Dear Friends,

I met a CIGA this morning in Tanzania who had the courage and personal energy to not only put his house in order, but also to make strategic moves. He has been shopping over here for significant farm land where he can enjoy two crops a year. He is planning to produce in demand, hard to obtain, and valuable items hydroponically.

The country is growing a such a rate that I doubt he needs to depend at all on exporting as the internal consumption will suffice.

I firmly believe because he has the proper investments, is here taking advantage of all the government welcomes to the farming industry and is moving here physically that he has insulated himself against the unravelling of the Western world.

To have been able to help him and all of you gives me great pleasure.

Regards,
Jim

 

Jim Sinclair’s Commentary

Just like in the 70s when gold began its historic climb, the final Pillar of Gold (a bear market in US Treasuries) must be cemented to attain $1650 and above.

US Treasuries breaking down, as they are with the 25 year plus uptrend about to be decimated, must happen. Then you can make a living selling US Treasuries rallies short for many years to come.

In the 70s rates on ten year bonds went from under 4% to 14 7/8%. Overnight money went above 21%. It will happen again as gold climbs to and through $1650.

The Formula of 2006 clearly points out that this MUST happen. It was simply common sense as gold is now heading for $1650 and better.

There is another salient point that not only is the Health Bill the biggest grab of centralized power since Roosevelt, it was desired by only 37% of the population while 48% did not want it in that form or at all.

Confidence is what makes currency value and that is sundering fast. The US dollar is no safe haven.

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Sell-off in US Treasuries raises sovereign debt fears
Investors are braced for a further sell-off in US Treasuries after dramatic moves last week raised fears that the surfeit of US government debt is starting to saturate bond markets.
By Ambrose Evans-Pritchard
Published: 9:06PM BST 28 Mar 2010

The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis. Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be "the canary in the coal mine", a warning to Washington that it can no longer borrow with impunity. He said there is a "huge overhang of federal debt, which we have never seen before".

David Rosenberg at Gluskin Sheff said Treasury yields have ratcheted up 90 basis points since December in a "destabilising fashion", for the wrong reasons. Growth has not been strong enough to revive fears of inflation. Commodity prices peaked in January and US home sales have fallen for the last three months, pointing to a double-dip in the housing market.

Mr Rosenberg said the yield spike recalls the move in the spring of 2007 just as the credit system started to unravel. "The question is how the equity market is going to handle this back-up in rates," he said.

The trigger for last week’s sell-off was poor demand at Treasury auctions, linked to the passage of the Obama health care reform. Critics say it will add $1 trillion (£670bn) to America’s debt over the next decade, a claim disputed fiercely by Democrats.

It is unclear whether China is selling US Treasuries after cutting its holdings for three months in a row, or what its motive may be. There are concerns that Beijing may be sending a coded message before the US Treasury rules next month on whether China is a "currency manipulator", though experts say China is clearly still buying dollar assets because it is holding down the yuan against the greenback. Some investors may be selling Treasuries as a precaution against a trade spat.

More… ^[2]

Jim Sinclair’s Commentary

Kick them harder when they are down as states go mad for revenue.

Californians may have to pay tax on canceled mortgage debt
By Sue McAllister
Posted: 03/28/2010 12:04:00 PM PDT

Central Valley real estate agent Donny Piwowarski last year sold his four-bedroom, 3,500-square-foot house on a half-acre in Tracy for $387,000 — about half of what he paid for it in 2005. Now with tax-filing season here, his situation is getting even grimmer.

Under California tax law, Piwowarski owes tens of thousands of dollars in state income tax on the nearly $400,000 in mortgage debt that was "canceled" when he sold his house for less than what he owed. The state considers canceled debt as taxable income in cases like Piwowarski’s and for thousands of other Californians who got rid of their homes last year in so-called "short sales."

Since 2007, federal law has seen things differently, in many cases sparing sellers any tax on debt canceled in a short sale, foreclosure or loan modification. In 2007 and 2008, California followed the feds’ lead, but the state law has not been extended to apply to mortgage debts canceled in 2009.

So an estimated 35,000 California taxpayers may be left owing state tax for 2009 on something the federal government does not consider taxable, according to the state Franchise Tax Board.

More… ^[3]

Jim Sinclair’s Commentary

No base equals no Toyota

U.S. defense chief meets Japan FM on base row
2010-03-30 05:32:18

WASHINGTON, March 29 (Xinhua) — U.S. Secretary of Defense Robert Gates met Monday with visiting Japanese Foreign Minister Katsuya Okada to discuss the relocation of Futenma military base on the Okinawa island. The Pentagon said the United States respects Japan’s opinion, and is considering its proposition.

