In The News Today

Posted at 7:25 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

For your sake GOTS tomorrow.

Still no deal on EU-wide bail-in regime
FXstreet.com

The opposing views between Germany and France on how to approach the “bail-in” procedure is still the main problem, as disagreement builds when trying to find a deal on bondholders and large savers sharing the costs of the banks’ collapse.

 

Jim Sinclair’s Commentary

The same will not be true for the Wall Street demons. Their pal Bielzibab is waiting for them.

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Jim Sinclair’s Commentary

The day the dollar will fade into the high 60s on the USDX. Note the pillars all standing then the real gold market will be in gear.

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To Frustrated Gold and Gold Share Holders:

I understand your frustration but there is simply only one thing to do at this time and that is to stand firm and ignore the MSM. This smash down in gold is a manufactured one and only serves to allow the East to purchase even more gold at bargain basement prices. This phase will pass soon enough and gold will resume its upward trajectory once again to challenge the all time high.

The Golden Mean:

The Golden Mean is used as a trading system by some traders. The ratios .382 and .618 are commonly used and you are correct that in approximate terms we are around about a 38.2% from the paper gold 1920 high.

Stand Strong And Firm In Your Physical Gold And Gold Share Positions:

There is no doubt this is a war and you will not win by giving your positions away at this time. Of course, the decision is yours to make but what we are seeing now is an attempt to separate people from their gold before the market resumes its bull run. If the average investor sells now they will never psychologically be able to buy back in. Now is the time to bunker down and not listen to the news and remember why you bought gold in the first place. It is an insurance policy against the economic madness that is gripping the world.

Selling Gold and Gold Shares:

The only point I would add is that those who are contemplating exiting their physical bullion positions or gold shares need to ask themselves why they bought them in the first place. The only reason the average person should be buying gold, whether it be the metal or shares, is for the purposes of insurance against the economic and currency related crises we are now facing. That being the case, now is the worst time to be abandoning positions.

Present Time Commentary

I have stated my view on gold and that it will challenge and take out the all time highs and move towards $3500.

I have consistently said that in order to protect your wealth an investment in gold is prudent but that you should look upon your gold ( whether it be physical and/or quality gold shares) as insurance against pitiful and economic uncertainty and the endless money printing by Central Banks. To that end I have stated that you should seek to store physical gold in allocated form in a place such as Singapore.

If you were to buy gold stocks ensure that they only be those with mineable ounces, low costs, cash in the bank, multiple 43-101s and have forward looking management. If you do buy shares then once they are purchased you should see that they are directly registered in your name with the company’s transfer agent. Once that is done you can also have paper certificates issued in your name.

If you have money in bank limit the deposit at $5000 to meet your day to day obligations and relocate excess liquidity to a bank in Singapore, Hong Kong or Taiwan to avoid the implications of the bail in. You will have to travel to those countries to open an account as it can only be done personally.

QE:

My advice is that there is no practical prospect whatsoever that QE will end as to do so we would see the stock market drop by 2000 points in two days. Your assessment is correct and in order to maintain your peace of mind regard the MSM as just noise. This manipulation is a ruse to try and separate people from their gold and gold stocks. We must stand firm and bunker down to survive this crisis.

 

Jim Sinclair’s Commentary

Having trouble in Canada getting direct registration of qualified shares? You should consider changing your broker. I suggest you contact Sprott Global Resource Investments Ltd and ask to speak to Mishka vom Dorp. Their website is http://sprottglobal.com.

 

Jim Sinclair’s Commentary

Each step forward for the Chinese currency is a step backwards for the US currency.

UK and China in £21bn currency swap deal

The Bank of England and its Chinese counterpart have signed a deal likely to boost trade between the UK and China in the yuan.

The Bank and the People’s Bank of China have signed a three-year currency swap arrangement worth 200bn yuan (£21bn, $33bn), the UK central bank confirmed.

The UK is looking to become a centre for the Chinese currency, also known as the renminbi.

British banks hold 35bn yuan worth of deposits in the Chinese currency.

Currency-swap agreements allow central banks to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China’s currency is not fully convertible to other currencies.

The prospective deal was first announced in February by BoE Governor Sir Mervyn King.

“In the unlikely event that a generalised shortage of offshore renminbi liquidity emerges, the Bank will have the capability to facilitate renminbi liquidity to eligible institutions in the UK,” Sir Mervyn said on Saturday.

Last year, the UK Treasury announced plans to make London – the world’s largest currency trading hub – the leading international centre for trading the yuan outside mainland China and Hong Kong.

More…

 

Jim Sinclair’s Commentary

Ms. Lagarde of the IMF declares war on Bernanke. Who will win?

“The Basel-based BIS lambasted firms and households as well as the public sector for not making good use of the time bought by ultra-loose monetary policy, which it said had ended up creating new financial strains and delaying rather than encouraging necessary economic adjustments.”

