Posted at 1:06 PM (CST) by & filed under In The News.



Ukraine Admits Its Gold Is Gone: "There Is Almost No Gold Left In The Central Bank Vault"
Submitted by Tyler Durden on 11/18/2014 11:47 -0500

Back in March, at a time when the IMF reported that Ukraine’s official gold holdings as of the end of February, so just as the State Department-facilitated coup against former president Victor Yanukovich was concluding, amounted to 42.3 tonnes or 8% of reserves…


… and notably under the previous "hated" president, Ukraine gold’s reserves had constantly increased hitting a record high just before the presidential coup…


… we reported of a strange incident that took place just after the Ukraine presidential coup, namely that according to at least one source, "in a mysterious operation under the cover of night, Ukraine’s gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US." To wit:

Tonight, around at 2:00 am, an unregistered transport plane took off took off from Boryspil airport. According to Boryspil staff, prior to the plane’s appearance, four trucks and two cargo minibuses arrived at the airport all with their license plates missing. Fifteen people in black uniforms, masks and body armor stepped out, some armed with machine guns. These people loaded the plane with more than forty heavy boxes.


Russell – Stock Market Crash, Gold & Eventual Hyperinflation

With historic events taking place around the globe, the Godfather of newsletter writers, 90-year old Richard Russell, covered everything from a stock market collapse, to gold, hyperinflation, and massive numbers of homeless people in New York.  The 60-year market veteran also included a fantastic chart to go along with his outstanding commentary.

“On the news that Japan is back in recession, the Central Bank of Japan countered the news with a massive explosion in quantitative easing. On this news, Japan’s yen semi-crashed.

The stock market in the US continues with its bullish progression, a sell signal, little downward follow-through, and then either the Dow or the Transports goes to a new high. Today, with 50 minutes to the close, the Dow is well on its way to recording a new record high.”

Russell also included this quick note from Dennis Gartman:


Regulators Call for Takata Airbag Recall to Be Extended Nationwide

Federal auto safety regulators on Tuesday called on automakers to conduct a nationwide recall of vehicles that contain driver-side airbags made by the Japanese supplier Takata.

The nationwide move urged by the National Highway Traffic Safety Administration would expand a recall that has been limited to two states and two territories associated with high humidity. If automakers do not agree to expand the recall, the agency said, it will “use the full extent of its statutory powers” to compel them to do so.

The agency said it had yet to put together a detailed list of the models or model years affected. But the expansion affects “millions” of Ford, Honda, Chrysler, Mazda and BMW cars, David J. Friedman, deputy administrator of the agency, said during a conference call with reporters.

The agency said a recent airbag failure outside the regional recall area had prompted it to take the action.

The airbags contain a propellant that can cause them to explode when they deploy, spraying shrapnel from the casing into the car’s cabin and potentially injuring the driver or passenger. It is more likely to happen if the propellant becomes moist.


Russia, China seek to form Asia-Pacific collective security system — defense minister
November 18, 15:28 UTC+3

BEIJING, November 18. /TASS/. Defense ministries of Russia and China seek to form a regional collective security system in the Asia-Pacific region, Russian Defense Minister Sergey Shoigu said on Tuesday after talks with his Chinese counterpart Colonel General Chang Wanquan in Beijing.

According to the Russian defense minister, Russia and China are concerned over US attempts to strengthen its military and political clout in the Asia-Pacific Region (APR).

“During talks with Comrade Chang Wanquan, we discussed the state and prospects of the Russian-Chinese relations in the military field, exchanged opinions on the military-political situation in general and the APR in particular,” Shoigu said.

“We also expressed concern over US attempts to strengthen its military and political clout in the APR,” he said. “We believe that the main goal of pooling our effort is to shape a collective regional security system.”

Russia, China to hold joint naval drills in Pacific, Mediterranean in 2015

Sergey Shoigu announced that Russia and China will hold joint naval drills in the Pacific and in the Mediterranean in 2015.


Posted at 12:46 PM (CST) by & filed under Jim's Mailbox.

Hello Jim,

In Thailand I can watch Chinese TV.

I want to inform you regarding the APEC meeting in China as portrayed on Chinese TV. A "news" show gives 1.5 minutes to report on the APEC meeting. About one-third of it is the BRICs sitting together, then photo ops together, all smiles and hand holding showing a happy group united, then more BRIC reports. So the APEC meeting to the Chinese is mainly about BRICs. The new, new world order, eh what?

