments in order to perform its low interest program, all retirement tax deferred programs are going to become a tasty temptation as a large bag of finance to push specially designed treasury paper into.

A form of nationalization of all Western financial world tax deferred pension plans is a real possibility. Might I suggest at the present level of government spending it is a probability?

Rumors Spark Bank Run, Break-Ins in Brazil
Published: Monday, 20 May 2013 | 8:20 AM ET
By: Deepanshu Bagchee

Rumors that Brazil’s social security fund called Bolsa Familia was to be cancelled led thousands of people to rush to withdraw money from a Brazilian bank over the weekend.

Customers lined up at ATMs at dozens of bank branches of Caixa Economica Federal, a government-owned bank, which pays the social security subsidy on Saturday and Sunday.

"The bank branches themselves aren’t open on Saturdays. What happened is that once the rumor gained momentum, people flocked down to their local branches to try to withdraw money from the ATMs," Rafael Carregal, a journalist at Brazil’s main TV network Globo told CNBC.

Brazilian newspaper Estado de Sao Paulo reported that at five branches in the northeastern city of Sao Luiz and four others in the state of Maranhao, depositors broke into branches. Most of the branches that were affected were in the poorer northeast region of the country.

In all, branches in 12 states were affected as the government tried to quell the rumors.

"Police had to intervene in many states, trying to keep the masses in order. The minister of national development had to make a speech (on Sunday) reassuring the people that nothing was to be changed in their benefits program," Carregal said.

Jim’s Mailbox

Posted May 20th, 2013 at 4:51 PM (CST) by Jim Sinclair & filed under Jim's Mailbox.

Jim,

Taking time to reflect what the future holds for humanity and I tell you every day I step further out of the system as I can to the extent I can. This article by David Stockman from April 2nd 2013 in the New York Times really hits home for what the future holds.

"When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth."

Click here to read the full article…

Put in with this J. Biden video and the ingredients are screaming at us to get out of the system now.

CIGA Perry

Dear Jim,

I thought you might be interested in this news from 7 hours ago if you have not seen it already. QE to infinity!!!

Ceiling suspended: US takes on $300bn in new debt after hitting $16.7 trillion

The ceiling has been lifted, and the Treasury has promised it will keep cash pumping into government spending programs beyond the debt limit.

Yours respectfully,
CIGA Keith

Keith,

They might as well remove the debt ceiling entirely as it is a sick joke to start with.

Maybe we are in Financial Degradation to Infinity?

Jim

Jim Sinclair’s Commentary

The following is courtesy of CIGA Mark, our CIGA in the trenches…

True Value Reports a Decrease in Gross Billings
May 17, 2013

True Value reported gross billings of $444.3 million for the quarter ending March 30, down 0.9 percent for the same period a year ago, due to a nearly non-existent spring and a decline in lumber and building material vendor direct ship sales.

“While winter-related product sales exceeded the prior year, the general lack of spring weather this March versus last year was too much to overcome,” said President and Chief Executive Officer Lyle Heidemann. “Last year our retailers’ comp store sales were up double digits in March and this year they were down a high single digit.

“In April and early May, for the parts of the country where spring has arrived, our retailers on average are experiencing double-digit increases in their retail comp store sales.”

Sir,

Thank you again for the wonderful presentation on Saturday in LA. It was a great event well worth the trip from Chicago to LA. Looking forward to attending the next excursion to Tanzania.

Cheers,
CIGA Ric

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Dear Jim,

Are we about to see a ‘dismantling’ like never before in history? I believe we are being told; who has ears to hear?

Best Regards,
CIGA Gene

Quote from Treasury Secretary Lew, of April 17:

"We are advancing comprehensive regulation of OTC derivatives markets, an orderly liquidation framework, and recovery and resolution plans so that the largest most complex financial institutions can be wound down in an orderly manner without burdening taxpayers."

Dear Gene,

It is simply impossible where the 1991 to 2007 legacy OTC derivative frauds are concerned.

Jim

Hello Jim,

First I wanted to send this recent story along even though you probably already know about it.

BARRON’S: There Were Two Gigantic, Suspicious Sales Of Gold On Friday That Caused The Price To Plunge
Joe Weisenthal | May 19, 2013, 10:34 AM

Gold went down the toilet again on Friday, and is now close to revisiting its April lows.

This gold weakness is causing a lot of consternation to fans of it who don’t understand how the precious metal can keep falling, when central banks around the world continue to press down on the gas pedal.

A lot of gold bugs think the price is being manipulated somehow, or that there’s some divergence between what’s going on in "paper" gold (gold prices that are tied to ETFs) and what’s going on in physical gold (people buying ingots or jewellery).