“The BIS said in its annual report that a rise in bond yields of 3 percentage points across the maturity spectrum would inflict losses on U.S. bond investors – excluding the Federal Reserve – of more than $1 trillion, or 8 percent of U.S. gross domestic product.
The potential loss of value in government debt as a share of GDP is at a record high for most advanced economies, ranging from about 15 percent to 35 percent in France, Italy, Japan and Britain. “As foreign and domestic banks would be among those experiencing the losses, interest rate increases pose risks to the stability of the financial system if not executed with great care,” the BIS said.”

“The BIS acknowledged that bond yields were unlikely to rise 3 percentage points overnight. But it noted that big moves can happen quickly: in 1994 yields in many advanced economies rose by about 2 percentage points in the course of a year.”

“JUST GET ON WITH IT
Brushing aside the contention that austerity is counterproductive, the BIS said countries must redouble their efforts to make their debt manageable because growth alone will not do the job.”

“Not only has the debt of households, firms and governments increased as a share of GDP in most countries since 2007, but debt-service ratios are now higher in most rich countries than the 1995-2007 average – despite low interest rates. The country with the highest debt ratio is Sweden. And governments have balked at labour and product market reforms, despite overwhelming evidence that making it cheaper to lay off workers and reducing the barriers to competition in sectors such as retailing would deliver a big boost to growth.
Expecting monetary policy to solve these problems is a recipe for failure, the BIS said.”

Link to full article…

 

Bondholders would lose more than $1 trillion if yields spike – BIS
By Alan Wheatley, Global Economics Correspondent | Reuters

LONDON (Reuters) – Bondholders in the United States alone would lose more than $1 trillion (648 billion pounds) if yields leap, showing how urgent it is for governments to put their finances in order, the Bank for International Settlements said on Sunday.

The Basel-based BIS lambasted firms and households as well as the public sector for not making good use of the time bought by ultra-loose monetary policy, which it said had ended up creating new financial strains and delaying rather than encouraging necessary economic adjustments.

The BIS, a grouping of central banks, was one of the few organisations to foresee the global financial crisis that erupted in 2008.

Since then, government bond yields have sunk as investors seek a traditionally safe place to park funds, regulators tell banks to hold more bonds and central banks buy bonds as a means of pumping money into vulnerable economies.

The BIS said in its annual report that a rise in bond yields of 3 percentage points across the maturity spectrum would inflict losses on U.S. bond investors – excluding the Federal Reserve – of more than $1 trillion, or 8 percent of U.S. gross domestic product.

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Jim Sinclair’s Commentary

Even the security department gets some time off. Angel comes from a long line of junk yard guard dog but I love her. She lacks a degree of refinement but makes up for it but being my protector.

See, she is keeping one eye out for me.

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Jim Sinclair’s Commentary

GOTS today!

Look at the Cyprus situation as a case study. Cyprus was effectively a financial experiment which provides you with a blueprint for what the system has in store for us all. The very first proposal in Cyprus was the nationalization of all retirement accounts.

In other news, the DRS process is simple and inexpensive. All that is required is that the shareholder find a broker willing to accept such instructions and pays the nominal fee. If your current broker does not want to do DRS you must find another, of which there are many.

 

Introducing “ISDA risk” – it’s like basis risk, but more annoying
Lisa Pollack | Jun 21 13:13

How many different types of risk can you name?

Operational risk, market risk, liquidity risk, legal risk, credit risk, etc. Now, let’s add “Isda risk” (pronounced Izzz-dah risk, it has the added benefit of making one’s risk manager sound like a rapper, which hopefully we all can agree is hilarious):

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The above table shows what is, in polite company, called a “technical movement”. This one involves senior and subordinated credit default swap spreads for European financials compressing after the International Swaps and Derivatives Association circulated some draft proposals in May. The proposals covered amendments to existing swap documentation that might ultimately see brand new CDS trading on financials — possibly alongside the existing swaps.

The compression move has actually been going on for some time:

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The longer term move is the logical consequence of doubt being cast on the ability of financial CDS to trigger and payout in a economic way — by which we mean in a way that reflects what actually happened to creditors of the equivalent cash instruments — particularly when it comes to subordinated CDS on banks.

More…

 

Jim Sinclair’s Commentary

The sharks are eating the sharks. Just those Bernanke rescued have turned on him.

How he handles them is how history will see his chairmanship.

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N.S.A. Leaker Edward J. Snowden Leaves Hong Kong, Local Officials Say

The Hong Kong government announced on Sunday afternoon that it had allowed the departure from the territory of Edward J. Snowden, the former National Security Agency contractor who has acknowledged disclosing classified documents about United States government surveillance of Internet and telephone communications around the world.

A Moscow-based reservations agent at Aeroflot, Russia’s national airline, said that Mr. Snowden was aboard flight SU213 to Moscow, with a scheduled arrival there a little after 5 p.m. Moscow time. The reservations agent said that Mr. Snowden was traveling on a one-way ticket to Moscow.

More…