Posted at 1:46 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

No one shall pass!


Jim Sinclair’s Commentary

Today all is well in the world of economics so gold goes down on higher interest rates.

Spot The Housing Starts Outlier
Submitted by Tyler Durden on 05/19/2015 11:42 -0400

Earlier today, housing starts shocked to the upside when they printed at 1.135MM, smashing estimates of 1.015MM, and representing the single biggest monthly jump since 1991. The entire surge was due to one single number.

As can be seen on the chart below, the last time single-family housing starts in the Northeast soared as much as they did in was in June 2008, just before the financial system nearly collapsed.


And in the case the outlier is still not quite obvious, here is the data since the start of the depression (which has so far been papered over with $22 trillion in central bank "asset" holdings) zoomed in:


Bottom line: the April surge was the offset of the February plunge, which suggests a renormalization of the trend once the recent volatile data renormalizes. Unless, of course, it rains in the spring when the San Fran Fed’s double seasonal adjustments may be inevitable.


Posted at 10:21 AM (CST) by & filed under Bill Holter.

Dear CIGAs,

A few months back I theorized the rest of the world led by a Chinese/Russian alliance might let loose with a "truth bomb" or a series of them. It is clear the U.S. has been on a pathway in the desire to start a war. We have pressed in Syria and the Ukraine but so far to no avail. From the standpoint of the U.S., it is my opinion that a war is "necessary" to point at and blame for the financial collapse surely coming because in no way can "policy" be blamed.

The upcoming month of June will be a telling one as the situation in Greece comes to possibly a final head. Tiny Greece is important for several reasons. The first and most obvious, they are certainly a firing pin for the derivatives market. Should they default, what will it be called? Somehow, some way, a Greek default cannot be classified as one because a cascade of failures will immediately follow. Financially, Greece can take the Western financial system down all on its own.

Next, Greece is also a member of NATO, what will they do when the current economic and financial sanctions on Russia run out? Will they vote to extend the sanctions or vote in their own interest against them? Or, will they accept financial help and the cash flow from the proposed natural gas pipeline? A lesser question is what will happen to their EU status? Will they quit, get kicked out or remain as a black sheep in a dirty family?

I ask these questions again because Greece now says they will run out of money on June 5th. They have already pilfered pension funds and sequestered local agency monies, while pleading for the previously pledged but so far withheld aid. Atop this and more important are the sanctions on Russia due to end also in June. June is a very pivotal month!

To this point, the Chinese and Russians have been patient but firm dealing with the U.S.. Russia has warned about arming western Ukraine and placing firepower on Russia’s borders. China has sternly warned the U.S. regarding the disputed islands in the South Sea, a near spark incident was avoided last week. My point is this, the U.S. has been pushing while Russia and China have stood their ground. How long this can go on without some sort of "accident" morphing into conflict is questionable. As an example are the recent events surrounding the Spratly islands in the South China Sea, can the U.S. really push China in their own back yard? China and Russia are fully aware of the U.S. falling further and further into a weakened position in many ways, time is running out before a financial collapse and they know a wounded animal often strikes in desperation. They must in my opinion do something very soon to neutralize the U.S. or face the reality of fighting.

As I began with, I believe the only form of neutralization is some sort of "truth bomb" or a series of them. How best can this be done? I believe it must and will be done "financially", let me explain. If the ROW can neuter the U.S. financially, they will seriously hamper U.S. efforts to make war. As a side note, "the truth" will also take most all public support away for making war. I believe the process may have begun this past week.

While you may react with "oh it’s just propaganda" because of the source, Pravda posted an article over the weekend speculating China will very soon announce their gold reserves. The article speculates China has amassed 30,000 tons of gold. This may or may not be true, but I can easily prove 10,000 tons just on the back of a napkin. Whether the number is 10,000, 30,000, more or somewhere in between is moot in my opinion because it is MORE than the U.S. "claims" to have. It would also call into question "where" exactly all of this gold came from. As I have written before, China need not ask for an "audit" of Western gold, should they provide audited numbers, market participants will make the connection themselves.

I believe there are several questions needing to be asked. Is this a "30,000 ton bluff" by Russia? I don’t think so but if it is, what is the upside? Would Russia really throw this figure out publicly without clearing it with Beijing? Would China really bluff about how much gold they have? My opinion is no, they would not. I have said all along I believed China would announce their holdings probably this year. If this is the "pre pre announcement", it is a very big number and one I believe only as an opening salvo. Should China themselves make this announcement, please understand the "golden nuclear bomb" this would actually be. The financial system of the West will be destroyed overnight!

Before going any further, let me put a few of the various dots on the table. First and maybe what they were waiting for, the Western credit markets have had two very big convulsions in the last 10 days, these flash crashes have occurred as nearly all liquidity was briefly lost. While speaking of liquidity, this seems to be drying up across the board including the equity markets as volume has gone comatose. U.S. economic numbers are unmistakably weak and recession will be known by the end of June or early July. Another classic sign of illiquidity is the shortage of collateral available to the shadow banking systems in both the U.S. and in Europe,. A "margin call" to a system undercapitalized and under collateralized is a deadly recipe.

