Posted at 4:01 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

This is absolutely Jack Russells. We have 3 of them.

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US arms rushed to Iraqi Kurds from Jordan, Israel. Al Qaeda-Sinai targets US Negev military facilities

The Kurdish Peshmerga fight against encroaching Islamic State troops gained a broad new dimension Monday, Aug. 11, when the US began airlifting large quantities of military equipment, including ordnance, from Jordan and Israel to the semiautonomous KRG capital, Irbil.  The US maintains 10,000 special operations and marine forces at the King Hussein Air Base in northern Jordan, with large stocks of ammunition that were originally destined for the rebels fighting Bashar Assad in Syria. They are now being redirected to the Kurdish effort to stop the rapid Islamist march on their republic, along with supplies from the US emergency stores maintained in the Israeli Negev.
DEBKAfile’s military sources reveal that for some weeks, those stores and other US facilities in southern Israel have been in the sights of IS elements, which arrived in Sinai six months ago to reinforce Ansar Beit Al-Maqdis, the local offshoot of Al Qaeda.

The US, Israel and Egypt have taken care to keep this development under their hats. But in the last month, while Israel was engaged in Operation Defensive Edge against the Palestinian Hamas, IS and Al-Maqdis shot rockts from Sinai at US and Israeli military facilities in the Negev, in support of Hamas. Their attacks were described by Western observers as intense on some days as the Palestinian rocket barrage against the Israeli population.

The speed with which the American military effort in northern Iraq has spiraled in four days – from limited air strikes on IS targets Friday, Aug. 8, to direct arms supplies Monday – will soon confront President Barack Obama with the need for a speedy decision on whether to send American troops back to Iraq.

US air strikes are clearly limited by the lack of an organized list of targets. All they can do now is bomb chance targets as they are picked up by reconnaissance planes or satellites. To be effective, the US Air Force needs to be guided in to target by special operations forces on the ground, who can supply precise data on the movements of IS fighters and mark them for air attack with laser designators.

Another shortcoming is the small number of US fighter-bombers available for Iraq. The aircraft which conducted four attacks on IS forces came from the USS George HW Bush aircraft carrier in the Gulf, which has 70 warplanes on board. This is not enough aerial firepower to stop the Islamists’ advance.

They are also disadvantaged by being prevented from striking IS forces in Syria, a limitation which further curtails their effectiveness, as it did in the US war against Saddam Hussein.

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Jobs Added Post-Recession in US Pay 23 Percent Less, Report Says
Monday, 11 Aug 2014 11:14 AM

Jobs gained following the U.S. recession pay 23 percent less than those lost as a result of the 18-month slump that ended in June 2009, a report by the U.S. Conference of Mayors finds.

The average wage of the positions recovered through the second quarter of 2014 was $47,171 per year compared with $61,637 for those lost in 2008 through 2009, according to the report.

The loss is almost twice as large as the one following the 2001 recession, according to the study prepared by IHS Global Insight, and represents $93 billion in foregone wages.

“While the economy is picking up steam, income inequality and wage gaps are an alarming trend that must be addressed,” Kevin Johnson, mayor of Sacramento, California, and president of the group, said in the report released Monday.

Earnings disparities are also worsening, the report showed. Average income is projected to rise faster than median income, suggesting that top earners are gaining a disproportionate share and pulling up the mean.

In 2014, median income is projected to gain 2.5 percent before adjusting for inflation, followed by 3.8 percent gains per year through 2017.

Average income is expected to climb 2.7 percent this year and by 4.1 percent annually through 2017.

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US SANCTIONS ON RUSSIA MAY SINK THE DOLLAR
The US government’s decision to apply more sanctions on Russia is a grave mistake

by RON PAUL | INFOWARS | AUGUST 11, 2014

The US government’s decision to apply more sanctions on Russia is a grave mistake and will only escalate an already tense situation, ultimately harming the US economy itself. While the effect of sanctions on the dollar may not be appreciated in the short term, in the long run these sanctions are just another step toward the dollar’s eventual demise as the world’s reserve currency.

Not only is the US sanctioning Russian banks and companies, but it also is trying to strong-arm European banks into enacting harsh sanctions against Russia as well. Given the amount of business that European banks do with Russia, European sanctions could hurt Europe at least as much as Russia. At the same time the US expects cooperation from European banks, it is also prosecuting those same banks and fining them billions of dollars for violating existing US sanctions. It is not difficult to imagine that European banks will increasingly become fed up with having to act as the US government’s unpaid policemen, while having to pay billions of dollars in fines every time they engage in business that Washington doesn’t like.