Second, I just wanted to say thanks for your all your free advice. I don’t care how low the paper price falls, it doesn’t worry me in the least. I am perfectly comfortable knowing I have the safest insurance this world can offer: Gold.

People who worry and whine about the price of gold in my opinion need to learn to be still and calm down. Being still, educating themselves and looking at the fundamentals in my opinion gives clarity and clarity provides an inner strength and calmness which helps a person weather the storms.

Also, for those who just can’t seem to stop whining to you, I always think of a scene from the movie: The Godfather. You can view that on YouTube here:

CIGA Dan Duke

Jim,

Sure he unloaded GLD ETF, but did he unload any of his physical? Makes me wonder. He just may be on the forefront of the thinking you’ve espoused… namely the separation of physical from paper gold and the eventual collapse of the GLD EFT.

The headlines make it APPEAR he is a gold bear, when in reality he may be fearing all that you’ve been saying and teaching us. He’s no dummy. Worldwide currency depreciation takes its toll, as surely as night follows day. If we can see it, he surely can.

CIGA Wolfgang Rech

Gold Bear Bets Reach Record as Soros Cuts Holdings: Commodities
By Joe Richter – May 19, 2013 4:00 PM ET

Soros Fund Management LLC lowered its investment in the SPDR Gold Trust, the biggest bullion ETP, by 12 percent to 530,900 shares as of March 31, compared with three months earlier, a Securities and Exchange Commission filing showed May 15. The reduction followed a 55 percent cut in the fourth quarter last year. Paulson & Co., the top investor in the SPDR fund, maintained a stake of 21.8 million shares, now valued at $2.86 billion. Global ETP holdings slid 16 percent to 2,207.1 metric tons this year, valued at $96.5 billion.

Gold premiums in India, the world’s biggest buyer, more than doubled to $40 an ounce May 15 from $17 to $18 a day earlier, according to Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation. China’s bullion demand jumped to a record 294.3 tons in the first quarter, the World Gold Council said in a report May 16.

Jim,

With the attack, manipulated or not, at the opening of the NY Globex this afternoon I needed a dose of you and your buddies. All the market malevolence is immediately wiped out by your little dogs. Thanks for the picture.

Peace and love to you all.

CIGA Ed

Ed,

If you cannot reach me in a crisis, hug a puppy FAST.

Jim

Dear CIGAs,

Here’s a picture of Jim Sinclair and me at his seminar at the LAX Marriot.

I finally got to meet the man in person.

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CIGA JB Slear

Jim,

Like minds think alike. Perhaps that could qualify as a Yogism.

From Marc Faber’s May 1 letter:

"I find it difficult to write and not to be misunderstood"

First, I am discussing capital flows and the general belief among some economists that trade and current account deficits do not matter because the money flows back in the form of investments in equities, bonds, real estate, direct investments, and corporate takeovers.

According to Barron’s Big Money Survey, “74% of large portfolio managers are bullish about stocks, which is the Highest Level Ever.” Time to be a contrarian?

I am reluctantly maintaining an approximately 25% weighting in equities (mostly in Asia and in Europe) and I have not yet shorted any stocks because I have learnt that a bubble can get bigger still and exceed my expectations – before it implodes violently.

I want to make clear that I own equities not because of the belief that they are inexpensive and that they will move up substantially but because I do not trust the banking system and, therefore, I do not wish to be overexposed to bank deposits.

Yours this rainy weekend,
CIGA Wolfgang Rech

Incredibly Important Developments In Gold & Silver Markets

Posted May 20th, 2013 at 4:29 PM (CST) by Eric King & filed under King World News.

Dear CIGAs,

Today King World News is reporting on incredibly important developments taking place in the gold and silver markets. Acclaimed commodity trader Dan Norcini spoke with KWN about the amazing action in both of these key markets and provided four tremendous charts. Below is what Norcini had to say in his interview.

Norcini has been stunningly accurate in his predictions of the movement in the gold and silver markets. Now the acclaimed trader discusses these incredibly important developments in both of these markets: “Gold appears to have successfully retested its former spike low down in that important support level between $1320 – $1340 and held. What is important from a technical analysis perspective is that the volume completely dried up as price worked its way back into that critical support zone noted on the 4 hour price chart.

Bears were hoping to be able to recruit a wave of fresh converts to their side and give them the firepower to pressure the market down through this level, thereby touching off another wave of sell stops and setting up a fresh new leg lower in price. Obviously, there appears to have not been a large contingent of traders interested in selling gold aggressively down at these levels right now. That gave some would-be longs the excuse they were looking for to re-enter the market plus stirred some mild, but not aggressive short covering on the part of the bears. However that all changed rather abruptly!