We also saw a story last week where several of the larger ETF’s have contracted for rather large credit lines to use in a "market event" causing mass liquidations. This is an entire story in itself and a humorous one at that! What makes the ETF’s believe their financial institution will be left standing and able to lend during a panic? And even if standing, during bad times the old saying goes …"credit lines are made to be pulled"! Worst of all, if they actually do use the credit lines because their various investments cannot be sold, won’t this ultimately injure remaining shareholders and make those who panicked first …the best? And especially if their investments do not immediately snap back, they will be required to sell more and at lower prices just to pay the loans (if they get them) down! Very poor "preparations" if you ask me.

Other dots include, the AIIB, an alternative clearing system to SWIFT, currency hubs all over the world, physical metals exchanges and even the ABX which plans to arbitrage between Eastern and Western markets. China has very rapidly recreated the "old silk road" trading route which includes both Iran and Greece, both sticking points in the side of the West.

I believe the Sino/Ruso alliance now sees weaknesses in the West, it is exactly what Sun Tzu would look for. The economy is slowing, liquidity is drying up and leverage is maxed out. Volatility has now struck the all important credit markets of which are relied on to support the West’s way of life. What is next? I believe an announcement of China’s holdings will only be the beginning and put the U.S. on her heels as to our holdings. Next, and I mentioned this previously, I would not be shocked if Edward Snowden has done a data dump similar to what was feared with Mr. Assange of Wikileaks.

We already know of so many and various "dirty deals" which banks have pleaded guilty to, "proof" of Western deceit will be believed because of all the fines and "non" admissions of guilt already paid and entered. In essence, it very well may be the East pulls the curtain back on the Wizard of OZ! A data dump by the Russians and Chinese regarding the finances of the West (including a lack of gold), how markets are rigged and economic numbers "created", along with information regarding various false flags and the misdirection of the public would go a long way. The "questions" are numerous and may have a starting date of 9/10/01 when Donald Rumsfeld announced the Pentagon’s "missing" $2.3 trillion …which was never spoken of again after the following horrific day.

Much, if not everything has a paper trail to it. Enron’s misdeeds and hollow derivatives were conveniently washed away the following day as well as any paper trail to the "world bonds" issued during the Reagan years …and cashed in within the two weeks following 911. Nearly everything since then still has a paper trail attached to it, should Russia/China have the ability to expose and prove some of it, our financial system will be toast!

In the event of a little sunlight touching Western "dirties", currencies and bonds will be smoked along with of course the precious Dow Jones. An exposure would effectively cripple us financially, torpedo public support and effectively make it very difficult for the U.S. to run around the world further swinging a bat and stirring up war. In essence, an exposure would take the ability to point blame elsewhere off the table …and the past policy itself will finally eat the blame it deserves!

Bill Holter, for the Holter/Sinclair collaboration


Bill Holter writes and is partnered with Jim Sinclair at the newly formed Holter/Sinclair collaboration.

Prior, he wrote for Miles Franklin from 2012-15. Bill worked as a retail stockbroker for 23 years, including 12 as a branch manager at A.G. Edwards. He left Wall Street in late 2006 to avoid potential liabilities related to management of paper assets. In retirement he and his family moved to Costa Rica where he lived until 2011 when he moved back to the United States. Bill was a well-known contributor to the Gold Anti-Trust Action Committee (GATA) commentaries from 2007-present.

Posted at 6:08 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

You must take GOTS seriously. This is a an article that I ask you please to read. It should take just a few minutes. He is absolutely correct about QE never ending but only being given new names and buried in the balance sheet.


May 18, 2015
New York City

Remember all that talk about “taper” last year?

After years of conjuring trillions of dollars out of thin air and rapidly expanding its balance sheet, the Federal Reserve promised to end its unprecedented ‘Quantitative Easing’ (QE) programs.

In total the Fed’s balance sheet exploded from $800 billion to $4.5 trillion between 2008 and 2014. And this wasn’t good news.

A huge balance sheet means that the Fed is overleveraged. It means that they have only a tiny margin of safety in reserve in case there are serious problems in the financial system.

Back in 2008, major banks (like Lehman Brothers, Wachovia, etc.) also had massive balance sheets that were overleveraged, and almost no margin of safety.

When things started to go bad, they all went bust.

So as the Fed spent six years printing money and expanding its balance sheet, they were taking on a substantial amount of risk.

Then in 2014 it supposedly came to an end.

Both Janet Yellen and her predecessor Ben Bernanke promised the world that the Fed would ‘taper’, meaning they would reduce and ultimately eliminate the QE bond-buying programs.

By October, QE officially ended. And the dollar started to strengthen as a result.

But it turns out this was a load of crap.

Every Thursday the Fed publishes its balance sheet for anyone who cares to pay attention, and I track this religiously.

The most recent report showed that last week, the Fed posted a massive increase to its balance sheet– $28.5 billion.

(Most of the increase came from buying mortgage-backed securities– you remember, the ‘toxic’ asset class that blew up in 2008…)

With this huge addition, the Fed’s balance sheet is once again back over $4.5 trillion… within 0.5% of its all-time high.

This is the exact opposite of ‘tapered’. It’s bloated. And dangerous.

The Fed has almost no margin of safety. And if you marked to market the value of the Fed’s assets, they would most likely be insolvent.