European banks are already cutting ties with American citizens and businesses due to the stringent compliance required by recently-passed laws such as FATCA (Foreign Account Tax Compliance Act). In the IRS’s quest to suck in as much tax dollars as possible from around the world, the agency has made Americans into the pariahs of the international financial system. As the burdens the US government places on European banks grow heavier, it should be expected that more and more European banks will reduce their exposure to the United States and to the dollar, eventually leaving the US isolated. Attempting to isolate Russia, the US actually isolates itself.

Another effect of sanctions is that Russia will grow closer to its BRICS (Brazil/Russia/India/China/South Africa) allies. These countries count over 40 percent of the world’s population, have a combined economic output almost equal to the US and EU, and have significant natural resources at their disposal. Russia is one of the world’s largest oil producers and supplies Europe with a large percent of its natural gas. Brazil has the second-largest industrial sector in the Americas and is the world’s largest exporter of ethanol. China is rich in mineral resources and is the world’s largest food producer. Already Russia and China are signing agreements to conduct their bilateral trade with their own national currencies rather than with the dollar, a trend which, if it spreads, will continue to erode the dollar’s position in international trade. Perhaps more importantly, China, Russia, and South Africa together produce nearly 40 percent of the world’s gold, which could play a role if the BRICS countries decide to establish a gold-backed currency to challenge the dollar.

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Putin: Russia teams up with Red Cross to send humanitarian convoy to Ukraine
August 11, 19:19 UTC+4 
MOSCOW, August 11. /ITAR-TASS/. Russia in cooperation with the International Committee of the Red Cross (ICRC) will send a humanitarian convoy to Ukraine, President Vladimir Putin said in a telephone conversation with European Commission President Jose Manuel Barroso on Monday.

Putin shared his assessment of the crisis in Ukraine and its causes, placing the emphasis on “the catastrophic consequences of the military operation the Kiev authorities are conducting in south-eastern regions and on the need for urgent humanitarian aid to the region”, the presidential press service said.

President Vladimir Putin and European Commission President Jose Manuel Barroso in a telephone conversation on Monday discussed some pressing issues of cooperation between Russia and the European Union.

The call took place “in the context of the Association Agreement signed by Ukraine and Russia’s ban on the import of agricultural products from EU countries in response to the Western sanctions”, the press service said.

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Jim Sinclair’s Commentary

Sanctions bring China and Russia closer in trade relations.

China to start direct sales of fruit and vegetables to Russia
Published time: August 11, 2014 09:34

China will start selling fruit and vegetables directly to Russia, and Baorong company plans to set up a special logistics center in Dongning on the border with Russia’s Far East to do it.

The 70,000 square meter wholesale market and 30,000 square meter warehouse, fitted out with refrigerators and other equipment, will be in a special cross-border customs zone, ITAR-TASS cites the head of the Association of Applied Economy of the Heilongjiang Province Zhang Chunjiao.

“Direct export of fruit and vegetables to Russia will be organized from it," she said.

It will cost $9.7 million to construct. Customs clearance times will be reduced, and there will be no need to double-check the cargo because of video surveillance in the warehouse.

A Chinese company Dili, also intends to create a similar cross-border trade zone by the end of 2014, Zhang Chunjiao added.

The announcement comes after Russia introduced a 1-year ban on imports of some agricultural products from the EU, US, Australia, Canada, Australia and Norway last week. If it lasts, it could cost European Union members $16 billion, Vygaudas Usackas, the EU ambassador to Russia, estimated.

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WHO Warns "No End In Sight" As 170 Ebola Healthcare Workers Now Infected
Submitted by Tyler Durden on 08/11/2014 13:35 -0400

"The outbreak of Ebola virus disease in west Africa continues to evolve in alarming ways, with no immediate end in sight," is the ominous warning this morning from the World Health Organization. The WHO statement confirmed that a stunning 170 health-care workers (the ones covered from head to toe in protective garments) have been infected with Ebola and at least 81 have died. "Treatment facilities are oveflowing," they note as they prepare to hold an emergency meeting today on experimental therapies. But apart from that, as Western media says, it is contained and does not pose a risk to Americans…

Excerpted from WHO Statement:

The outbreak of Ebola virus disease in west Africa continues to evolve in alarming ways, with no immediate end in sight. Many barriers stand in the way of rapid containment.

The most severely affected countries, Guinea, Liberia, and Sierra Leone, have only recently returned to political stability following years of civil war and conflict, which left health systems largely destroyed or severely disabled.

The recent surge in the number of cases has stretched all capacities to the breaking point. Supplies of personal protective equipment and disinfectants are inadequate. The outbreak continues to outstrip diagnostic capacity, delaying the confirmation or exclusion of cases and impeding contact tracing.

Some treatment facilities are overflowing; all beds are occupied and patients are being turned away.

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Jim Sinclair’s Commentary

The cost of sanctions to Europe is starting to take hold.