The Chinese viewers will likely see the BRICs as the stronger future. Oh ya.


Posted at 4:13 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The latest from John Williams.

- Unexpected Production Decline Was on Top of Downside Revisions
- Annual Growth Dropped to Six-Month Low
- Implied Fourth-Quarter Production Pace Slowed Sharply
- Continued Contractions in, and Downside Revisions to, Auto Production Should Hammer Inventory and Third- and Fourth-Quarter-GDP Estimates

"No. 674: October Industrial Production"

Industrial Production Drops; Auto Manufacturing Slumps 3rd Month In A Row – Worst Run In 5 Years
Tyler Durden on 11/17/2014 09:27 -0500

Driven by a combination of Mining (-0.9% – biggest drop in a year), Utilities (-0.7% led by a 3.2% plunge in Natural Gas) and most of all motor vehicle manufacturing (-1.2%), US Industrial Production slid 0.1% in October (notably missing expectations of a 0.2% rise). This is the 3rd monthly drop in motor vehicle & parts production – the worst consecutive run since Jan 2009. It seems the government-free-credit inspired subprime auto boom that provided just enough impetus to a fragilee conomy to enable the Fed narrative of "things are better" to play out… has ended… abruptly.

Industrial Production drops, missing notably.


Worst auto production run since Jan 09



3 Billion Gallons Of Fracking Wastewater Pumped Into Clean California Aquifiers: "Errors Were Made" State Admits
Submitted by Tyler Durden on 11/17/2014 – 13:07

Dear California readers: if you drank tapwater this morning (or at any point in the past few weeks/months), you may be in luck as you no longer need to buy oil to lubricate your engine: just use your blood, and think of the cost-savings. That’s the good news. Also, the bad news, because as the California’s Department of Conservation’s Chief Deputy Director, Jason Marshall, told NBC Bay Area,California state officials allowed oil and gas companies to pump up to 3 billion gallons (call it 70 million barrels) of oil fracking-contaminated waste water into formerly clean aquifiers, aquifiers which at least on paper are supposed to be off-limits to that kind of activity, and are protected by the government’s EPA – an agency which, it appears, was richly compensated by the same oil and gas companies to look elsewhere. And the scariest words of admission one can ever hear from a government apparatchik: "In multiple different places of the permitting process an error could have been made."


ECB could buy gold to revive economy
Declining economic data may "theoretically" leave the door open for the European Central Bank to buy assets including gold and shares
By Peter Spence, Economics Correspondent
10:00AM GMT 17 Nov 2014

Gold, shares, and exchange-traded funds (ETFs) – the European Central Bank (ECB) may turn to buying any or all of these in an attempt to boost inflation in the currency bloc.

Yves Mersch, a member of the ECB’s executive board, said that the purchase of these assets was “theoretically” an option for the central bank, which earlier this year resolved to “take further unconventional measures to counteract a lengthy period of lower inflation”.

His speech, delivered in German, came as official statistics published on Friday showed inflation of just 0.4pc in the year to October.

Very low levels of inflation were characterised by Mr Mersch as “abnormally low”, as price growth remained well below the ECB’s target of close to 2pc.

The official said that while there was scope to buy such assets, the ECB is about to embark on a programme of asset-backed securities purchases.

“Every purchase of a security – or precious metal or foreign currency – naturally increases the credit risk of the buyer”, he added, noting that the ECB may lack a mandate to increase the risk of its balance sheet.


Eric Sprott: Global Gold Demand Is Overwhelming Supply
Submitted by Tyler Durden on 11/16/2014 21:23 -0500

Submitted by Adam Taggart via Peak Prosperity,

Precious metals have had an especially tough go of it over the past month. Both gold and silver are back in price territory last seen in 2010.

Eric Sprott returns to the program to discuss the facts as we know them in this market, and what’s likely to happen from here. Specifically, he explains the tremendous imbalance currently seen between global supply and demand for precious metals. In his view, prices will have to correct upwards — prodigiously — to bring the two back in alignment:

We see almost 60 tons a week being delivered on the Shanghai Gold Exchange. Well, you start annualizing 60 tons a week you’re talking 3,000 tons a year now. We saw 94 tons of gold go into India in September. We saw the Russian Central Bank buy 37 tons of gold in September. I mean I could come up with numbers that might suggest that we’ve got 400 tons a week of demand. And we only got 230 tons a week of mine supply. And I’ve only gotten to three data points. I haven’t even gone to the rest of the world.