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In The News Today

Posted May 18th, 2013 at 3:19 PM (CST) by Jim Sinclair & filed under In The News.

Jim Sinclair’s Commentary

Mr. Faber’s comment: "You keep your dollars and I’ll keep my gold. Let’s see which goes to zero first."

Jim Sinclair’s Commentary

Here is the best advertisement for the Animal Channel. I always leave it on for the puppies if I am out.

Strange times are these in which we live when old and young are taught in falsehood’s school. And the one man who dares to tell the truth is called at once a lunatic and fool.
– Plato (429-347 BC)

Jim Sinclair’s Commentary

Urban defense against banksters returning from a wonderful day of rape, murder and pillage: a 50 cal. hot dog.

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Jim Sinclair’s Commentary

Tired of our totally criminal world of finance? Need a smile? Try being covered with puppies.

Gold Bug Hedge Funds Collectively Report Over $183mm In New Call Option Positions On Miners
May 18, 2013 | By Tekoa Da Silva

While mainstream news sources continue the war against gold and gold-related investments, three of the world’s top performing hedge fund managers have been busy at work building speculative gold positions during the first quarter.

George Soros, John Paulson, and Steve Cohen, who in aggregate control over $60 billion dollars, have been aggressively buying the most speculative vehicles associated with gold: call options on gold mining stocks.

Starting out with, George Soros, billionaire financier and chairman of Soros Fund Manangement LLC, was the target of bearish gold commentary this week issued by Bloomberg. While Bloomberg journalists correctly reported that he’s been cutting his stake in gold, what they failed to mention (which was articulated here on May 16th), was how he reallocated the proceeds.

Soros indeed cut his stake in the GLD gold fund by about $2.5mm—a paltry sum, especially given the fact that he simultaneously purchased a massive $25mm in call options on the GDXJ Junior Gold Miners Index. This purchase outweighs the physical gold sale by a factor of 10—suggesting he expects much greater gains ahead to be had in the junior mining stocks.

Reported exclusively here on February 19th, was Steve Cohen, founder of SAC Capital Partners LP, purchased a $60mm option “straddle” position on the GLD during Q4 2012, which represented the expectation of an explosive move in gold—either up or down in price. Indeed, that is exactly what occurred, and during Q1, SAC Capital Partners closed out that $60mm straddle position (no doubt at a staggering profit), while at the same time buying $66mm in call options on a major gold & copper producer. The firm also maintained over $76mm in long positions on mining equities during Q1.

The largest of the trio in terms of gold positioning for the quarter, was John Paulson, founder of Paulson & Co., which reported owning over $4.389 billion in total gold holdings. Paulson held firm his $3.3 billion stake in GLD, and further added a shocking $92mm in call options on two major gold mining companies.

Muddled Israeli-US policies on Assad set stage for Golan offensive against Israel

Four days after a “senior Israeli official” warned Assad through The New York Times of Wednesday, May 15 that he risks forfeiting power if he retaliates for Israeli attacks on weapons supplies to terrorists, “Israeli officials” were telling the London Times of Saturday, May 18 something quite different: “An intact, but weakened, Assad regime would be preferable,” they said. “Better the devil we know than the demons we can only imagine if… extremists from across the Arab world gain a foothold there.”

The night before this report, Fox News aired footage appearing to show Israeli commandos inside Syria racing back on foot to Israeli territory. Without going into whether the two sets of “Israeli officials” were one and the same, their utterances are clearly making Israel’s policy-makers and defense leaders look muddled and uncertain – or, worse, unable to think clearly – about how to cope with the menace building up on the Syrian Golan. This could take the form of a Syrian war of attrition and/or a Hizballah offensive against Upper and Western Galilee. At all events, the Syrian civil conflict appears poised ready to spill over to one or more of its neighbors, starting with Israel as a result of six factors:

1. President Barack Obama’s inability to make up his mind on whether the US should intervene militarily in Syria – even in a limited way, such as the imposition of no-fly zones or finding a way to supply non-Islamist Syrian rebel groups with sorely needed weapons.

2. The US president’s refusal to recognize that chemical weapons have already been used in Syria. His reaction to the file put before him in the White House Friday, May 17, by Turkish Prime Minister Tayyip Erdogan – with evidence from physicians treating wounded Syrians – remained dismissive. “The US has seen evidence of chemical weapons being used in Syria,” he said, adding however, “it is important to get more specific details about alleged chemical attacks.”