Escalating tensions with Russia threaten eurozone recovery — Financial Times
August 11, 15:42 UTC+4

LONDON, August 11. /ITAR-TASS/. Strained relations with Russia over conflict in Ukraine “have hit confidence in Germany”, complicating economic recovery in the eurozone, the UK’s Financial Times newspaper said on Monday, quoting economists polled by Reuters news agency.

European Central Bank president Mario Draghi was cited as saying that further breakdown of relations with Russia “would weaken growth in the second half of the year”.

The region’s recovery already looked fragile with Italy, the eurozone’s third-largest economy, back in recession and the French economy remaining weak, the paper said.

“There are also signs momentum in the German economy, which provides more than a quarter of the currency area’s output, has halted,” it said, reporting polled economists as saying that the region’s economic powerhouse failed to grow at all in the second quarter.

Ukraine’s crisis triggered a sharp slump in factory orders in June, as well as a decline in business confidence, the paper said.

Joerg Kraemer, chief economist at Commerzbank, was quoted as saying, “It’s not the end of the upswing, but it’s a reminder that there are certain risks from emerging markets.” “Germany is highly export driven. It can’t be immune from what is going on outside,” Kraemer concluded.

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Russia Urges West Not to Interfere With Humanitarian Aid to East Ukraine

SOCHI, August 11 (RIA Novosti) – Russian Foreign Minister Sergei Lavrov Monday called on the West not to impede the delivery of urgent humanitarian aid to war-torn eastern Ukraine.

"Hopefully, this humanitarian action will take place soon under the aegis of the International Committee of the Red Cross,” Lavrov told reporters in the Black Sea resort of Sochi.

“We have agreed all the details with the Ukrainian authorities. I hope that our Western partners will avoid putting obstacles [to the delivery of humanitarian aid],” Lavrov said.

The minister sharply criticized recent statements by officials in London, Washington and Berlin that eastern Ukraine does not require humanitarian assistance despite the worsening situation in the regions caught in armed clashes between Kiev-led forces and independence supporters.

“If it is true that the three leaders agreed in phone contacts that there is no need for humanitarian aid to east Ukraine as all necessary measures are already being taken – it sounds like the epitome of blatant cynicism,” Lavrov said.

Earlier Monday, Russian presidential spokesman Dmitry Peskov said that humanitarian aid to the war-torn southeastern Ukraine will be rendered immediately after all conditions are settled.

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Finnish Foreign Ministry Backs Russia’s Plan on Humanitarian Aid to Ukraine

MOSCOW, August 11 (RIA Novosti) – Finland’s Foreign Minister Erkki Tuomioja is in constant contact with his colleagues from the United Nations (UN) and the Organization for Security and Co-operation in Europe (OSCE) in order to fulfil Russia’s plan to deliver humanitarian aid to Ukraine, Finland’s Yle television channel reported Monday.

“The situation in eastern Ukraine has not yet reached the scale of the [humanitarian] catastrophe in Gaza or Iran but still it is very serious,” Tuomioja said in an interview.

The minister said Russia’s proposals should be considered, but noted that any kind of humanitarian aid should be delivered in cooperation with the Ukrainian government.

Last Tuesday at the UN Security Council, Russia offered to deploy an international humanitarian mission, with Russian humanitarian aid under the auspices of the International Committee of the Red Cross to Ukraine’s troubled eastern regions.

Soon afterward, Kiev said it would manage on its own and denied there was a humanitarian crisis in the country. Late Friday, the International Committee of the Red Cross welcomed Russia’s proposal.

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Posted at 11:25 PM (CST) by & filed under Jim's Mailbox.

Jim,

It’s just like a bad penny. It keeps coming back to hurt the banksters and the central planners. Their job of cover up and concealment is never done.

CIGA Larry

The ECB’s next problem: saving Italy
Fathom Consulting reckons that without a European Central Bank rescue, in the form of large-scale quantitative easing, a full-blown run on Italian debt is inevitable.
Phillip Inman, economics correspondent
theguardian.com, Thursday 7 August 2014 03.08 EDT

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Since Matteo Renzi grabbed the Italian premiership in February, Rome has fallen off the radar of most crisis watchers. Renzi’s promise to institute sweeping reforms to business and labour markets appeared to be more than hot air following the appointment of Pier Carol Padoan as finance minister.

The heavy-hitting former chief economist of the Organisation of Economic Co-operation and Development (OECD) appeared to give the youthful Renzi the intellectual ballast and political clout needed to push through an ambitious agenda.

This narrative was allied to figures showing Italy was already close to achieving a balanced budget and its banks were in better shape than many of France’s famous names.

Maybe it is too soon to judge, but figures showing the country has fallen back into recession will dent the new government’s plans along with its image.