We’ve now created a situation unfortunately in the market where between high frequency trading and algorithms and interference by the planers they can make things happen that looks like everything is OK. And it’s the "OK" part where I think we can really relate to gold not being allowed to go up. Because that’s the canary in the coal mine. If gold was above $2,000 we’d all be wondering: What the hell is going on here?  And so they haven’t allowed it to happen.

But by suppressing the price — and one of the great things about a price of $1,100/oz is that you can buy a lot of gold at $1,100 versus $1,900 — you can buy almost 50%-60% more gold than you could three years ago with the same amount of money. And you can buy 3x the silver. With the same amount of money!


Jim Sinclair’s Commentary

Another name of QE is Debt Monetization so expect DM to replace QE.

Industrial Output in U.S. Unexpectedly Fell in October
By Victoria Stilwell  Nov 17, 2014 12:23 PM ET

Factory production struggled to gain traction in October as automakers cut back for a third consecutive month, showing U.S. manufacturing was off to a slow start in the fourth quarter.

The 0.2 percent increase in output matched September’s advance after it was revised down, figures from the Federal Reserve in Washington showed today. Total industrial production unexpectedly dropped 0.1 percent, reflecting the vehicle pullback and less demand at utilities, mining companies.

A broadening in consumer spending beyond motor vehicles, where a recent dip left sales near the strongest levels in eight years, will be needed to give manufacturing an additional boost as growth slows overseas. American plants pumped out more machinery and electronics last month, a sign business investment is bolstering the economic expansion.

The outlook “remains quite favorable,” said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC in New York, who correctly forecast total output would drop. “If we do have consumers beginning to spend again and businesses starting to invest in a more meaningful manner, we should see that reflected in the industrial sector.”

U.S. stocks fluctuated, after the Standard & Poor’s 500 Index climbed to a record last week, as corporate deals helped offset the industrial production data and a report showing Japan fell into a recession last quarter. The S&P 500 fell less than 0.1 percent to 2,038.09 at 12:20 p.m.


Posted at 9:37 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The latest from John Williams’

- October RetailSales Were Near Consensus, with Minimal Revisions and A Sharply-Slowing Pace of Fourth-Quarter 2014 Growth
- Negative Surpriseson the Economy and in the Political Arena Are Among Imminent Top Threats to U.S. Dollar

"No. 673: October Retail Sales, Consumer Liquidity, Updated Hyperinflation and DollarRisks"

Russia moves away from dollar, embraces Chinese currency
UPI International Top News
Friday November 14, 2014 5:47 AM

Russian President Vladimir Putin said Friday his country was deliberately moving away from using the U.S. dollar for international trade.

He told the Russian news agency Tass, in an interview, Russian oil sold to China will be paid for in renminbi, the Chinese currency, part of a trend by Russian companies to denominate imports and exports in renminbi or rubles, and not U.S. dollars.

"We’re moving away from the diktat of the market that denominates all the commercial oil flows in U.S. dollars," Putin said.

Direct transactions between the Russian and Chinese currencies amounted to $5.2 billion in October, up from $307 million in September, the Chinese central bank’s China Foreign Exchange Trading System reported.

"Volumes are picking up as both countries aren’t against using their own currencies instead of the dollar for mutual transactions. I expect the turnover to grow," Evgeny Gavrilenkov, a currency strategist at Mosciow’s Sberbank Rossii, told the Wall Street Journal .

To further keep the value of the ruble up without using U.S. dollars, the Russian Central Bank purchased 55 metric tons of gold in the third quarter of 2014.



David Stockman On Monetary Breakdown & Skyrocketing Gold

Today David Stockman warned King World News that the global monetary breakdown is going to intensify and this will lead to a skyrocketing gold price.  KWN takes Stockman’s warnings very seriously because he is the man former President Reagan called on in 1981, during that crisis, to become Director of the Office of Management and Budget and help save the United States from collapse.  Below is what Stockman, author of the website contracorner, had to say in his powerful interview.

Eric King:  “David, you’re thoughts on the gold market as there is all of this massive money printing all over the world.  It really is unprecedented.”

Stockman:  “Yes.  It’s leading to a breakdown of the monetary system, not to the classic hyperinflation which causes a flight to gold in the initial instance….


Posted at 8:33 AM (CST) by & filed under In The News.

