Dear CIGAs,

From Tanzania I wish you all, my extended family, a good night. It has been a long but delightful day.

The following observation from Master Kenny is important:

"We are in the 17th day of corrective action, and near the end of our minimum expectation of time required (15 to 18 days) to exhaust this corrective action, (but with a maximum time factor still projected at not more than 36 to 40 days). Each failed attempt to close below 1770 widens out this accordion correction and weakens the possibility of for a return to the 1705.40 low."

Jim Sinclair’s Commentary

This is called an incipient run on a banking system which must result in QE to infinity.

Deposit Flight From European Banks Means Collateral Risk Piling Up at ECB
By Yalman Onaran – Sep 14, 2011 8:29 AM MT

European banks are losing deposits as savers and money funds spooked by the region’s debt crisis search for havens, a trend that could worsen economic and financial conditions.

Retail and institutional deposits at Greek banks fell 19 percent in the past year and almost 40 percent at Irish lenders in 18 months. Meanwhile, European Union financial firms are lending less to one another and U.S. money-market funds have reduced their investments in German, French and Spanish banks.

While the European Central Bank has picked up some of the slack, providing about 500 billion euros ($685 billion) of temporary financing, banks are cutting lending, which could slow growth in their home countries. They’re also paying more to keep and attract deposits — or, in the case of Italy, selling bonds to retail customers for five times the interest they offer on savings accounts — which will erode profitability.

“All of this is symptomatic of a lot of fear in the European financial sector,” said Kash Mansori, senior economist at Experis Finance in Charlotte, North Carolina, which advises U.S. and European companies. “It shows that even European banks don’t trust each other anymore, so they’re taking their money out of the EU system. It’s similar to the distrust that happened worldwide in 2008.”

More… ^[1]

Jim Sinclair’s Commentary

John Williams’ comments for the day:

- Flat August Retail Sales Most Likely Were Down Net of Inflation
- Real Median Household Income Drops to 15-Year Low (Below 1969 Level, CPI-U Adjusted)
- Volatile PPI Reporting Flat for Month, Up 6.5% for Year

www.ShadowStats.com