In The News Today

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Jim Sinclair’s Commentary

Grandpa, I have had it. No more lectures on Currency Induced Cost Push Inflation.


Jim Sinclair’s Commentary

Whatever is required here and there will be provided. About that there is no doubt except in MSM manipulating the euro/dollar rate for the best interest of the high and mighty Wall Street banksters.

The Federal Reserve is prepared to be the lender of last resort to Euroland. This exercise in QE to infinity using stooges is going to have colossal impact on the monetary system as well as business, just not the way the majority of commentators anticipate.

The euro will be with us for lifetimes and will trade between 1.35 and 1.40 after this reaction being provided by MSM in order to increase the coffers of the mighty.

Today they use Spain. There will be a next and a next for MSM to run you around and around to pick the pockets of currency traders bearish on the euro. Eventually they will run out of weak countries in Euroland and the dollar will probe .7200 on the USDX. That is certain.

The Federal Reserve is the lender of last resort to Euroland. That is certain.

Plosser Says Fed is Prepared to Respond to Europe Crisis
By Jeff Kearns and Tom Keene – Sep 27, 2012 9:33 AM ET

Federal Reserve Bank of Philadelphia President Charles Plosser said policy makers are monitoring Europe’s debt crisis and are prepared to act should officials in the region prove unable to contain its spread.

“The Fed is watching Europe very carefully and the consequences of that, how that will play out if Europe suffers a financial crisis for some reason,” Plosser said today in a “Bloomberg Surveillance” television interview with Tom Keene and Sara Eisen. “We are prepared to respond.”

Charles Plosser, president and chief executive officer of the Federal Reserve Bank of Philadelphia, also reiterated comments from his Sept. 25 speech in which he said new bond buying announced by the Fed this month probably won’t boost growth or hiring and may jeopardize the central bank’s credibility. Photographer: Scott Eells/Bloomberg

Spanish 10-year bond yields rose above 6 percent yesterday, climbing by the most in two months, as Prime Minister Mariano Rajoy defied anti-austerity protesters with a plan to cut the deficit by at least 18 billion euros ($23.2 billion) next year. Police in Athens dispersed protesters with tear gas this week.

Plosser also reiterated comments from his Sept. 25 speech in which he said new bond buying announced by the Fed this month probably won’t boost growth or hiring and may jeopardize the central bank’s credibility. Policy makers said Sept. 13 that they’ll begin a third round of quantitative easing by purchasing mortgage-backed securities at a pace of $40 billion per month until labor markets “improve substantially.”



Jim Sinclair’s Commentary

Just before he left you could hear 1, 2, go!

Drunk banker jumped seven floors into Singapore harbour while being filmed by a friend on a mobile for a dare
By Kerry Mcqueeney
PUBLISHED: 09:23 EST, 27 September 2012 | UPDATED: 10:02 EST, 27 September 2012

A drunk British banker died when he jumped seven floors from a rooftop bar of a luxury Singapore hotel into the harbour while a friend filmed the dare on a mobile phone.

William Hart, 37, was more than three times the legal drink drive limit when he climbed over the metal railings of the Lantern bar on top of the Fullerton Bay Hotel and announced he could ‘make the jump’ to the water below, an inquest heard.

His friend saw a large splash in the water and rushed downstairs to look for him but, when he failed to resurface, asked hotel guards to help look for him.


Jim Sinclair’s Commentary

John Williams of once again graces us with his statistician’s genius. You should really subscribe to his service that will guide you accurately in both good and tough times.

– Unusually Large 2nd-Quarter Revisions: Headline GDP Growth Dropped to 1.3% from 1.7%,
  Theoretically Equivalent GDI Dropped to 0.2% from 0.6%
– Plunging Automobile and Commercial Aircraft Sales Savaged Durable Goods Orders
– August Household Income Took a Hit

Jim Sinclair’s Commentary

Government run economic entities and programs have a great deal in common.