Gates and Okada met in the Pentagon. Department spokesman Bryan Whitman said the United States respects "Japan’s request to explore alternatives," on the Futenma base issue.

The Futenma base issue has caused considerable controversy in recent months between the allies, with the Democratic Party of Japan (DPJ) looking at other options other than a 2006 Status of Forces Agreement (SOFA) signed between Washington and the government of former governing Liberal Democratic Party (LDP). Under that agreement, the U.S. Futenma air facility was to be moved to a coastal area in Okinawa and away from its current urban location. Locals and some inside Japan’s governing coalition oppose the plan, saying they want the base moved out of the prefecture.

Whitman on Monday said Washington is carefully considering Japan’s "current thinking with regards to the Futenma issue," and discussions will be conducted "through diplomatic channels."

Okada is scheduled to meet with National Security Adviser James Jones and Secretary of State Hillary Clinton.

More… ^[4]

Jim Sinclair’s Commentary

The EU may be slow but they know who stung them and where the gravy is.

Europe unlikely to join any new yuan offensive

(Reuters) – If Washington picks a fight with China over the weakness of the state-managed currency, it will do so without European reinforcement, not least because the euro has weakened in tandem with Greece’s debt crisis.

China

Preparation of a U.S. Treasury report that could potentially brand China a "currency manipulator" is rekindling tensions with Beijing prior to mid-April publication and raises questions as to how broad international support will be if things turned uglier.

The saber-rattling is growing in volume since U.S. lawmakers said they were crafting proposals to allow import duties to be slapped on Chinese goods on the grounds that American jobs are being lost and Beijing must now budge.

Despite the fact that governments in Europe also believe the yuan is undervalued, giving China an unfair edge in global trade competition, there appears to be little appetite here to up the ante simply because tempers are fraying in Congress, potentially weakening the U.S. diplomatic push.

Additionally, negotiations on an aid plan for Greece not only eclipsed most other policy issues in recent months but also exposed strains among euro zone governments that will hardly sharpen desire to renegotiate their position on China so soon.

"The view here (in Europe) is that this is a red flag to the Chinese. They sense it’s not going to be very productive," said an official involved in preparation of a meeting of G20 finance ministers that will bring all sides together later this month.

More… ^[5]

Jim Sinclair’s Commentary

And this will be spun as "Strategic Asset Returns." Sounds almost smart and surely not harmful.

Commercial real estate to see ‘storm’ of foreclosures
BY ALESHIA HOWE
March 29, 2010

The 2010 Tarrant County commercial real estate market looks to be similar to 2009 with one big difference according to local foreclosure expert George Roddy Sr.: a ‘closing window of opportunity.’

Roddy, president of Addison-based Foreclosure Listing Service Inc., said his company is predicting a yet-to-come storm of commercial foreclosures in Tarrant County, but those foreclosures will mean investment opportunities.

“We think ’09 was a dud market and 2010 will be close to being the same as ’09 … but by the end of the third quarter, the fourth quarter of this year, you’re going to see an increase of [investors] in the market and from our vantage point, the window of opportunity – believe it or not – is beginning to close,” Roddy said at a March 24 Society of Commercial Realtors breakfast. “The smart money is out there today taking advantage of the negative publicity commercial real estate is getting.”

For all of 2009, Roddy said overall commercial property sales in Tarrant County were down 44 percent compared with sales seen in 2008 – a telling number, he said, and the lowest number of commercial property sales in the last 20 years for the county. The numbers exclude foreclosure sales.

“This is the most important number in the viability and health of a local commercial market,” he said.

At the peak of the commercial property sale market in Tarrant County, which was 2007, Roddy said there were 2,405 sales transactions. In 2008, that number dropped to 1,958 commercial properties sold, and in 2009, 1,097 commercial properties changed hands in Tarrant County.

More… ^[6]

 

Jim Sinclair’s Commentary

Strike this one up under JOBLESS in the Jobless Economic Recovery.

What raving BS. People, some smart, actually believe it.

Report: 20,000 Illinois Teachers Could Lose Jobs
9,800 Teachers Are Already Out, Many More Layoffs Are Planned
Mar 29, 2010 8:52 am US/Central

SPRINGFIELD, Ill. (CBS) ― The state’s funding crisis has already put 9,800 teachers on the unemployment line, and a coalition of education groups warns that figure could more than double.