Think about the big picture here–

Last week I told you how the FDIC, in its own words, doesn’t think they’re prepared for the next financial crisis. And that major US banks often have razor-thin levels of liquidity.

Now we see the Federal Reserve, once again, has no margin of safety and is effectively insolvent.

And all of this is backed up by the US government that, based on its own financial statements, has a negative equity of MINUS $18 trillion.

This is hardly inspiring.

Most people been brought up to believe that banks are safe. The financial system is safe. The US dollar is safe.

But the objective data here is overwhelming: this system is not safe.

Nobody has a crystal ball… least of all me. It’s possible that things could continue like this for years. Or it could all come crashing down tomorrow. No one knows.

But in the face of so much risk, it certainly makes sense to reduce your exposure.

Hold some assets outside of this system. Own some real assets, whether gold held abroad, overseas property, or a productive business.

Consider moving a portion of your savings to a strong bank in a solvent country abroad.

Bottom line: diversify.

Don’t hold all of your eggs in one basket, especially when that basket is a nation with an insolvent government, insolvent central bank, and overleveraged financial system.

Until tomorrow, 
Simon Black 


Bank of America: Markets Are in a ‘Twilight Zone’ and It’s Time to Hold More Cash and Gold
by Julie Verhage
8:33 AM EDT 
May 18, 2015

In a note sent out this morning, Bank of America Merrill Lynch has a warning for investors:

Investors remain trapped in “The Twilight Zone”, the transition period between the end of QE and the first rate hike by the Fed, the start of policy normalization…until (a) the US economy is unambiguously robust enough to allow the Fed to hike and (b) the Fed’s exit from zero rates is seen not to cause either a market or macro shock (as it infamously did in 1936-7), the investment backdrop will likely continue to be cursed by mediocre returns, volatile trading rotation, correlation breakdowns and flash crashes. For this reason we continue to advocate higher than normal levels of cash, adding gold and owning volatility in mid 2015. Given extremities of liquidity, profits, technological disruption, regulation, income inequality…potential for a cleansing drop in asset prices cannot be dismissed. Most likely catalysts: Consumer, Rates, A-shares, Speculation, High Yield.

The note also highlights two interesting disconnects in the markets:

Investors say they are optimistic, but there is a high level of cash on the sidelines

U.S. stock prices are at record highs, but equity funds are seeing outflows

Regarding the first point, one of Bank of America’s surveys showed investor sentiment as being “risk-on," which it says is normally associated with less cash on the sidelines.


To the second point, the note says U.S. equity funds have suffered $100 billion of outflows in 2015 while the S&P 500 is near all-time highs, which its data says isn’t exactly typical.


This is HOW People Will Lose EVERYTHING — Bill Holter

Billionaire Oil CEO Demands Scientists Terminated After Oklahoma Quake Study
Tyler Durden on 05/17/2015 18:14 -0400

The billionaire CEO of Continental Resources told a dean at the University of Oklahoma that he wanted earthquake researchers fired. In one of the most transparently oligarchic tactics we have seen yet during this ‘recovery’, oil tycoon Harold Hamm demanded certain scientists be dismissed following their findings that fracking wastewater disposal was the cause of the spike in Oklahoma earthquakes. Despite his protestations recently that "I don’t try to push anyone around," as the following email obtained by Bloomberg, exposes, "Mr. Hamm is very upset at some of the earthquake reporting to the point that he would like to see select OGS staff dismissed."

As we noted previously, no matter what other problems may or may not be linked to hydraulic fracturing, or fracking, the disposal of wastewater from oil and gas drilling almost certainly is primarily responsible for the recent spate of earthquakes in Oklahoma, normally a seismologically quiet state.

That’s the conclusion of a report issued April 21 by the Oklahoma Geological Survey (OGS), in which the state geologist Richard D. Andrews and Dr. Austen Holland, the state seismologist, said the rate of earthquakes near major oil and gas drilling operations that produce large amounts of wastewater demonstrate that the quakes “are very unlikely to represent a naturally occurring process.”


Belligerent US Refuses To Cede Control Over IMF In Snub To China
Tyler Durden on 05/17/2015 14:15 -0400

One story that’s been covered extensively in these pages over the past several months is the emergence of the China-led Asian Infrastructure Investment Bank. The bank began to attract quite a bit of attention in early March when the UK decided, much to Washington’s chagrin, to make a bid for membership. The dominoes fell quickly after that and within a month it was quite clear that The White House’s effort to discourage its allies from supporting the new institution had failed in dramatic fashion.

Since then, China has been careful not to jeopardize the overwhelming support the bank has received. While Beijing is keen on expanding China’s regional influence and promoting the widespread use of the yuan, downplaying the idea that the new bank will become a tool of Chinese foreign policy is critical if it hopes to enjoy the long-term support of the many traditional US allies who have become early adopters so to speak. Similarly, China must be sensitive to the perception that the AIIB is the first step towards usurping the dollar as the world’s reserve currency and although Beijing has dispelled the notion of “yuan hegemony” as nonsensical, it’s clear that the renminbi will play a key role in loans made from the new bank.