Postal Service Prepares for Second Default in Two Months
By Amanda Palleschi, Government Executive
Updated: September 26, 2012 | 6:37 pm

The U.S. Postal Service will default this week on a $5.6 billion congressionally mandated obligation to pre-fund retiree health benefits, marking the second time in two months the cash-strapped agency has done this.

The Postal Service last month failed to pay $5.5 billion for its fiscal 2011 prepayment obligation, which originally was due in September 2011 but was deferred by Congress until Aug. 1. That was the first time it ever defaulted on a payment to the Treasury Department. The $5.6 billion due this week, on Sept. 30, represents this fiscal year’s obligation.

Before this year, Congress helped USPS defer pre-funding payments required by a 2006 congressional mandate. Postal reform has challenged this Congress. Lawmakers warn that when they revisit the issue after the November election they likely won’t reach agreement on as major an overhaul as some deem necessary. USPS lost $5.2 billion in the third quarter of fiscal 2012, $2.1 billion more than during the same time period in 2011.

Health care for current retirees is paid for from the Postal Service’s general operating budget and will not be affected by the default. The agency’s inability to make its payments will not affect mail delivery or employee pay, said USPS spokesman David Partenheimer.

The Senate passed a postal-reform bill this spring and its architects have derided the House for stalling on a vote on its version of the bill. The two bills have some similarities, but would address retiree health care prepayment obligations differently. The Senate bill restructures the prepayments to make them more manageable; the House bill, which passed out of the House Oversight and Government Reform Committee earlier this year, requires the agency to pay $1 billion of its fiscal 2011 prepayment obligations and make up the remainder in fiscal 2015 and fiscal 2016.


Jim Sinclair’s Commentary

CIGA Green Hornet says this Chinese article is spot on.

The US public really has no clue how deep the hole is, and the colossal impact the action portends. They will soon!

U.S. QE3 signals deepening credit crisis: Dagong

BEIJING, Sept. 27 (Xinhua) — China’s leading credit rating agency Dagong said Thursday that the third round of quantitative easing implemented by the United States signals the country’s deepening credit crisis and dropping solvency.

Dagong Global Credit Rating Co., Ltd. said in a statement commenting on the U.S.’s third round of quantitative easing, also known as the QE3, that the policy cannot promote the country’s economic recovery and may further worsen its macroeconomic environment in the mid- and long-terms.

Dagong said the QE3 cannot alleviate the private sector’s debt burden in a short time and rid the financial system of excessive liquidity, and, thus, will not serve to provide new impetus for economic growth.

The policy will also weaken the private sector’s willingness to save and will drive up international commodity prices, Dagong said.

"It will plunge the country’s economy into a long-term recession, create reliance on loose monetary policy and expansionary fiscal policy, and lead to a rising debt burden and increased credit risks," Dagong said.





Jim Sinclair’s Commentary

Whatever funds Spain requires will be provided.

All this MSM just helps the big boys make a fortune trading the euro.

Spain braces for protests as budget cuts are unveiled
By Al Goodman, Irene Chapple and Catherine Tymkiw, CNN
updated 9:01 AM EDT, Thu September 27, 2012

Madrid (CNN) — Spain is set to unveil the debt-ridden country’s new budget Thursday, after thousands protested this week against expected government budget cuts.

The country, which has one of the largest economies in Europe, is fighting to bring down its huge deficit, which threatens the stability of the euro, the currency used by hundreds of millions of people across Europe.

Prime Minister Mariano Rajoy said in July that the country would cut 65 billion euros ($83 billion) from the budget in three years by raising taxes and shrinking bureaucracy.

But Spaniards have taken to the streets to demonstrate against austerity measures, and are expected to do so again after expected new cuts are unveiled.

Clashes between police and demonstrators in central Madrid’s Neptuno Square resulted in 28 people being hurt Tuesday, two of them police officers, a police spokesman said.

The spokesman said 22 people among the estimated crowd of 6,000 had been arrested.

Demonstrators said police were shooting into the crowd with rubber bullets; police would not comment.

"We have you surrounded," some demonstrators sang. "We have no fear."


