In The News Today

Posted at 11:59 AM (CST) by & filed under In The News.

My Dear Friends,

Today in Japan leadership said it is the goal of the central bank to double QE. In Europe, Draghi said they will do whatever is required.

Now if the US economic figures move from the flat line to down the dollar will promptly return to .7900 and below. Gold will then seek a new high.

Sincerely,
Jim

 

Jim Sinclair’s Commentary

This futuristic missive sounds just about right. Gold has hit $3992 late 2014 and reacted hard off the near $4000 round number level as would be expected.

Blast From the Future on the Crash of 2015
Published: Tuesday, 2 Apr 2013 | 12:19 PM ET
By: Peter J. Tanous, President of Lepercq Lynx Investment Advisory

CAYMAN ISLANDS, January 2016 – Today’s paper says we should have seen it coming.

The facts were all there. Were we really that stupid?

For three years, the Federal Reserve was the largest buyer of Treasury securities, scooping up two-thirds of all U.S.securities sold at auction, driving interest rates down to practically nothing. In the process, the Fed built up a $4 trillion dollar balance sheet and no one asked where that money was going to go.

How did the Fed pay for these securities?

They "printed money." And look what they got out of thin air: Interest-paying U.S.government bonds that produced an annual profit of more than $80 billion!

The Fed magnanimously turned over most of those profits to the Treasury every year. Media editorials congratulated the wise men for their financial acumen and their sterling sense of responsibility.

It took far too long for other purchasers of U.S. Treasurys to realize that they were buying into a house of cards.

More…

Jim Sinclair’s Commentary

A key lesson the puppies teach is remember to nap.

clip_image001

 

Jim Sinclair’s Commentary

Must be a loyal reader of JSMineset and listener of King World News.

Gold Trader: “Once This Bottom Is Formed, We May Never See Gold At These Levels Ever Again.”
April 4, 2013 | By Tekoa Da Silva

**This interview was recorded Wednesday evening, 4/3/2013**

I had the chance yesterday to speak with technical gold trader Gary Savage, publisher of the “Smart Money Tracker”, daily gold market commentary and trading service, which has outperformed most of the world’s hedge funds in 2011 and 2012.

It was a powerful conversation as Gary commented on the panic selling we’ve seen over the last few days, sharing his view that “once this bottom is formed, we may never see gold at these levels ever again.”

Despite continued and relentless selling, Gary commented that, “Gold isn’t in a bear market, it’s [just] been in a consolidation since the top of September 2011. If you pull up a 13-year chart, it shows that gold is not in a bear market, not even close. The miners however, are in bear market, and they have been for 19 months now, and they’ve lost 50%. That’s about an average cyclical bear market…[So] I think the miners are [primed] to bottom along with gold at this yearly cycle low, which I don’t think occurred today, but I think we’re within a day or two of that final bottom.“

When asked about valuations on mining stocks at these levels, Gary said that, “The valuations in the miners are absurd. The gold XAU ratio is higher than it’s ever been before in history. This is coming at a time where the miners have gotten the hint…management is cleaning up their act…[and] the sector is doing what it needs to do to turn itself around. [But] since the trend is down, people just invent reasons for why the miners should continue to go down. Eventually rationality is going to return, people will recognize that mining stocks are not going bankrupt, and they’re just too insanely cheap.”

More…

 

Jim Sinclair’s Commentary

For all of you that doubt the real size of the derivative mess which is over one quadrillion, one thousand trillion dollars, here is what the BIS published in the summer of 2007. This number caused an immediate panic among government financial people.

The Bank for International Settlements changed the computer method of calculating the notional value, and reduced the number by over 50%. Now people believe the lower number to be true which it is NOT because of the constituents of that computer method program can only yield a total cartoon by assuming that full maturity of all obligation pays off.

Copy of derivativesgraph2

 

Jim Sinclair’s Commentary

From the deepest of depressions to the highs of elation, gold is there.

 

 

Jim Sinclair’s Commentary

This tape underscores my position that this government sponsored depreciation of gold is part of the many Hail Mary plays being made as the machinations of many central banks will end in their tears.

Gold will make a new high from the lows already set before February. In retrospect this manipulation of gold will only be seen in history as a gift to China and Russia.

Click here to watch the video…

 

Jim Sinclair’s Commentary

If I am 9 days wrong will you please forgive me? Bo and Sandy say yes.

We love you Mr. Jim  2

 

Jim Sinclair’s Commentary

He should be a bit more careful. High tech hot war with North Korea would be a perfect diversion as the flat line economic recovery of the West starts to turn down.

Untitled

 

Jim Sinclair’s Commentary

Manipulators, governments and private traders can paint gold however they wish, but to maintain the lower levels they must feed it daily. Once a sovereign appears the manipulation is finished on the down side.

Gold will trade to a new high as well as at and above $3500 because of the following.

The Cyprus Effect

The impact of the crisis in Cyprus is almost like a butterfly effect. It is so tiny that one cannot imagine it having a global impact. Yet, its crisis has dented global markets to the tune of trillions of dollars, hundreds of times the direct cost of the crisis. This demonstrates the inherent instability of the global financial system. A small change in perception can lead to big price moves on financial markets.

The troika solution to the Cyprus problem breaks two taboos regarding financial bailouts of the past five years. It wipes clean the rescued banks’ senior creditors and gives large depositors a serious haircut. If creditors and depositors adjust their risk assessment, weak banks around the world could go under, taking down the global economy. Even if the chance of this is small, the consequent price adjustment in the global financial markets is significant.

The global financial system is holding major central banks and governments hostage. The Cyrus bailout addresses one serious flaw in today’s financial system – the under pricing of risk due to implicit government guarantees. When a weak bank offers high interest rates to attract creditors and depositors, that latter are enticed because they assume government bailouts will prevent them from suffering losses. Hence, weak banks can survive by raising interest rates. They are incentivized to gamble in a high-risk investment. If they are lucky, they survive. If not, they fail, as they would anyway. Such a vicious cycle deepens the cost of a final bailout. Hence, the Cyrus solution puts creditors and depositors on notice. It should be a very healthy development.

The impact of the financial crisis in tiny Cyprus reminds us that governments and central banks are beholden to the global financial system. When they try to remove a flaw in the system, the resulting market reaction can bring down the whole house. Imagine that Italians were withdrawing all their deposits, would the European Central Bank be forced into guaranteeing all deposits? The expectation for that is preventing people from taking their money out. Hence, the bailout expectation is the key to stability.

The global financial system is so flawed that its stability depends on implicit government guarantees. Unfortunately, such guarantees ensure that such weaknesses persist. The vicious cycle keeps the global financial system permanently unstable.

More…

 

Jim Sinclair’s Commentary

Is the flat line recovery going to take a downside tangent? The answer is yes.

U.S. unemployment aid applications jump to 385,000
Published April 04, 2013

The number of Americans seeking unemployment aid rose to a four-month high last week, although the increase partly reflects seasonal distortions around the spring holidays.

Weekly applications increased 28,000 to a seasonally adjusted 385,000, the Labor Department said Thursday. It was the third straight weekly increase and the highest level since late November. The four-week average, a less volatile measure, rose to 354,250.

A Labor Department spokesman says it can be difficult to seasonally adjust the figures during the Easter holiday because the timing of the holiday varies from year to year. Economists warned before the report that the data could be volatile.

Applications are a proxy for layoffs. The recent increases could suggest that companies are cutting jobs, possibly because of steep government spending cuts that began on March 1. Other reports have pointed to that possible trend, although most economists have said that any reductions are likely temporary.

More…