Schools must tell employees now whether their jobs will be cut next year. Officials from the six-group coalition said they have heard from 75 percent of Illinois school districts and they plan more than 17,000 layoffs.

The coalition says it expects the total to reach 20,000 when complete information is available.

The layoffs could be canceled if schools get additional money. Education advocates want state officials to raise taxes, as Gov. Pat Quinn has proposed.

The groups include the Association of School Administrators, the Illinois Federation of Teachers, the Illinois Education Association and more.

In a news release, Brent Clark said the data only reflect job losses, not other cuts in Illinois schools.

More… ^[7]

Jim Sinclair’s Commentary

Hunt hell, it is everywhere

SEC to Hunt for Lehman-Type Accounting on Wall Street (Update1)
By David Scheer, Joshua Gallu and Jesse Westbrook

March 29 (Bloomberg) — The U.S. Securities and Exchange Commission will examine whether Wall Street firms used accounting strategies like Lehman Brothers Holdings Inc.’s transactions that allegedly hid leverage, SEC Chairman Mary Schapiro said.

“We are looking at the Lehman activities very, very carefully,” Schapiro said today in a CNBC television interview. The regulator plans to review “every major financial institution very thoroughly” in coming weeks, she said.

Lehman used transactions known as Repo 105s to reverse engineer a key gauge of its ability to withstand losses before it collapsed in September 2008, bankruptcy examiner Anton Valukas wrote in a report released March 11. The transactions temporarily shifted as much as $50 billion off Lehman’s balance sheet, enabling the firm to report lower net leverage ratios.

The SEC’s Corporation Finance division, which monitors company disclosures, released a letter today that it is sending to finance chiefs at about two dozen firms. The letter asks how often the companies use transactions similar to Lehman’s, how they account for them and whether the dealings are concentrated in specific countries or with specific counterparties.

Because Lehman didn’t disclose the accounting, the firm’s financial statements were “deceptive and misleading,” Valukas concluded. Regulators haven’t accused Lehman and its former executives of wrongdoing over the transactions.

More… ^[8]

Jim Sinclair’s Commentary

The buyers of the issue, not Citi, are the ones paying the king’s ransom.

U.S. take if it sells its Citi stake to settle cost of bailout: $8 billion
By David Cho
Washington Post Staff Writer
Saturday, March 27, 2010; A01

Among the banks that rule Wall Street, Citigroup got a bailout that was bigger than the rest. Now the company is about to pay a king’s ransom for its federal rescue.

The Obama administration is making final preparations to sell its stake in the New York bank, according to industry and federal sources. At today’s prices, the sale would net more than $8 billion, by far the largest profit returned from any firm that accepted bailout funds, and the transaction would be the second-largest stock sale in history.

On paper, the government’s 27 percent stake has grown in value to $33 billion. The size of the deal in the works has Wall Street buzzing. Only the stock offering by Japan’s Nippon Telegraph and Telephone, which raised $36.8 billion in 1987, was larger, according to Thomson Reuters.

Leading financial firms, including J.P. Morgan Chase, Morgan Stanley and Goldman Sachs, are vying to be chosen as the deal’s underwriters to gain the prestige of managing a historic stock sale as well as the fees from investors who buy the shares. To improve their chances, some banks, such as Goldman Sachs, are offering their services to the Treasury Department at almost no cost, industry officials familiar with the matter said.

The windfall expected from the stock sale would amount to a validation of the rescue plan adopted by government officials during the height of the financial panic, when the banking system neared the brink of collapse. A year ago, Citigroup’s stock hovered around a dollar a share, and the bank’s future seemed in doubt. On Friday, the stock closed at $4.31.

More… ^[9]

Jim Sinclair’s Commentary

Who was the economist pinhead of a major investment bank that wrote China can’t buy gold?

The Peoples Bank of China Expected To Buy Gold as Chinese Gold Mines Become Depleted

Keep an eye out on what the PBoC will do if and when it finally decides to readjust its gold holdings.

The People’s Bank of China (PBoC) is also playing an increasingly supportive role for gold on the demand side. PBoC’s gold holdings are currently at 1.6% of its US$2.4tn total reserves – a fraction by international standards. If PBoC decides to rebalance its books to its recent peak gold holding as a proportion of reserves of 2.2% in Q4 2002, WGC estimates it could account for a total incremental demand of 400 tonnes at the current gold price.

Will supply meet demand at current prices? Negatory ghost rider. Existing gold mines are expected to be exhausted in six years. Oops.

More… ^[10]