Islamic State leader urges attacks in Saudi Arabia: speech
BEIRUT Thu Nov 13, 2014 1:08pm EST

(Reuters) – Islamic State leader Abu Bakr al-Baghdadi called for attacks against the rulers of Saudi Arabia in a speech purported to be in his name on Thursday, saying his self-declared caliphate was expanding there and in four other Arab countries.

Baghdadi also said a U.S.-led military campaign against his group in Syria and Iraq was failing and he called for "volcanoes of jihad" the world over.

Reuters could not independently confirm the authenticity of the speech – an audio recording carried on Islamic State-run social media. The voice sounded similar to a previous speech delivered by Baghdadi in July in a mosque in the Iraqi city of Mosul in July, the last time he spoke in public.

It followed contradictory accounts out of Iraq after U.S. air strikes last Friday about whether he was wounded in a raid. The United States said on Tuesday it could not confirm whether he was killed or wounded in Iraq following a strike near the city of Falluja.

Baghdadi urged supporters in Saudi Arabia, the world’s top oil exporter, to take the fight to the rulers of the kingdom, which has joined the U.S.-led coalition in mounting air strikes against the Islamic State group in Syria.



Investors Don’t Believe Low Oil Prices Are "Unequivocally" Good For America
Submitted by Tyler Durden on 11/13/2014 11:26 -0500

While investors are told day after day that low oil prices are "unequivocally" good for America’s economy (pick your number $20, $30, $40 billion tax cut for consumers), it appears they are not buying this big lie (that appears to forget the other side of the equation of capex, jobs, and spending from the Shale Oil miracle). As oil prices push to levels where the majority of US Shale plays become non-economic on a half-cycle basis, markets are voting withtheir money and shale-based stocks are pressing to new lows (down 50-70% in the last few months).

At $75, oil prices are crushing more and more economic scenarios for Tight-Oil…


and equity investors know it…



Obama Said to Plan Moves to Shield 5 Million Immigrants

WASHINGTON — President Obama will ignore angry protests from Republicans and announce as soon as next week a broad overhaul of the nation’s immigration enforcement system that will protect up to five million undocumented immigrants from the threat of deportation and provide many of them with work permits, according to administration officials who have direct knowledge of the plan.

Asserting his authority as president to enforce the nation’s laws with discretion, Mr. Obama intends to order changes that will significantly refocus the activities of the government’s 12,000 immigration agents. One key piece of the order, officials said, will allow many parents of children who are American citizens or legal residents to obtain legal work documents and no longer worry about being discovered, separated from their families and sent away.

That part of Mr. Obama’s plan alone could affect as many as 3.3 million people who have been living in the United States illegally for at least five years, according to an analysis by the Migration Policy Institute, an immigration research organization in Washington. But the White House is also considering a stricter policy that would limit the benefits to people who have lived in the country for at least 10 years, or about 2.5 million people.

Extending protections to more undocumented immigrants who came to the United States as children, and to their parents, could affect an additional one million or more if they are included in the final plan that the president announces.

Mr. Obama’s actions will also expand opportunities for immigrants who have high-tech skills, shift extra security resources to the nation’s southern border, revamp a controversial immigration enforcement program called Secure Communities, and provide clearer guidance to the agencies that enforce immigration laws about who should be a low priority for deportation, especially those with strong family ties and no serious criminal history.


Dollar bandwagon starting to get a little crowded
Sara Eisen | @saraeisen

No question, the U.S. dollar is the trade du jour.

Investors are betting on the buck for good reason: The U.S. economy is outperforming other global economies, and the Federal Reserve is moving closer to raising interest rates. At the same time, other central banks in Europe and Japan are moving in the opposite direction, easing policy to fight both deflation and slow growth.

That divergence in central bank policies has resulted in a $46 billion bullish trade on the dollar.

In fact, hedge funds and other large speculators are betting the dollar will strengthen against all major currencies, according to the latest weekly Commodity Futures Trading Commission report on futures positions. Traders have been increasing bullish dollar positions steadily since mid-May.

The enthusiasm is shared by forecasters as well.

Scotiabank said euro forecasts against the dollar from major Wall Street firms have fallen from 1.28 in August to 1.20 in November. They’ve also been upping their predictions for the dollar against the Japanese yen, British pound, Canadian dollar and Australia’s dollar.

Camilla Sutton, chief FX Strategist at Scotiabank, pointed out that the options market is also signaling growing bullish sentiment on the dollar. So-called risk reversals, or the difference in volatility between put and call options, show increasing demand for protection for a strong dollar in recent months.