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Jim Sinclair’s Commentary

Here is your major Black Swan in the making.

China foreign ministry defends lighthouse on disputed islands

State media reported on Thursday that China was planning to build lighthouses on five islands in the South China Sea, known in English as North Reef, Antelope Reef, Drummond Island, South Sand and Pyramid Rock, including two that appear to be in waters also claimed by Vietnam.

Spokeswoman Hua Chunying said in a statement posted on the foreign ministry website late on Friday that the lighthouses were "necessary measures to guarantee the safety of vessel traffic" and was both in the public interest and compliant with international law.

The U.S. and the Philippines have called for a voluntary freeze on any status-quo changing moves by disputants in the area, but China has rejected the proposal.

Washington is also attempting to use this weekend’s ASEAN regional forum in Myanmar to lobby Southeast Asian foreign ministers to pressure China to come to the negotiating table.

China claims 90 percent of the South China Sea and has begun to aggressively enforce its territorial claims.

In May, China moved an oil rig into water disputed by Vietnam backed up by a flotilla of warships and fishing boats, which resulted in a Vietnamese fishing vessel being sunk and anti-Chinese riots in Vietnam.

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Jim Sinclair’s Commentary

Japan warns China over war.

Tokyo warns that Beijing’s provocations can start a war
08/05/2014

Tokyo (AsiaNews) – China’s "dangerous" attitude and its attempts to undermine international law in the East China Sea " may cause unintended consequences" in the region, this according to Japan’s white paper on defence.

The study also warns that an unpredictable North Korea "repeatedly uses militarily provocative words and actions".

The 505-pages paper points the finger at Beijing’s exponential increase in military spending, noting that Tokyo is doing the same for the first time in 12 years.

For Japan the latest in a series of hostile acts was the Air Defense Identification Zone (ADIZ), that China  unilaterally declared at the end of 2013.

The move to set up this zone, which effectively places a larger area under Chinese control, has been criticized by Washington as well.

For several analysts, it is precisely in this area that the Asian powers could come to blows.

"Japan is deeply concerned about the establishment of ‘the East China Sea ADIZ, which is a profoundly dangerous act that … [may] escalate the situation and may cause unintended consequences" in the region, the white paper said.

Indeed, such fears do not seem exaggerated. In June 2014, two Chinese warplanes flew less than 30 metres from Japanese jets in the zone where the air defences of the two countries overlap.

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Jim Sinclair’s Commentary

Here is diplomatic strategy for handling the possible Ultimate Black Swan

‘You’re late!’ Chinese Foreign Minister Wang Yi irked as John Kerry keeps him waiting before bilateral talks
Meeting during Asean event dealt largely with South China Sea tensions
PUBLISHED : Saturday, 09 August, 2014, 10:41pm
UPDATED : Sunday, 10 August, 2014, 6:28pm

US Secretary of State John Kerry was ticked off by his Chinese counterpart on Saturday after he arrived late for talks between the superpowers as Washington attempts to cool regional maritime tensions.

Chinese Foreign Minister Wang Yi pointedly remarked that he had been waiting “for more than half an hour” in comments through an interpreter after Kerry arrived late for a meeting between the two countries.

Kerry, chuckling sheepishly, apologised for keeping Beijing’s top diplomat waiting.

“I am very, very sorry,” he said ahead of the meeting on the sidelines of talks between the Association of Southeast Asian Nations (Asean) and regional and global powers.

The US has urged an end to all acts that may worsen already strained relations between China and regional rival claimants over parts of the South China Sea.

Wang on Saturday said China was not the aggressor in the disputed waters, but vowed Beijing would have “clear and firm reactions” to defend its interests in the sea.

China earlier in the day vowed “clear and firm reactions” to defend its interests in the South China Sea but rejected suggestions of aggression, as America’s top diplomat urged restraint from all claimants to the bitterly contested waters.

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Jim Sinclair’s Commentary

This could easily be the ultimate Black Swan.

Beijing warns all outside Asean against involvement in South China Sea disputes
Asean states’ interests and those of China, not those of US or other outsiders, called paramount
PUBLISHED : Sunday, 10 August, 2014, 5:53am

UPDATED : Sunday, 10 August, 2014, 12:02pm

China warned yesterday that only Asean’s declaration of conduct was relevant to how nations interacted in the South China Sea and any competing proposal would harm the interests of Beijing and the regional bloc.

The message was delivered by Foreign Minister Wang Yi after a US proposal to suspend provocative acts in the disputed waters received a cool response from participants at the Asean Regional Forum (ARF).

"Someone has been exaggerating or even playing up the so-called tension in the South China Sea," Wang said at a ministerial press conference in Naypyidaw yesterday. "We do not agree with such a practice, and we call for vigilance in the motives behind them. Any proposal to come up with an alternative would only disrupt discussion of the code of conduct."