So while the AIIB certainly represents an attempt on China’s part to realize its regional ambitions (what we’ve described as the establishment of a Sino-Monroe Doctrine) and carve out a foothold for the yuan on the global stage, it’s also a product of Washington’s failure to adapt to a changing world. That is, the establishment of new supranational lenders suggests the US-dominated multilateral institutions that have characterized the post-war world are proving unable (for whatever reason) to meet the needs of modernity.


Americans Are the Most Worried About Losing Their Jobs Since 2009
And consumer confidence has taken an unexpected dip
by Tracy Alloway
10:29 AM EDT
May 15, 2015

The U.S. is supposed to be six years away from the worst of the financial crisis and ensuing recession, but Americans don’t seem to be feeling at all sure that the economy is recovering.

Results of the University of Michigan’s Consumer Confidence survey came out on Friday and showed an unexpected drop of 7.3 points to 88.6. Analysts had forecast that the index would stay roughly the same, at 95.9.

What’s more, people appear to be more worried about losing their jobs. Respondents to the survey reported the highest probability of losing their jobs since 2009.



Stocks take aim at another record high even as a ‘Great Reset’ looms
By Shawn Langlois
Published: May 18, 2015 9:09 a.m. ET

Coming off a second straight day of record closes for the S&P 500, traders are left to muse over whether stocks are butting up against resistance or forging a new path higher. The smart bet is on the latter, if the bottoming process in oil is any indication (see the chart below).

Aside from the historical trends on the crude front, we have a smattering of high-profile retail earnings, some housing data and word from the Fed later in the week that will likely go a long way in coloring the next market move. What we get might also lend some support to the idea of the pending “Great Reset” that George Mason economics professor Tyler Cowen wrote about in a post over the weekend.

“Are these economic problems transitory, or are we glimpsing the beginnings of a grimmer future?” he asks. “No one knows whether or how much of a reset may be underway. Yet I can’t help but wonder which features of current data might prove harbingers of larger, more permanent changes to come.” Check out more from Cowen in our “call” section.

In the meantime, we’re left to deal with this strangely resilient market and the light volume that continues to keep indexes crawling into uncharted territory.

An interesting trend still sticking around is that the rally this year is completely built on the first five minutes of trading. In fact, according to Jones Trading, that opening span has delivered a cumulative S&P gain of more than 4%. The total advance so far this year is at 3.1%.

Buy the close and flip the next morning has been good to short-term traders. That trend doesn’t look like it’s in place this morning. Yet, anyway.



Hugo Salinas-Price-Global Economy in a Terrible Mess, No Way Out Without Suffering
Published on May 17, 2015

Retail mogul Hugo Salinas-Price thinks what is coming is going to be an “apocalypse.” Salinas-Price predicts, “This is apocalyptic. We are in a terrible mess, and there is no way out without suffering. Apocalypse means prices are going to go haywire. Business is going to stagnate. Unemployment is going to prevail. There is going to be enormous disorder. That’s what I see will happen. We are not going to get out of this mess easily. It is going to be painful. One way to avoid pain is to have something you will be able to trade for what you need and that is gold and silver, especially gold.”

Posted at 5:19 PM (CST) by & filed under Jim's Mailbox.


China just keeps acquiring more and more relations with various countries around the world to the consternation of the US. This agreement helps the Ukraine and fosters better relations with the East.

CIGA Larry

Ukraine’s Central Bank signs USD 2.4 bln currency swap agreement with China
14:56 May. 15, 2015

The agreement was announced by the governor of the National Bank of Ukraine (NBU) Valeria Gontareva 

The governor of the National Bank of Ukraine (NBU) Valeria Gontareva and the governor of the People’s Bank of China Zhou Xiaochuan have signed a bilateral currency swap agreement worth UAH 54 billion and CNY 15 billion (about USD 2.4 billion), according to a statement posted on the NBU’s Facebook page.

According to the NBU, a new agreement for a period of three years will come into effect on June 23, 2015, and the previous agreement, concluded in 2012, will expire.

"This agreement is extremely important for our countries – strategic partners and will contribute to the economic development of both states," the statement reads, quoting Gontareva.

"The funds provided in the framework of the agreement can be used to finance trade and direct investment between the two countries."




The ECB will attempt to strip Greece of all its assets and the vultures will be left to pick Greece’s bones. Alexis Tsipras will act strong and defensive against the banksters in public but will try and dance to their tune behind the scene.

CIGA Larry

Greece has no money to pay the IMF, Alexis Tsipras warned creditors
Prime minister wrote of imminent default days before tapping emergency IMF reserves, as Germany says world will lose trust in the euro after a Grexit
By Mehreen Khan
5:30PM BST 17 May 2015

The brinkmanship at the heart of Greece’s 11th hour escape from default has been laid bare, as it was revealed Alexis Tsipras told creditors the country would not be able to fulfil its obligations to the International Monetary Fund.

Greece narrowly avoided falling into arrears with the IMF after tapping its own emergency reserve account at the Fund to make a €750m payment back to it last week.

But it has emerged that the prime minister was seemingly unaware of the cash reserves just days before the payment was due.

According to reports in Greek newspaper Kathimerini, Mr Tsipras wrote to IMF chief Christine Lagarde, European Central Bank president Mario Draghi and the European Commission’s Jean Claude-Juncker, telling them his government would default without a release of emergency funds days before payment was due on May 12.