Spike in Russian military activity is about more than Ukraine

A new study details the rise in close encounters between Russian forces and the West this year. The increase coincides with the Ukraine crisis, but it would be wrong to view it only in the light of recent events.

Ten days ago the Portuguese air force scrambled to intercept Russian bombers in the international airspace along its coast. Local media said the Russian planes involved were two strategic bombers which flew near the approach path for commercial aircraft to Lisbon international airport. It was the second such incident within several days and the latest sign of a spike in Russian activity close to NATO’s borders.

NATO recently said it had launched more than 100 intercepts of Russian aircraft so far this year – three times more than in all 2013. The alliance called the rise in Russian flights an "unusual level of air activity over European airspace."

Now, the London-based European Leadership Network (ELN) has published a study listing 45 close encounters by Russian forces with the West.

Among the encounters detailed are several classified as "high risk":

- the alleged abduction of an Estonian security service operative by Russian agents from an Estonian border post on September 5


Jim Sinclair’s Commentary

Gold will be a part of the strategy of all BRICs, not just Russia and China

Putin stockpiles gold as Russia prepares for economic war
Russia’s central bank added to its reserves of bullion in the third quarter, according to the latest report from the World Gold Council
By Andrew Critchlow, Commodities editor
6:00AM GMT 13 Nov 2014

Russia has taken advantage of lower gold prices to pack the vaults of its central bank with bullion as it prepares for the possibility of a long, drawn-out economic war with the West.

The latest research from the World Gold Council reveals that the Kremlin snapped up 55 tonnes of the precious metal – far more than any other nation – in the three months to the end of September as prices began to weaken.

Vladimir Putin’s government is understood to be hoarding vast quantities of gold, having tripled stocks to around 1,150 tonnes in the last decade. These reserves could provide the Kremlin with vital firepower to try and offset the sharp declines in the rouble.

Russia’s currency has come under intense pressure since US and European sanctions and falling oil prices started to hurt the economy. Revenues from the sale of oil and gas account for about 45pc of the Russian government’s budget receipts.

The biggest buyers of gold after Russia are other countries from the Commonwealth of Independent States, led by Kazakhstan and Azerbaijan.

In total, central banks around the world bought 93 tonnes of the precious metal in the third quarter, marking it the 15th consecutive quarter of net purchases. In its report, the World Gold Council said this was down to a combination of geopolitical tensions and attempts by countries to diversify their reserves away from the US dollar.



Russia to Fly Bombers to U.S. Gulf as Ukraine Escalates
By Volodymyr Verbyany and Kateryna Choursina Nov 12, 2014 3:16 PM ET

Russia plans to extend long-range bomber patrols as far as the Gulf of Mexico and the eastern Pacific Ocean, its defense minister said, as NATO accused Vladimir Putin’s government of sending more troops into Ukraine.

With Ukraine warning its conflict is close to returning to open war, Russian Defense Minister Sergey Shoigu said his country’s military will start conducting regular long-range bomber patrols along Russia’s borders and over the Arctic Ocean. His ministry rejected an assertion from the North Atlantic Treaty Organization’s top general that it was moving combat troops and heavy weapons into Ukraine’s rebel-held east.

“In this situation, we have to maintain a military presence in the western part of the Atlantic and the eastern part of the Arctic Ocean, in the Caribbean and in the Gulf of Mexico,” Shoigu said, according to a statement on the Russian Defense Ministry website.

Standoff in Ukraine

Pressure has been growing between Russia and the U.S. and the European Union as Ukraine and pro-Russian rebels in its eastern regions accuse each other of gearing up for a renewed military push that risks adding to the death toll of more than 4,000. The UN Security Council is scheduled to hold an emergency session in New York today over the conflict.


Posted at 8:29 AM (CST) by & filed under Jim's Mailbox.

Dear Mr. Sinclair,

I see many very hard attacks on you personally in recent weeks. I believe that is connected to gold price and miners price decline and especially to your correct observations on the gold price.

I want to say that in 2000 nobody was brave enough and wise to say that price will go to USD 1600 – except you!

I hold my holdings that were rescued from UBS "captivity"(custody) and certificated and delivered in form of mining shares certificates. I believe that time will come that this will have some value, as precious metals have to rise – as everything has gone even worse in recent years.

I would be grateful to you for some remarks on miners, as I live here in Europe and cannot come to your meetings.

Thank you again and all the best,

Dear A,

The miners that will lead the field on the recovery are those with relative low cost production, good resources and a cash reserve.