Jim Sinclair’s Commentary

There is no way on earth to significantly margin the nominal value of all outstanding OTC derivatives, even just those with America stamped on them.

With Wall Street owning Washington you can be sure this will morph into tokenism.

Fed moves to delay capital rule for swaps, again
By Ronald D. Orol
Sept. 26, 2012, 3:00 p.m. EDT

WASHINGTON (MarketWatch) — Federal regulators on Wednesday moved for a second time to lengthen a comment period and delay adoption of a proposal seeking to ensure big bank derivatives-trading institutions have enough capital to survive future major credit crunches. Five federal agencies, including the Federal Reserve, are allowing banks and others until November 26 to comment on a proposal seeking to set up margin and capital requirements for so-called "swaps-dealers" or "major swap participants" including major U.S. banks. The agencies proposed the rule, required by the post-crisis Dodd-Frank Act, in April, 2011. In June, 2011 the agencies extended the amount of time interested groups had to comment on the proposal until July 11, 2011, a deadline that was in place until the extension announced Wednesday. The agencies said that the extension was put in place to give interested groups more time to consider the proposal and how it relates to a global bank derivatives capital requirement also under consideration.



Jim Sinclair’s Commentary

Precious metals are rarely transported physically across borders except by people who know little or like self destruction, certainly in excess of a value of $10,000.

They change location by simultaneous sale and purchase, not yet prevented by any law or limited in amount.

I will do my best to let you know when and if it is.

Traveling  With Precious Metals
By Robert E. Bauman

Imagine you are docilely going through the long security line at  John F. Kennedy International Airport, headed for your overnight  flight to London Heathrow. As your carry-on bag goes through the  X-ray, a burly TSA agent is called over to confer with the machine  operator. He then looks at you and says: "Please come with me, sir."

As you are led to a small cubicle, you nervously try to think of  what you might have done wrong. While you open your bag as instructed,  the stern-faced TSA agent points to a small package and demands  to know what it contains. Inside are antique, collectible gold coins  that you intend to sell to the same British dealer from whom you  bought them years ago, but now they are worth much more.

Now the agent says: "I’m sorry, sir, I will have to confiscate  them, but I will give you a receipt. You have the right to file  an appeal."

You stand there dumbfounded, the whole purpose of your journey  destroyed.


Jim Sinclair’s Commentary

Major accomplishments, without self realization, is a total life waste. Accolades, in truth, mean nothing. Don’t you think knowing publicly that QE to Infinity was unavoidable years ago, and suggesting preparation for its colossal impact on economies for more than 10 years ought to get you say, a gold star? Nay, only the good old boys from Skull and Bones get such recognition. So far I have been privileged to have the best two market expectations possible in the history of markets, and the net result is if I charged for JSMineset, I might have five readers.

When we call full valuation of gold correctly, we will be forgotten forever. It could be that what you give away has only the value people pay for it. A conservative group in New York that I spoke for last year discussing all that has occurred did not invite me back to speak this year. On a March 2009 Bloomberg radio interview I called the bottom of the bear equity market within two weeks and gold’s trip to $1650. That guarantees you will never hear from them again.

I owe you two more accomplishments. First a corporate success of the same caliber and then full valuation on gold. Assuming that I pull these last two major efforts off, and I know I will, then I will say goodbye to markets and company building forever. I am sure Bert and Jesse are proud of me.

Fed Stimulus Goes From ‘Shot In The Arm’ To ‘QE4-Ever’
Posted 09/20/2012 06:21 PM ET

We really ought to quit calling the Federal Reserve’s latest round of quantitative easing "QE3."

Federal Reserve Chairman Ben Bernanke’s third round of quantitative easing is to go on indefinitely, institutionalizing his money-pumping policies. The Fed will buy mortgage securities, at a rate of $40 billion per month, until he feels better about the state of the labor market — an immeasurable standard subject to the political whims and pressures of the day.

This "quantitative" easing is unquantifiable.

Bernanke skipped right over QE3 and went straight to QE4-ever. After four years of aggressive interventions, there is still no discernible strategy for the Fed to extract itself from the market, prevent inflation, or address the high costs of financing our ever-increasing deficit.