Foreign ministers from the 10-member Association of Southeast Asian Nations are meeting in Naypyidaw along with top envoys from China, Russia, Japan, India, Australia, the European Union and the US for the ARF.

"We need to work together to manage tensions in the South China Sea and manage them peacefully and also to manage them on a basis of international law," US Secretary of State John Kerry said.

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Jim Sinclair’s Commentary

This war simply will not stop and cannot be run away from in its implications.

Obama warns of long campaign as Iraq strikes continue against Isis
US president admits there is no quick fix as minorities flee Islamist onslaught and British planes join relief effort
Martin Chulov in Irbil, Mark Townsend in London, Jon Swaine in New York and agencies
The Observer, Saturday 9 August 2014

Barack Obama has committed the US to long-term involvement in Iraq, warning that the rapidly evolving crisis in the north would not be solved quickly.

US aircraft have targeted armoured vehicles and militant positions in a second day of strikes against Islamic State forces. A mix of US fighters and drones attacked and destroyed armoured personnel carriers after Yazidi civilians near Sinjar came under attack from the vehicles, US central command said.

US forces "successfully [conducted] four air strikes to defend Yazidi civilians being indiscriminately attacked" near Sinjar, said a statement from the United States Central Command (Centcom), which covers the Middle East.

In the first strike "a mix of US fighters and remotely piloted aircraft struck one of two Isil armoured personnel carriers firing on Yazidi civilians near Sinjar", the statement said. After following the remaining vehicle a second pair of strikes, around 20 minutes later, hit two more armoured personnel carriers and an armed truck.

A fourth struck another armoured personnel carrier, also in the Sinjar area.

Alongside this, the US-led air campaign to deliver relief to civilians fleeing Isis continued with a third drop of supplies taking place on Saturday night. The US military said the latest air drop involved planes from multiple air bases and included one C-17 and two C-130 cargo planes supported by fighter planes. The aircraft delivered 72 bundles of supplies, including more than 3,800 gallons of water and more than 16,000 packaged meals.

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Jim Sinclair’s Commentary

How could a situation get worse? This is biblical!

Islamic State extremists deliver ultimatum to trapped Yazidis: ‘Convert today – or die’
As Britain completes its first aid drop, terrified members of the beseiged Yazidi sect have reportedly been given the ultimatum by radical jihadis who have captured their villages
By Alastair Beach
10:49AM BST 10 Aug 2014

Hundreds of terrified families belonging to the besieged Yazidi sect have reportedly been threatened with execution if they refuse to convert to Islam today, according to reports.

Yazidi refugees who are stranded on Mount Sinjar said they have received calls from family members trapped behind enemy lines in villages now controlled by Islamic State jihadis.

They have reportedly been handed a brutal ultimatum: convert to Islam – or die.

According to Matthew Barber, an academic who is currently in northern Iraq, the ultimatum has been issued to families trapped in three villages held by the Islamic State.

“Hearing multiple accounts of a convert-or-die ultimatum,” he said on Twitter. “Yazidis may die in the morning if resisting conversion,” he added.

Mr Barber, a graduate student from the University of Chicago, said the threat was made to families in the villages of Hatimiya, Tel Kucho and Tel Qasab – all settlements which have fallen under the control of Islamic State fundamentalists following the group’s incursions into northern Iraq.

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Posted at 10:17 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mom and new grandson are doing well. Wait until the dogs, pig, sheep, donkey and mule see this.

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Jim Sinclair’s Commentary

The Middle East is burning, and there is no fire department.

Obama pledges long-term campaign to fight Iraq’s spreading jihadist crisis
US president admits there is no ‘quick fix’ as minorities flee Isis onslaught in northern Iraq and British planes join relief effort
Martin Chulov in Irbil, Mark Townsend in London, Jon Swaine in New York and agencies
The Observer, Sunday 10 August 2014

Barack Obama has committed the US to long-term involvement in Iraq, warning that the rapidly evolving crisis in the north would not be solved quickly.

Conceding that the advance of the Islamic State (formerly Isis) forces had been swifter than anticipated – details emerged on Saturday of the jihadists opening another front as they crossed into Lebanon from Syria – the president accepted there was no quick fix. His warning came as the archbishop of Irbil’s Chaldean Catholics told the Observer fewer than 40 Christians remained in north-western Iraq after a jihadist rampage that has forced thousands to flee from Mosul and the Nineveh plains into Irbil in the Kurdish north.

Archbishop Bashar Warda said: "We did not expect that one day Mosul would be without Christians and that the Nineveh plains would be emptied of minorities," referring to the stretch of land surrounding Mosul that had been hailed throughout the ages as a cradle of civilisation. "Trust is broken between the communities. Especially with the Arabs. For 2,000 years, all these minorities had lived together."