Einstein had a wonderful quote:

"Insanity: doing the same thing over and over again and expecting different results."

Perhaps the world’s Central Banks should take heed.

Japan had massive QE for decades – didn’t work.
USA had massive QE for a decade – didn’t work.

Now Europe is contemplating massive QE. Think it’ll work? Think again.

Either they are insane, according to Einstein, or there is an ulterior motive, using economic weakness as a cover.

The latter is my guess. Saving the crap shooters in the world’s financial casinos, namely the big insurance companies, big banks, and large hedge funds. This has nothing to do with creating economic prosperity.

CIGA Wolfgang

ECB putting eurozone economy at risk, German expert group says
12.11.14 @ 19:16

BRUSSELS – The European Central Bank’s (ECB) plans to pump more cheap credit into banks risk undermining the long-term health of the eurozone, according to Germany’s leading economic expert group.

The ECB’s "extensive quantitative easing measures" posed "risks for long-term economic growth in the euro area, not least by dampening the member states’ willingness to implement reforms and consolidate their public finances", the German Council of Economic Experts (GCEE) said in its annual report, published on Wednesday (12 November).

The report added that the ECB "should avoid massively expanding its balance sheet as long as it does not forecast deflation in the euro area."

The report is the latest German warning shot to be aimed in the direction of Mario Draghi’s ECB, which has started to pump more money into the economy in a bid to stimulate greater financial activity.


Posted at 2:31 PM (CST) by & filed under Jim's Mailbox.


This country is economically doomed for the coming years and without Russia they are finished. Maybe the EU starts to get a feeling in what kind of a mess they have run into.

CIGA Richard V

Ukrainian government accused of fraud with coal purchase in South Africa
November 11, 21:42 UTC+3 
KIEV, November 11. /TASS/. Ukraine’s Opposition Bloc party led by former deputy prime minister in charges of the energy sector Yuri Boiko has accused the government of fraud in coal purchases from South Africa.

“The cabinet of ministers has been caught red-handed in a new fraud with coal purchases from South Africa at a price thrice as high as the market prices. Ukrainian heat stations will have to pay $110 per a ton of coal,” the party said in a statement made public on Tuesday. “The price is really fantastic – thrice as high as the market price and twice as high as the price for Ukrainian coal! Today, Ukrainian coal is sold in Ukraine-controlled Krasnoarmeisk at a price of $54 per ton, while Russia’s coal mined in Kuzbass is priced at $30-35 per ton. This sum plus railway tariffs to transport this coal to Ukraine will give $50 at the most. Poland’s coal is priced under $70.” Thus, the opposition party claims, Ukraine’s losses from the purchase of one million tons of such coal would amount roughly to one billion hryvnias (more than $60 million).

The Opposition Bloc said it was a real shame for Ukraine, which used to produce more than 83 million tons of coal a year, to buy it abroad.

Ukraine buys South African coal at a price of $86 per ton, taking into account transportation costs to a Ukrainian port. The final price after transportation to a heat station goes up to $110-112. As much as 80% of coal purchases are financed by Britain’s Steel Mont. Three ships loaded with coal have already reached Ukraine, another three are expected later, but the price may be changed.


Ukraine can purchase Russian coal — Ukrainian official
November 11, 21:13 UTC+3

KIEV, November 11. /TASS/. Ukraine can purchase Russian coal to ensure the work of Ukrainian thermal power stations, Ukrinterenergo director Vladimir Zinevich said on Tuesday.

However, he said the decision would depend on the new Ukrainian government’s policy.

“Let’s wait for forming the coalition, the new government and the new energy strategy in order to understand if there is the direction towards diversification or not,” Zinevich said.

Ukraine can buy the necessary amount of Russian coal. But it does not do it for political motives, he said.

“I answer – yes, we can. We can buy all in Russia. If we need a diversified source, this is the political question,” Zinevich said.

Commenting on the essence of the authorities’ claims to Ukrinterenergo due to the deal on South African coal supplies to Ukraine, he said Kiev could not do this on its own, without a trader, because “first of all, it is not real to receive 80% financial support on the market today”.

“A loan of at least $38 million was taken to organize the purchases,” Zinevich said.

Coal supplied to Ukraine from South Africa costs $86 per ton. The final price of coal after its delivery to a thermal power plant reaches $110-$112. Steel Mont Trading provides 80% financial support. Three vessels of coal have arrived and as many vessels are expected to make the harbour. However, the price can change.