The Greek premier also appealed to the ECB to allow his cash-starved government to issue short-term government debt and requested the return of €1.9bn in profits held by the ECB from holding Greek bonds.


Posted at 2:45 PM (CST) by & filed under

By Greg Hunter’s  (Early Sunday Release)

Dear CIGAs,

Mexican retail mogul Hugo Salinas-Price is worried about the common man and the upcoming currency calamity that is approaching the globe.  Salinas-Price says, “It certainly isn’t getting better when you have some intellectuals going so crazy as to say they want to ban cash.  We can’t go too much further along this road.  This is utter madness.  We’re not supposed to use cash anymore?  Salinas Price goes on to say, “If we have these lunatics running things, it can’t get any better.  We have people running things that have forgotten about what motivates the common man. . . . I want people to have silver because it is going to protect them.”

Why does the common man need the protection of precious metals?  Salinas-Price says, “I just read today the global debt is $200 trillion, and it’s grown from the last crisis in 2008.  Something has to happen to take care of that debt.  Either it’s going to be repudiated or it’s going to be inflated away, or it’s going to be paid with taxation. . . . We are headed over Niagara Falls.”

Salinas-Price, 83 years old and a billionaire, warns currencies can suffer huge inflation risks.  Since the mid 1970’s, Salinas-Price points out the peso exchange rate has plunged compared to the U.S. dollar.  Salinas-Price says, “From 1976 to date, from 12.50 pesos (to $1 US) we are now at 15,100 pesos (to $1 US) and going further down.  Savings can become worthless, and that’s what I tell people.  Don’t save money that is going to devalue.  This inflation that is going on that is presently debt that is like a cloud that is up there.  When it begins to liquidate, it’s going to be pouring down.  People will be rushing around trying to buy things.  The money is going to be worthless because in a liquidation, what can you buy with all this water (fiat money) that is coming down.  As long as it is up there in credit, it’s okay.  It’s up there in the cloud, but if it begins to liquidate, watch out.”

So, is Salinas-Price predicting the same huge devaluation for the U.S. dollar as what has happened to the Mexican peso?  Salinas-Price contends, “Same cause, same effect.  It is absolutely unavoidable.  That’s why I have been urging people to have silver and gold.”

Salinas-Price is trying to implement an idea involving silver coins that just might save the common man.  Salinas-Price goes on to explain, “It is a silver coin that is given a monetary value by a quote and not by stamping the number on the coin. . . . It would receive a quote from the Treasury (not a central bank).  Don’t give it to the Fed, give it to the Treasury.  Then you are saving in silver money which makes it 10 times or 100 times more attractive.  When this takes place–boom, it’s going to change the whole thing.  It’s going to shake up the world.”


Posted at 9:25 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Felix wisely adopts the GOTS method, and wins the approval of his friends.


FBI: researcher admitted to hacking plane in-flight, causing it to “climb”
Chris Roberts "overwrote code" on Thrust Management Computer, according to affidavit.
by Cyrus Farivar – May 16, 2015 3:30pm ADT

A newly-published search warrant application shows that an aviation computer security researcher told the FBI that he briefly took control of at least one commercial airliner. The warrant, which was filed in a federal court in New York state, was first published Friday by APTN, a Canadian news site.

According to the affidavit for the warrant application, the researcher, Chris Roberts, told the FBI that he:

connected to other systems on the airplane network after he exploited/gained access to, or "hacked" the [in-flight entertainment] system. He stated that he then overwrote code on the airplane’s Thrust Management Computer while aboard a flight. He stated that he successfully commanded the system he had accessed to issue the climb command. He stated that he thereby caused one of the airplane engines to climb resulting in a lateral or sideways movement of the plane during one of these flights. He also stated that he used Vortex software after compromising/exploiting or "hacking" the airplane’s networks. He used the software to monitor traffic from the cockpit system.

Roberts did not immediately respond to Ars’ request for comment, but he told Wired on Friday that this paragraph was taken out of context.

United’s move comes three days after FBI detained white hat hacker for 4 hours.

"It would appear from what I’ve seen that the federal guys took one paragraph out of a lot of discussions and a lot of meetings and notes and just chose that one as opposed to plenty of others," he said, declining to elaborate further.

As Ars previously reported, Roberts was detained and questioned by the FBI in April 2015 after he landed on a United Airlines flight from Denver, Colorado to Syracuse, New York.


Jim Sinclair’s Commentary

You think the Germans have a good memory?

Germans Buying Mass Gold
May 14, 2015

Buying gold is typically what you see when the economy is not doing very well, since gold is a standard, and it’s often a sign that people are worried about their economic future. The World Gold Council reported that Germans are actually buying gold at massive rates, with the demand for total gold bar and coins jumping 20 percent in the first quarter of 2015. For Germany, it is unusual for gold to be a hot commodity, especially right now since the economy of Germany is really strong right now. Even Europe has regained economic momentum within the last few months, which is outpacing the United States economy currently.

The gold sales are rising dramatically because the European Central Bank is going to be purchasing $1.3 trillion in bonds, which is driving inflation fears. The citizens consider this to be central bank money printing, and it is worrying people that the prices will be going up on nearly everything. There is also worries because of Greece and the never-ending crisis there, and the tensions between Russia and Ukraine also are sparking worries.