US aircraft targeted armoured vehicles and militant positions in a second day of strikes against Islamic State forces. A mix of US fighters and drones attacked and destroyed one of two armoured personnel carriers that were firing on Yazidi civilians near Sinjar, US central command said. Several other strikes followed.

Alongside this, the US-led air campaign to deliver relief to civilians fleeing Isis continued with a third drop of supplies taking place on Saturday night. The US military said the latest air drop involved planes from multiple air bases and included one C-17 and two C-130 cargo planes supported by fighter planes. The aircraft delivered 72 bundles of supplies, including more than 3,800 gallons of water and more than 16,000 meals.

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Jim Sinclair’s Commentary

The abuse of the commodity market by the financial superstars might go super nova.

Exclusive: Goldman, JPMorgan in Senate’s crosshairs for commodities holdings
By Patrick Rucker
WASHINGTON Fri Aug 8, 2014 6:47am EDT

(Reuters) – U.S. Senator Carl Levin is preparing a last push to bring Wall Street’s big commodity traders to heel during his final months in office, wrapping up a nearly two year-long probe that could potentially reveal abuses in energy and metals markets.

Levin’s investigators have met with representatives from Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N) in recent weeks, according to sources familiar with the matter.

Executives from those companies may appear at a hearing as early as September, during which Levin’s Permanent Subcommittee on Investigations would present the findings of the probe, the sources said.

Spokesmen for Goldman and JPMorgan declined to comment.

Specifically, Senate investigators have explored whether Wall Street has abused its commodities holdings at the expense of clients, consumers, the environment or the health of the market, according to the people familiar with the probe.

The probe’s findings and the possible hearing will add to the scrutiny Wall Street firms have already faced from the Federal Reserve and from other lawmakers over whether it is appropriate for banks to maintain vast holdings in metals warehouses and other physical commodities businesses.

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Jim Sinclair’s Commentary

Putin says Western companies are to cooperate with Russia regardless of sanctions. This should be interesting.

ExxonMobil, Rosneft start joint Arctic drilling in defiance of sanctions
Published time: August 09, 2014 13:30
Edited time: August 09, 2014 16:38

US oil giant ExxonMobil and Russia’s Rosneft will continue joint exploitation of the Russian Arctic despite Western sanctions, the American company said as the two giants launched exploration drilling in the Kara Sea.

"Our cooperation is a long-term one. We see great benefits here and are ready to continue working here with your agreement,” Glenn Waller, ExxonMobil’s lead manager in Russia, told President Vladimir Putin during a videoconference call.

The Russian leader hailed the exploration project as an example of mutually beneficial cooperation that strengthens global energy security.

Rosneft head Igor Sechin said the launch of the Universitetskaya-1 well drill is one of the most important events for the company this year.

“We hope that this work will discover a new oil reserve here in the Kara Sea. The development of the Arctic shelf would have a big and positive effect for the Russian economy,” he said.

Optimistic company forecasts put oil reserves in the Kara Sea as high as 13 billion tons, more than in the Gulf of Mexico, or the whole of Saudi Arabia.

The drilling is being done by the West Alpha oilrig, built by Norway’s North Atlantic Drilling. It has a deadweight of 30,700 tons and can drill wells in the shelf up to 7 km deep.

The rig was equipped with an advanced iceberg warning system, which tracks potentially dangerous icebergs, giving enough time for either support ships to tow them away, or for the rig itself to seal off the well and evacuate to safety.

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Washington Opened The Gates Of Hell In Iraq: Now Come The Furies
by David Stockman • August 8, 2014

The late, great critic of the American Imperium, Chalmers Johnson, popularized the salient concept of “blowback”. That is, the notion that if you bomb, drone, invade, desecrate and slaughter—collaterally or otherwise— a people and their lands, they might find ways to return the favor.

But even Johnson could not have imagined the kind of blowback coming ferociously Washington’s way now. Namely, the mayhem being visited on much of Iraq by American tanks, armored personnel carriers, heavy artillery, anti-aircraft batteries and other advanced weaponry that has fallen into the hands of the very jihadist radicals that have been the ostensible target of Washington’s entire multi-trillion “war on terrorism”.

No question about it. The ISIS terrorists are winning against the hapless Iraqi military and even the formidable Kurdish peshmerga fighters—using some of the most lethal arms that the US military-industrial complex could concoct.

Yes, that wasn’t supposed to happen. During the bloody years after George W. Bush declared “mission accomplished” the Iraqi’s were ostensibly provided the arms and training to provide for their own defense. The American “occupation”, therefore, was really not all that. Instead, it was actually an exercise in “nation-building” that would bequeath to the people Washington had “liberated”  a self-governing democracy equipped with the means to insure internal order and external security. Washington politicians—including President Obama—gave endless speeches about that. You can look them up!

