In The News Today

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Jim Sinclair’s Commentary

This has been our thesis and mindset from 2008 forward. QE is for the Banksters and nothing else. The problem is there is no other tool able to create unlimited liquidity at the push of a computer button via electronic money transfers.

The world as we knew it ended with the flushing of Lehman. There is no way back.

Gold will go to and above $3500. The single reason for this monetary and human disaster is the manufacturing and distribution of OTC derivatives, a fraud from day #1.

Secrets and Lies of the Bailout
The federal rescue of Wall Street didn’t fix the economy – it created a permanent bailout state based on a Ponzi-like confidence scheme. And the worst may be yet to come
By Matt Taibbi
January 4, 2013 4:25 PM ET

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It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque form of then-Treasury Secretary Hank Paulson, committed $700 billion in taxpayer money to rescue Wall Street from its own chicanery and greed. To listen to the bankers and their allies in Washington tell it, you’d think the bailout was the best thing to hit the American economy since the invention of the assembly line. Not only did it prevent another Great Depression, we’ve been told, but the money has all been paid back, and the government even made a profit. No harm, no foul – right?

Wrong.

It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people. We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite: committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyperconcentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk rather than reduce it. The result is one of those deals where one wrong decision early on blossoms into a lush nightmare of unintended consequences. We thought we were just letting a friend crash at the house for a few days; we ended up with a family of hillbillies who moved in forever, sleeping nine to a bed and building a meth lab on the front lawn.

But the most appalling part is the lying. The public has been lied to so shamelessly and so often in the course of the past four years that the failure to tell the truth to the general populace has become a kind of baked-in, official feature of the financial rescue. Money wasn’t the only thing the government gave Wall Street – it also conferred the right to hide the truth from the rest of us. And it was all done in the name of helping regular people and creating jobs. "It is," says former bailout Inspector General Neil Barofsky, "the ultimate bait-and-switch."

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Jim Sinclair’s Commentary

The possibility that gun legislation is going to be in the form of a Presidential Order is really playing with significant fire. This is not an isolated instance.

Kentucky Sheriff to Feds: ‘You Are Never Going to Pull Guns Out of Jackson County’
by AWR Hawkins 13 Jan 2013, 4:46 AM PDT

As I wrote on Jan. 11, Jackson County Kentucky Sheriff Denny Peyman has made it clear that gun laws which violate the United States Constitution or the Kentucky Constitution will not be enforced in his county.

On Jan. 12, he followed this up with a press conference in which he explained that a Sheriff’s powers are predominant over the powers of federal and state agents. When he says these things he drives gun-grabbers batty because he says them with the conviction that rests on knowledge, and he has no intention of backing down.

During the press conference, he took time to explain his powers as sheriff:

I am responsible for the people inside this county. I am the highest elected official in this county, and this is the only opportunity the people have to speak for themselves and say ‘this is what we want.’

I can ask federal people to leave, they have to leave. I can ask state people to leave, they have to leave. …[And] it doesn’t matter what [new laws] Obama passes, the sheriff has more power than the federal people. 

He said that if federal gun-grabbers don’t understand this, then "they need to go back and study it," because Kentucky "is a commonwealth."

Peyman says he has been approached by liberals within the gun-grabbing world since he made his original promise of no gun control in his county, and he told them plainly: "You are never going to pull guns out of Jackson County."

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There’s a sound in the mountain range that’s even scarier than the cliff. It’s the sound made by an avalanche, the trillions of dollars of debt that’s heading our way, gathering speed and mass.” True enough, but there’s a sound even scarier than that—the sound made when a shock liquefies a world economy built on Keynesian economics.
–Mortimer Zuckerman 12/28/12

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Jim Sinclair’s Commentary

This is our source for correct statistics. I feel John deserves our subscription. The only connection I have with Mr. Williams is simple respect.

- Official Inflation-Adjusted Merchandise Trade Deficit Hit 4-1/2 Year High
- Implications for Weaker Advance-Estimate of 4th-Quarter GDP
- Consumer Structural-Liquidity Issues Continue

"No. 493: November Trade Deficit"
Web-page: http://www.shadowstats.com

Jim Sinclair’s Commentary

Another face of the hedge funds in gold.

Financial Manipulation? Hedge Fund Operations Are Affecting the Gold Market 
By Mike Swanson 
Global Research 
January 09, 2013

The price of gold has been kept down by hedge fund redemptions. These redemptions will end in a week and after that a nasty hand that has been holding the price of gold down will be lifted. As we begin this new year news is starting to trickle out demonstrating that hedge funds as a whole have had a horrid performance last year.

According to incoming data nine out of ten hedge funds failed to beat the S&P 500 last year. According to a recent report by Goldman Sachs their average return was 8% while the S&P 500 posted a 13% gain for 2012.

What is worse is that the third worst fund tracked by HSBC was the Paulson Advantage Fund. This fund of 19 billion dollars lost 19% last year due to bets that the European euro crisis would continue and that gold would rise. It is one of the largest holders of the SPDR Gold TrustETF (NYSE: GLD) and has been forced to meet investor redemptions.

These redemptions have undoubtedly caused selling in GLD in the past few weeks and will probably continue to hold gold prices down for another week. John Paulson also runs a gold fund that gave its investors a negative 25% return last year too. Paulson is not the only hedge fund manager facing big losses being forced to sell to meet investor redemption requests.

Most funds though didn’t generate huge losses, their program trading algorithms simply failed to beat the market. Ironically a few funds did beat the market last year by investing in places others wouldn’t. Dan Loeb’s Third Point hedge fund posted a 21% gain in 2012 by betting big on Yahoo and by buying Greek bonds. Pine River Capital Management also made 30% by holding depressed mortgage securities.

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