Global demand for gold bars and coins went down 10 percent during the first quarter in other parts of the world, so the enthusiasm is not being shared by people outside of Germany and the European areas. American demand for the gold bars decreased by 12 percent as the Feds are getting ready to raise the interest rates sometime between June and September. Gold has gone up 3.5 percent in 2015 to $1,225 a troy ounce. In 2011, gold was at an all-time high at $1,900, so there is definitely a calm down in America in terms of buying gold or economic worries.

There is a lot of global reckless monetary policy going on right now, which means that the demand for gold will likely increase both in America and abroad. For now though, it appears that Germans are really worried about inflation, buying up the gold to ensure they have assets for when the currency drops in value.


Posted at 9:47 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- It Is Beginning to Look a Lot Like a "New" Recession 
- Down in First-Quarter 2015, Industrial Production Just Tumbled into the Second-Quarter 
- Longest String of Monthly Production Declines and Worst Annual and Quarterly Activity Since the Collapse 
- April PPI Plunge Was Statistically-Warped Nonsense 
- Downside Revisions to 2013 and 2014 Industrial Production and GDP Suggested by Benchmark Revisions to Durable Goods Orders

"No. 719: April Production, PPI, Durable-Goods Benchmark, Consumer Update " 


UMich Consumer Sentiment Crashes As Surging Gas Prices Trump Stock Record Highs
Tyler Durden on 05/15/2015 10:06 -0400

Soaring gas prices dueled with soaring stock prices to leave University of Michigan Consumer Sentiment and it appears the former won. Printing at the weakest level since Oct 2014, UMich dropped to 88.6 (vs 95.9 expectations). This is thebiggest miss on record.. and biggest MoM drop since Dec 2012. Both current conditons and expectations plunged despite surges in inflation expectations. Higher income expectations are starting to plunge – at their lowest in 7 months – andhousehold finances are seenas the worst since July 2014. And finally, the survey’s spokspersonsays that respondents showed "concern over employment."


In case you needed to understand what drives Consumer Sentiment (or perhaps exactly who UMich is actually surveying), here is the following….


Higher gas prices crush confidence… and stocks don’t matter


So You Want To Fight The Central Banks? Then Short Treasury’s
Tyler Durden on 05/15/2015 14:09 -0400

Following the great financial crisis in which capitalism was almost wiped out due to too much debt, a funny thing happened on the path to recovery (paved with some $57 trillion in even more debt) – Quantiative Easing, that deus ex conceived by central bankers as the miracle tool that would fix the world, stopped working. And it stopped working for a very simple reason.

As central banks have scrambled to push risk assets ever higher in hopes of creating that elusive Keynesian inflationary "trickle down", they are limited in the security they can buy. In fact, most can only purchase government treasurys, which they have done en masse. This is known as QE.

According to BofA calculations, central banks now own $22 trillion in "assets" -almost entirely in the form of government debt (an amount greater than the GDP of the US and Japan combined) – which they have to buy in order to create the balance sheet liability, reserves, which primary dealers and the world’s commercial banking system use to bid up risky assets.

Furthermore, according to Citigroup, the amount of debt monetizations in 2015 will be the greatest in history: so great is the scramble to reflate that central banks around the globe (most recently the BOJ’s expanded QE and the ECB’s brand new Q€) that the money printing academics have now gone all in.


As the chart above shows, the global financial situation is so grotesque, central banks will monetize all net debt issuance around the entire world just to push everyone into the riskiest of assets: stocks.


US Farmers In "Dire Straits": JPM Warns Of Imminent Liquidity Crunch
Tyler Durden on 05/15/2015 14:35 -0400

Despite the government’s ‘advice’ to young debt-laden students, the tragedy of the American farmer continues with worryingly pessimistic views on the future of the industry. With farmland prices falling for the first time in almost 30 years, credit conditions are weakening dramatically and the Kansas City Fed warns that persistently low crop prices and high input costs reduced profit margins and increased concerns about future loan repayment capacity, and JPMorgan concludes, the industry is currently in dire straits with the potential for a liquidity crunch for farmers into 2016.

Not so long ago, US farmland – whose prices were until recently rising exponentially – was considered by many to be the next asset bubble. Then, almost overnight, the fairytale ended, and as reported in February, US farmland saw its first price drop since 1986.


Looking ahead, very few bankers expect price appreciation and more than a quarter of survey respondents expect cropland values to decline further in the next three months.

And now, The Kansas City Fed warns that Agricultural credit conditions are worsening rapidly…

Credit conditions in the Federal Reserve’s Tenth District weakened as farm income declined further in the first quarter of 2015. Persistently low crop prices and high input costs reduced profit margins and increased concerns about future loan repayment capacity. Funds were available to meet historically high loan demand, but loan repayment rates dropped considerably. Although profit margins in the livestock industry have remained stable, most bankers do not expect farm income or credit conditions to improve in the next three months.


Russia targets ‘undesirable’ foreign organisations

Russia plans to introduce new powers to prosecute foreigners whose activities are seen as "undesirable" on national security grounds.

Russian MPs have backed a bill to ban "undesirable" foreign non-governmental organisations (NGOs) or firms.

The draft leaves the definition of "undesirable" open to interpretation.