This comment was interpreted as the US president’s acceptance of the use of chemical weapons in the Syrian war so long as it was on a limited scale. Obama, like Prime Minister Binyamin Netanyahu, has therefore waved away another red line for military intervention in the Syria conflict, by closing his eyes to the evidence.

Former Israeli defense minister Binyamin Ben-Eliezer was more realistic last week when he brusquely brushed aside a radio interviewer’s query by saying: Of course, Assad has used chemical weapons and isn’t it obvious that he has already transferred to Hizballah both chemical substances and other advanced weapons?

Jim Sinclair’s Commentary

Reputation of management is important to the valuation of a security. The US dollar is the security of the country, USA. Therefore reputation of management will factor into the dollar price regardless of short term shenanigans.

This Is No Ordinary Scandal
Political abuse of the IRS threatens the basic integrity of our government.
By PEGGY NOONAN

We are in the midst of the worst Washington scandal since Watergate. The reputation of the Obama White House has, among conservatives, gone from sketchy to sinister, and, among liberals, from unsatisfying to dangerous. No one likes what they’re seeing. The Justice Department assault on the Associated Press and the ugly politicization of the Internal Revenue Service have left the administration’s credibility deeply, probably irretrievably damaged. They don’t look jerky now, they look dirty. The patina of high-mindedness the president enjoyed is gone.

Something big has shifted. The standing of the administration has changed.

As always it comes down to trust. Do you trust the president’s answers when he’s pressed on an uncomfortable story? Do you trust his people to be sober and fair-minded as they go about their work? Do you trust the IRS and the Justice Department? You do not.

The president, as usual, acts as if all of this is totally unconnected to him. He’s shocked, it’s unacceptable, he’ll get to the bottom of it. He read about it in the papers, just like you.

But he is not unconnected, he is not a bystander. This is his administration. Those are his executive agencies. He runs the IRS and the Justice Department.

A president sets a mood, a tone. He establishes an atmosphere. If he is arrogant, arrogance spreads. If he is too partisan, too disrespecting of political adversaries, that spreads too. Presidents always undo themselves and then blame it on the third guy in the last row in the sleepy agency across town.

Jim Sinclair’s Commentary

The physical market for gold will drain the warehouses of the futures exchange resulting in the physical market taking over the price setting mechanism of gold.

China’s Gold hunger to continue in 2013

BEIJING (Scrap Register): World’s second biggest gold buyer China’s gold hunger to continue this year, according to the latest reports.

As per latest reports, China’s gold imports from Hong Kong reached a record high in March and country’s yellow metal consumption rose by 26% in the first quarter of this year.

China’s Gold imports from Hong Kong
As per latest figures released by Hong Kong Census and Statistics Department, Mainland China’s gold imports from Hong Kong more than doubled to a record high level in March.

China boosted their gold purchases from Hong Kong by 223,519 kilograms in March including scrap, an increase of 130% compared with 97,106 kilograms a month earlier.

According to Bloomberg, China’s net gold imports reached 130,038 kilograms in March compared with 60,947 kilograms a month earlier.

China’s Gold consumption
The world’s second-largest economy China’s consumption advanced sharply by 26% year-on-year in the first three month of this year mainly due to the strong bullion sales and rising jewelry demand, as per China Gold Association.

According to the Association, China’s gold usage hit 320.54 metric tons in the first quarter of this year. Purchases of gold bars surged 49 percent to 120.39 tons, while jewelry gained 16 percent to 178.59 tons.

Jim’s Mailbox

Posted May 18th, 2013 at 11:27 AM (CST) by Jim Sinclair & filed under Jim's Mailbox.

Jim,

Where your money goes. Hear that sucking sound? Listen carefully because it’s hard for the poor and the middle class to hear it. But the wealthy? Well, they can hear it clearly. It’s almost as if they have an app on their phone to promote the transfer of wealth.

CIGA Wolfgang

The Empire’s Next Effort to Extract Your Wealth
Addison Wiggin · May 15, 2013

Since before the tech bust, we’ve been suggesting that while Americans “think” they’re getting richer… they’re actually heading in the other direction. They’re getting poorer.

This proposition has been easier for folks to entertain since housing busted and the financial crisis reversed the “wealth effect” in 2008. With that in mind, let’s take a look at the logic of the American Empire and what you can expect in the year(s) ahead.

“Great empires, such as the Roman and British, were extractive,” economist Paul Craig Roberts observed recently. “The empires succeeded because the value of the resources and wealth extracted from conquered lands exceeded the value of conquest and governance.”