Posted at 2:18 PM (CST) by & filed under In The News.


"A Clear Attempt To Manipulate Fixes In The Precious Metal Market"
Submitted by Tyler Durden on 11/12/2014 08:59 -0500

Just in case there is still any confusion, here is Reuters to clear things up.

Swiss regulator FINMA said on Wednesday that it found a "clear attempt" to manipulate precious metals benchmarks during its investigation into precious metals and foreign exchange trading at UBS.

"The behaviour patterns in precious metals were somewhat similar to the behaviour patterns in foreign exchange," FINMA director Mark Branson said in a conference call with journalists.

He said that as UBS has precious metals and foreign exchange desks under combined leadership, it was not surprising to find similar behaviour.

"But we have also seen a clear attempt to manipulate fixes in the precious metal market."

Luckily, it was only at UBS. As for Andre Flotron, who is "keen to return in due time"… don’t hold your breath.


Caught Rigging FX and Gold? Your Punishment Will Be A Bonus Capped At Just 200% Of Your Base Salary
Tyler Durden on 11/12/2014 08:26 -0500

Here are some more details on today’s headline news: the banks’ wholesale settlement to put FX-rigging in the rearview mirror. First example: if you ever saw your stops taken out from beneath your feet, thank your broker, JPM, which acted against its own clients to crush their stops.

From the FCA’s JPM notice:

JPMorgan’s failings in this regard allowed the following behaviours to occur in its G10 spot FX trading business:

1.  Attempts to manipulate the WMR and the ECB fix rates, alone or in collusion with traders at other firms, for JPMorgan’s own benefit and to the potential detriment of certain of its clients and/or other market participants;

2.  Attempts to trigger clients’ stop loss orders for JPMorgan’s own benefit and to the potential detriment of those clients and/or other market participants; and

3.  Inappropriate sharing of confidential information with traders at other firms, including specific client identities and, as part of (1) and (2) above, information about clients’ orders.

From Reuters:

Dozens of dealers have been suspended or fired for sharing confidential information about client orders and coordinating trades to make money from a foreign exchange benchmark used by asset managers and corporate treasurers to value their holdings in the latest scandal to hit the financial industry.


Jim Sinclair’s Commentary

It will be interesting to see if their fiddling with gold and silver just goes away.

Foreign exchange fines: banks handed £2bn in penalties for market rigging
Regulators in US and UK mete out record fines after finding a ‘free for all culture’ on currency trading floors at RBS, HSBC, Citibank, JP Morgan and UBS
Jill Treanor
Wednesday 12 November 2014 04.18 EST

The corruption of the world’s biggest currency dealers was laid bare on Wednesday when regulators imposed £2bn of fines on five major banks for rigging the £3.5tn-a-day foreign exchange markets.

Regulators said they had found a “free for all culture” rife on their trading floors which allowed the markets to be rigged for five years, from January 2008 to October 2013.

The much-anticipated record settlement with US and UK regulators did not include Barclays, which remains in discussions with other regulators.

Each of the fines imposed on Royal Bank of Scotland, HSBC, Citibank, JP Morgan and UBS were records for the UK’s Financial Conduct Authority (FCA), smashing the penalties imposed over the last two years for Libor rigging.

The government welcomed the action. The chancellor, George Osborne, said: “Today we take tough action to clean up corruption by a few so that we have a financial system that works for everyone. It’s part of a long-term plan that is fixing what went wrong in Britain’s banks and our economy.”


UBS Precious Metals Misconduct Found by Finma in FX Probe
By Nicholas Larkin and Elena Logutenkova  Nov 12, 2014 6:24 AM ET 

Switzerland’s regulator found “serious misconduct” by UBS AG (UBSN) employees in precious metals trading, particularly with silver, as part of its review of the bank’s foreign-exchange business.

Electronic chats played a “key” role in the improper conduct in foreign exchange and precious metals trading, the Swiss Financial Market Supervisory Authority, or Finma, said in a statement today. It found front running, when traders profit from advance knowledge about a transaction expected to influence prices, over client orders for silver.

The Swiss regulator and those in the U.S. and U.K. ordered UBS and four other banks to pay about $3.3 billion to settle a probe into the rigging of foreign-exchange rates. Precious metals fixings, price-setting rituals dating back a century for gold and silver, were overhauled this year as scrutiny increased on how market benchmarks are set. Barclays Plc was fined in May after a trader sought to influence the gold fix in 2012.