Under an existing 2012 law, foreign-funded Russian NGOs linked to politics must register as "foreign agents". The label has connotations of spying.

A party loyal to President Vladimir Putin drafted the new law. His supporters dominate both houses of parliament.

The text going through the Duma – Russia’s lower house – says it will be up to Russian prosecutors and the foreign ministry to decide if a foreign organisation or firm is "undesirable".

A foreigner declared "undesirable" could face a fine of up to 500,000 roubles (£6,343; $10,000) and up to six years in jail.

The bill passed a second reading in the Duma on Friday. It still requires a third reading, then approval by the upper house (Federation Council) and President Putin to become law. In most cases that is a formality.

The legislation comes amid frosty relations between Russia and the West, characterised by sanctions and counter-sanctions over Russia’s involvement in the Ukraine conflict.


US Industrial Production Weakens For 5th Month – Longest Streak Since Great Recession
Submitted by Tyler Durden on 05/15/2015 09:26 -0400

On the heels of the weakest print since May 2009 in March, April Industrial Production printed -0.3% (against expectations of a bounce to -0.03% from -0.64% – which was revised higher). This is the 5th monthly drop in a row – the longest streak since the Great Recession. This is the 2nd weakest YoY print, at a mere +1.93%, since Feb 2010. To add to the pain, Capacity Utlization missed expectations falling to its lowest since Jan 2014 (falling the most YoY since Dec 2009) and Manufacturing production was unchanged.

Worst streak of monthly drops since 2009…


2nd weakest YoY print since Feb 2010…


And Capacity Utilization plunged to its lowest since Jan 2014… with the biggest YoY decline since Dec 2009



Someone Is Lying: Job Optimism Plummets To Levels Unseen Since Financial Crisis
Tyler Durden on 05/15/2015 10:21 -0400

The percentage of respondents to University of Michigan’s Consumer Sentiment Survey that "think they (or their spouse) will lose their job over the next 5 years" soared to its highest since March 2009.

Either the BLS’ workers are lying, or the government’s data on jobs is ‘misleading’


According to UMich Curtin:


And worse still:


But do not worry:


Though he offered no actual reason for his expectation…

Charts: Bloomberg


Posted at 3:35 PM (CST) by & filed under In The News.



Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- In the Context of Downside Benchmark Revisions, Headline Nominal April Retail Sales Were Unchanged for the Month
- Net of Ongoing Revision Shenanigans in Monthly Seasonal-Adjustments, Nominal April Retail Sales Actually Fell by About 0.4% (-0.4%)
- No Rebound Suggested in Second-Quarter Real Retail Sales
- Slowing Annual Sales Growth Moved Deeper into Recession Territory

"No. 718: April Nominal Retail Sales, Consumer Liquidity " 

Seymour Hersh Rages: "I Am Not Backing Off Anything I Said", Slams Establishment Media
Tyler Durden on 05/14/2015 13:27 -0400

Authored by Isaac Chotiner, originally posted at,

In a blockbuster 10,000-word story for the London Review of Books this week, longtime New Yorker investigative journalist Seymour Hersh called into question the official account of the American raid that killed Osama Bin Laden, and argued that what is arguably seen as the apex of Barack Obama’s presidency is actually built on a lie.

Hersh’s piece claims that Bin Laden was being held prisoner by the Pakistani military and intelligence service (the ISI), who were using him as a means to control Taliban and al-Qaida elements, and hoping to use him as leverage in their relationship with the United States. According to Hersh, who relied largely on an anonymous intelligence source, the Obama administration found out that Pakistan had Bin Laden, and eventually convinced Pakistani military leaders to allow a raid on the compound where Bin Laden was being held. The plan, Hersh writes, was to say publicly that Bin Laden was killed not in the raid but in a drone strike. The White House, however, supposedly broke this deal because of the political value of making the details of the raid public.

Hersh’s story has been much debated over the past several days, with many calling it into question and (a comparable few) others applauding its willingness to undercut the official narrative. NBC News and the AFP have both backed up small elements of Hersh’s story, although both outlets have also called other elements of his piece into question (and NBC later backed away from its original reporting). And no news source has supported Hersh’s largest claim—that the president lied about the raid.

I spoke to Hersh by phone this week. Here is a transcript of our conversation, which has been slightly condensed and edited for clarity.

Isaac Chotiner: If the plan until the night of the raid was to use the cover story that he had not been killed in a raid but in a drone strike, then why have the raid at all?  Why not just have the Pakistanis kill him? Why risk Obama’s presidency?


Jim Sinclair’s Commentary

This is not a trifling side show. This is a serious threat to our food supply.

Survey: More than 40 percent of bee hives died in past year

WASHINGTON (AP) — More than two out of five American honeybee colonies died in the past year, and surprisingly the worst die-off was in the summer, according to a federal survey.

Since April 2014, beekeepers lost 42.1 percent of their colonies, the second highest loss rate in nine years, according to an annual survey conducted by a bee partnership that includes the U.S. Department of Agriculture.

"What we’re seeing with this bee problem is just a loud signal that there’s some bad things happening with our agro-ecosystems," said study co-author Keith Delaplane at the University of Georgia. "We just happen to notice it with the honeybee because they are so easy to count."