If the first two rounds of easing were supposed to be a "shot in the arm" for the economy, now the Fed is shoving an intravenous drip into it — action that’s sure to foment a nasty dependency on cheap and constant cash.

Our printing press is a dangerously addictive painkiller. The Fed has dumped more than $2.3 trillion into the economy since 2008. Yet, all this cash hasn’t healed the economy, it’s just given it an insatiable craving for more. A recent New York Fed study showed that over half the last decade’s stock market gains, according to one major index, are due simply to expectations the central bank will act.



Jim Sinclair’s Commentary

Front running orders and jumping ahead of the legitimate buy and sell interest have always been considered illegal.

It is disturbing when run by machines in Germany. Illegitimate automaticy is as bad as naughty floor traders that used to sanctioned hard for front running legitimate buy and sell orders. We live in the darkest times in finance where illegality is considered good business if the fine is less than the net income.

Germany Acts to Increase Limits on High-Speed Trades
Published: September 25, 2012

BERLIN — Germany intends to be one of the first countries to try to put the brakes on high-frequency trading, the computer-driven force that has been rattling stock markets across the globe.

Frequent traders at the Frankfurt stock exchange would have to be licensed under a pending law.

Chancellor Angela Merkel’s government approved draft legislation on Wednesday that foresees imposing additional controls on such trading. The proposed measures include requiring that all high-frequency traders be licensed, requiring clear labeling of all financial products traded by powerful algorithms without human intervention and limiting the number of orders that may be placed without a corresponding trade. Traders who violate the limits, which would be set once the law took effect, would face a fine.

“Computer-generated algorithmic transaction involves a variety of new risks,” Germany’s finance ministry said in a statement. “Germany is reacting to these risks with legislation that will create more transparency, security and a better overview.”

The legislation, which is subject to approval by both houses of Parliament, was written with an eye toward similar legislation being discussed in Brussels that could eventually apply across the European Union, which has 27 member nations, the official said.

Steps to pass the broader legislation on high-frequency trading are expected to proceed Wednesday, when the influential Committee on Economic and Monetary Affairs of the European Parliament will vote on how to update the law that governs securities trading to take account of new technologies.


Jim Sinclair’s Commentary

For most of the 1900s the clarion call on the floor of the New York Stock Exchange (a once popular exchange if you recall) was "As goes Motors so goes the US."

Nothing has changed and this saying is as accurate in 2012 as it was in 1950. Motors may well require another bail out

The entire Western financial world is in the financial ICU, taking liquidity into the main blood vessel to INFINITY from their respective central banks.

GM Says ‘Nobody’ Makes Money Amid European Car-Price Cuts
By Craig Trudell, Christian Wuestner and Mathieu Rosemain – Sep 27, 2012 7:07 AM MT

General Motors Co. (GM) said Europe’s car industry will remain unprofitable at current vehicle pricing levels, while Volkswagen AG (VOW) said some competitors are at risk of going out of business without state aid.

Competitors Fiat SpA (F) and PSA Peugeot Citroen (UG) are producing “very scary numbers” with discounts of as much as 30 percent off gross sale prices, Susan Docherty, who runs European operations for GM’s Chevrolet unit, told reporters today at the Paris Motor Show. “Nobody can make money in Europe when you’ve got incentives at that level.”

Demand has plunged so much that deliveries continue to tumble, even with such large discounts. Although discounting in Germany is at the highest in more than a year, according to industry publication Autohaus PulsSchlag, car sales across Europe may fall to a 17-year low, the region’s main auto- manufacturing trade group has predicted.

“The biggest problem for the industry is the complete meltdown of pricing discipline,” Erich Hauser, a London-based analyst at Credit Suisse, said by phone. “The two guys with the most stretched balance sheets are clearly Fiat and Peugeot.”

Fiat, forecasting a loss of about 700 million euros ($900 million) in the region for 2012, isn’t introducing any new models at the Paris event, Europe’s biggest showcase for carmakers this year.