“The behavior patterns in precious metals were somewhat similar to the behavior patterns in foreign exchange,” Mark Branson, Finma’s chief executive officer, said today on a conference call. “We have also seen clear attempts to manipulate fixes in the precious metals markets.”

UBS’s precious metals spot-trading desk has been part of the foreign-exchange desk since 2008 and was subject to the same control and monitoring procedures, according to Finma. Traders engaged in activities including sharing of information on orders, flows and customers as well as front-running and triggering of stop-loss orders, it said.


November 11, 2014
Santiago, Chile

This past week Brazil announced that it will be building a 3,500-mile fiber-optic cable to Portugal in order to avoid the grip of the NSA.

What’s more, they announced that not a penny of the $185 million expected to be spent on the project will go to American firms, simply because they don’t want to take any chances that the US government will tap the system.

It’s incredible how far now individuals, corporations, and even governments are willing to go to protect themselves from the government of the Land of the Free.

The German government, especially upset by the discovery of US spying within its borders, has come up with a range of unique methods to block out prying ears.

They have even gone so far as to play classical music loudly over official meetings so as to obfuscate the conversation for any outside listeners.

They’ve also seriously contemplated the idea of returning back to typewriters to eliminate the possibilities of computer surveillance.

More practically, the government of Brazil has banned the use of Microsoft technologies in all government offices, something that was also done in China earlier this year.

The Red, White, and Blue Scare has now replaced the Red Scare of the Cold War era. And it comes at serious cost.

From Brazil’s rejection of American IT products alone, it is estimated that American firms will lose out on over $35 billion in revenue over the next two years.

Thus, as the foundation of the country’s moral high-ground begins to falter, so does its economic strength.

The irony should not be lost on anyone; on a day when Americans celebrate their veterans’ courage in fighting against the forces of tyranny in the world, we find yet another example of where the rest of the world sees the source of tyranny today.

It’s amazing how much things have changed.

In the past, the world trusted America with so much responsibility.

The US dollar was the world’s reserve currency. The US banking system formed the foundation of the global banking system. US technology became the backbone of the global Internet.

But the US government has been abusing this trust for decades.

Today the rest of the world realizes they no longer need to rely on the US as they once did.

And in light of so much abuse and mistrust, they’re eagerly creating their own solutions.

Just imagine—if Brazil is building its own fiber optic cable to avoid the NSA, it stands to reason that they would create their own alternatives in the financial system to directly compete with the IMF and the US dollar.

Oh wait, they’re already doing that too. Fool me twice, shame on me.

Until tomorrow,
Simon Black

QE isn’t dying, it’s morphing
Monday, November 10, 2014 at 4:05PM

A funny thing happened on the way to the ‘end’ of the multi-trillion dollar bond buying program known as QE – the Fed chronicles. Aside from the shift to a globalization of QE via the European Central Bank (ECB) and Bank of Japan (BOJ) as I wrote about earlier,what lingers in the air of “post-taper” time is an absence of absence. For QE is not over. Instead, in the United States, the process has simply morphed from being predominantly executed by the Federal Reserve (Fed) to being executed by its major private bank members. Fed Chair, Janet Yellen, has failed to point this out in any of her speeches about the labor force, inflation, or inequality.

The financial system has failed and remains a threat to us all. Only cheap money and the artificial inflation of asset values can make it appear temporarily healthy. Yet, the Fed (and the Obama Administration) continue to perpetuate the illusion that making the cost of (printed) money zero by any means has had a positive effect on the population at large, when in fact, all that has occurred is a pass-the-debt-ponzi-scheme co-engineered by the Fed and big US bank beneficiaries. That debt, caught in the crossfires of this central-private bank arrangement, is still doing nothing for American citizens or the broader national or global economy.

The Fed is already the largest hedge fund in the world, with a book of $4.5 trillion of assets. These will plummet in value if rates rise.  Cue the banks that are gearing up their own (still small in comparison, but give them time) role in this big bamboozle. By doing so, they too are amassing additional risk with respect to interest rates rising, on top of all their other risk that counts on leveraging cheap money.

Only the naïve could possibly believe that the Fed and its key banks haven’t been in regular communication about this US Treasury security shell game.  Yet, aside from a few politicians, such as former Congressman Ron Paul, Congressman Sherrod Brown and Senators Bernie Sanders and Elizabeth Warren, the notion that Fed policy has helped bankers, rather than other people, remains largely divorced from bi-partisan political discussion.