Except…except….Iraq was never a nation. At least the Ottomans knew that you don’t put Shiite’s, Sunni and Kurds in the same parliament or police force, and most certainly not the same army!

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Jim Sinclair’s Commentary

A respected German source, yet Merkel threatens more sanction. I thought sanctions was the venue of the United Nation?

Essay in EnglischThe West on the wrong path
08.08.2014, 13:53 Uhr

In view of the events in Ukraine, the government and many media have switched from level-headed to agitated. The spectrum of opinions has been narrowed to the width of a sniper scope. The politics of escalation does not have a realistic goal – and harms German interests.

Every war is accompanied by a kind of mental mobilization: war fever. Even smart people are not immune to controlled bouts of this fever. “This war in all its atrociousness is still a great and wonderful thing. It is an experience worth having“ rejoiced Max Weber in 1914 when the lights went out in Europe. Thomas Mann felt a “cleansing, liberation, and a tremendous amount of hope“.

Even when thousands already lay dead on the Belgian battle fields, the war fever did not subside. Exactly 100 years ago, 93 painters, writers, and scientists composed the “Call to the world of culture.“ Max Liebermann, Gerhart Hauptmann, Max Planck, Wilhelm Röntgen, and others encouraged their countrymen to engage in cruelty towards their neighbor: “Without German militarism, German culture would have been swept from the face of the earth a long time ago. The German armed forces and the German people are one. This awareness makes 70 million Germans brothers without prejudice to education, status, or party.“

We interrupt our own train of thought: “History is not repeating itself!” But can we be so sure about that these days? In view of the war events in the Crimean and eastern Ukraine, the heads of states and governments of the West suddenly have no more questions and all the answers. The US Congress is openly discussing arming Ukraine. The former security advisor Zbigniew Brzezinski recommends arming the citizens there for house-to-house and street combat. The German Chancellor, as it is her habit, is much less clear but no less ominous: “We are ready to take severe measures.“

German journalism has switched from level-headed to agitated in a matter of weeks. The spectrum of opinions has been narrowed to the field of vision of a sniper scope.

Newspapers we thought to be all about thoughts and ideas now march in lock-step with politicians in their calls for sanctions against Russia’s President Putin. Even the headlines betray an aggressive tension as is usually characteristic of hooligans when they ‘support’ their respective teams.

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Jim Sinclair’s Commentary

16 Russian bombers probing Alaska. This is as serious as it gets.

Russian Nuclear Bombers Keep Roaming Closer to U.S. Airspace
By Polly Mosendz August 8, 2014 10:50 AM

Russian nuclear bombers were spotted flying near Alaska this week. The bombers were escorted by fighter jets, floating just outside of U.S. and Canadian airspace. This is the second such sighting since June, sparking the attention of American military jets.

Major Beth Smith, of the U.S. Northern Command and the North American Aerospace Defense Command (NORAD), has said "Over the past week, NORAD has visually identified Russian aircraft operating in and around the U.S. air defense identification zones." There have been about 16 Russian forays in the Alaskan and north Canadian area in the last 10 days.

It is not entirely uncommon to see Russian planes in this airspace, however, the increased number of such planes seems to be triggering some concern amongst the aviation military community, particularly given the increased tension in Ukraine. Smith referred to this number of forays as "a spike in activity."

Smith noted that these were training missions, though a spy plane and anti-submarine plane were spotted among the bombers. However, another defense official told the Washington Free Beacon they believe this is more than just a training flight. The official stated "[Russian strategic nuclear forces appear to be] trying to test our air defense reactions, or our command and control systems. These are not just training missions."

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Jim Sinclair’s Commentary

Shocking from the Asia Times. This is what central Asia is reading.

NATO is desperate for war
By Pepe Escobar

The North Atlantic Treaty Organization is desperate; it is itching for a war in battlefield Ukraine at any cost.

Let’s start with Pentagon supremo, US Defense Secretary Chuck Hagel, who has waxed lyrical over the Russian Bear’s "threat": "When you see the build-up of Russian troops and the sophistication of those troops, the training of those troops, the heavy military equipment that’s being put along that border, of course it’s a reality, it’s a threat, it’s a possibility – absolutely."

NATO spokeswoman Oana Lungescu could not elaborate if it was "threat" or "reality", absolutely or not, but she saw it all: "We’re

not going to guess what’s on Russia’s mind, but we can see what Russia is doing on the ground – and that is of great concern. Russia has amassed around 20,000 combat-ready troops on Ukraine’s eastern border."