But it’s not quite as dire as it sounds. That’s because after a colony dies, beekeepers then split their surviving colonies, start new ones, and the numbers go back up again, said Delaplane and study co-author Dennis vanEngelsdorp of the University of Maryland.

What shocked the entomologists is that is the first time they’ve noticed bees dying more in the summer than the winter, said vanEngelsdorp said. The survey found beekeepers lost 27.4 percent of their colonies this summer. That’s up from 19.8 percent the previous summer.

Seeing massive colony losses in summer is like seeing "a higher rate of flu deaths in the summer than winter," vanEngelsdorp said. "You just don’t expect colonies to die at this rate in the summer."


The Great Silver Debate
Author : Bill Holter
Published: May 14th, 2015

Over the last weeks, a great debate has erupted regarding silver.  More to the point, Ted Butler claims JP Morgan has accumulated at least 350 million physical ounces.  Some pooh pooh this and say it is not possible while others who may believe it are scared witless because they are afraid Morgan will dump the metal and destroy the silver price.

Taking first things first and then later expanding, I believe it is possible for Morgan to have accumulated this silver.  If you look at the bleed from both COMEX and SLV inventories and add in the purported movements on the LBMA, I do believe it is possible that JPM has amassed a silver war chest.  From a “dollar” standpoint, this is only about $5 billion which wouldn’t even need to come from their equity as they have a direct pipeline to the bowels of the Fed and Treasury for credit.

To answer the question of “fear” propounding this silver will be used to destroy the market, I would first remind you that “devious” and “stupid” are two separate descriptions.  No matter what anyone believes, JP Morgan is not stupid, devious may be another matter altogether with each fine they have paid as proof.  JP Morgan has had a huge short paper position in silver for many years dating back to at least 2007 when they inherited Bear Stearns positions.  The position has been so large in fact, they could never possibly “push a button” to cover it because the metal simply never existed to cover it in a short period of time.  Any attempt to cover would have created a panic of demand and a minimum price of $100 per ounce for starters!

This leads us to one of several theories and the most obvious, JP Morgan has been amassing physical silver and is now actually a hedge against their short position as opposed to the other way around.  It makes zero sense to me that Morgan would dump a physical position because the accumulation was so difficult to acquire in the first place.  As I said above, JP Morgan is not stupid and they understand the logic of where the macroeconomics are headed.  They know the game is either inflate or die and can surely make the judgment as to whether or not they want to be net long, or short silver.  And trust me, they also know the difference between paper contracted silver and the real thing in their vaults.

It also occurred to me, what if the short position is “used” to revalue the long position?  We have seen so many times where naked contracts were “sold sloppy and sold BIG”, what if JPM decided to actually cover their short by buying “sloppy”?  They effectively could use the short position as a springboard if you will?  What would stop them from covering the short to become flat and just keep on buying sloppy in the futures pits and running every short on the planet?  They must surely know the upside pressure is there not only technically but fundamentally because of the supply being knocked off stream by below production prices?  This is an easy trade for them if truly have built a physical long, thus making their short to unwind the “sloppier the better”!  This makes more sense to me than dumping the physical long which everyone is so afraid of.


Jim Sinclair’s Commentary

They intend to fix it by making an official club of it.

Forex Guilty Pleas and the New York Fed’s Blinders
By Pam Martens and Russ Martens: May 14, 2015

According to high priced media real estate, JPMorgan Chase and Citigroup are set to plead guilty as soon as next week to criminal charges brought by the U.S. Justice Department for colluding with other banks in the trading of foreign currencies, known on Wall Street as Forex. Guilty pleas are also expected by Royal Bank of Scotland and Barclays, while UBS, which cooperated early on in the probe, may receive a different charge.

What has not garnered any media attention, however, is the unseemly role that the perpetually blindfolded regulator, the New York Fed, has played behind the scenes as two of the nation’s largest Wall Street banks head toward becoming admitted felons.

Since January of 2014, the head of Foreign Exchange Trading at JPMorgan Chase, Troy Rohrbaugh, has served as the Chair of the Foreign Exchange Committee – a group sponsored by the New York Fed, JPMorgan’s regulator. Before Rohrbaugh became the Chair, Citigroup’s Jeff Feig chaired the Committee.  (Feig left Citigroup last year to join Fortress Investment Group LLC.)

The New York Fed’s Foreign Exchange Committee looks like an antitrust train wreck in motion. Its members are the commercial banks and investment banks that compete in foreign exchange and yet they are meeting six to eight times a year to discuss the market and set “best practices” for themselves — while some are simultaneously under criminal investigation for “worst practices.”

A regular at the meetings is Simon Potter, the head of the Markets Group at the New York Fed, which also trades foreign currency and implements open market operations with the involvement of many of the same banks. Other New York Fed staffers also attend the meetings. The meetings rotate from the offices of the New York Fed to the offices of JPMorgan and other banks.

JPMorgan’s Troy Rohrbaugh was Chair of this New York Fed group throughout last year and is still currently chairing it, according to the most recent minutes availableand his LinkedIn profile, despite the ongoing criminal investigation of JPMorgan’s involvement in rigging foreign currency trading and its settlement of civil cases for Forex abuse brought against it in November of last year by the Commodity Futures Trading Commission, the Office of the Comptroller of the Currency and the U.K.’s Financial Conduct Authority.