In trademark, minutely precise NATOspeak, Lungescu then added that Russia "most probably" would send troops into eastern Ukraine under the cover of "a humanitarian or peace-keeping mission". And that settled it.

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Posted at 10:25 AM (CST) by & filed under In The News.

My Dear Extended Family,

I do not believe there has been a period in history when geopolitical threats have been so severe or profound in their world-changing capability. The world is on fire in key areas as the White House prepares for a vacation at Martha’s Vineyard. It will be interesting to see if our leadership stays in Washington in direct touch or if Washington moves to the Vineyard.

Isis is now threatening the oil rich Kurds who cannot stand up to Isis’s use of captured American heavy weapons. All of this can change world economics in an instant.

The Plunge Protection Team has been busy calming markets, but they cannot calm the underlying geopolitics. The world could look different Monday than it looks this Friday.

Meanwhile I am writing to you from the maternity ward of a local hospital where my youngest daughter is in the process of giving birth to a new grandson. I have been here since early this morning. The birth is now looking to be around 4pm this afternoon. It was actually easier to await the birth of my own children than it is the birth of theirs.

Monday is certainly going to be different for me with my new grandson.

Sincerely,
Jim

 

Stockman – Expect Historic & Worldwide Financial Destruction

Today David Stockman warned King World News that investors need to brace themselves for historic and worldwide financial destruction.  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, the man who is counsel to big money around the world, Michael Belkin, just spoke with KWN and issued a dire warning for the financial markets.  I just wondered how you see things at this point with the Dow recently tumbling and everything that is happening across the globe?  What should we expect?”

Stockman:  “Well, the watchword at this point is stay out of harm’s way.  We are headed into a perfect storm of policy failures.  This is not simply a failure by the Fed, which has inflated this massive bubble and painted itself into a corner with no clue how to get out, but we are also seeing an absolute failure of American world dominance….

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The West on the wrong path
08.08.2014, 13:53 Uhr

In view of the events in Ukraine, the government and many media have switched from level-headed to agitated. The spectrum of opinions has been narrowed to the width of a sniper scope. The politics of escalation does not have a realistic goal – and harms German interests.

DüsseldorfEvery war is accompanied by a kind of mental mobilization: war fever. Even smart people are not immune to controlled bouts of this fever. “This war in all its atrociousness is still a great and wonderful thing. It is an experience worth having“ rejoiced Max Weber in 1914 when the lights went out in Europe. Thomas Mann felt a “cleansing, liberation, and a tremendous amount of hope“.

Even when thousands already lay dead on the Belgian battle fields, the war fever did not subside. Exactly 100 years ago, 93 painters, writers, and scientists composed the “Call to the world of culture.“ Max Liebermann, Gerhart Hauptmann, Max Planck, Wilhelm Röntgen, and others encouraged their countrymen to engage in cruelty towards their neighbor: “Without German militarism, German culture would have been swept from the face of the earth a long time ago. The German armed forces and the German people are one. This awareness makes 70 million Germans brothers without prejudice to education, status, or party.“

We interrupt our own train of thought: “History is not repeating itself!” But can we be so sure about that these days? In view of the war events in the Crimean and eastern Ukraine, the heads of states and governments of the West suddenly have no more questions and all the answers. The US Congress is openly discussing arming Ukraine. The former security advisor Zbigniew Brzezinski recommends arming the citizens there for house-to-house and street combat. The German Chancellor, as it is her habit, is much less clear but no less ominous: “We are ready to take severe measures.“

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Tens of thousands pour into Iraq’s Kurdish north as US jets bomb Isis
Air strikes stop Islamic State militants on outskirts of Irbil, but elsewhere the jihadist group remains ascendant
Martin Chulov in Irbil, Owen Bowcott and Sam Jones
The Guardian, Friday 8 August 2014 19.32 BST

The moment the Kurds had been waiting for arrived in mid-afternoon; two US jets streaked low through a hazy sky dropping precision bombs on an artillery piece that Islamic State (Isis) militants had been using to attack Irbil.

After a long lull the air strikes intensified into the evening – though it was not clear who carried them out – muting Kurdish officials’ concerns that the US return to Iraq would be little more than symbolic and Isis’s momentum might only be slowed temporarily.

The provenance of the jets bombing south of Irbil on Friday evening could not immediately be established. The US has only acknowledged carrying out one attack. Kurdish officials suggested France may have been responsible, although French officials have not acknowledged sending fighter jets into combat.

The regular thud of bombs into the northern plains did not, however, slow the exodus from Arab Iraq into what is fast becoming the crumbling country’s last redoubt. Tens of thousands of Iraq’s newest displaced poured into the Kurdish north on Friday adding to the estimated half a million arrivals now being hosted by the regional administration.

Many of those arriving in Irbil were not as reassured as Kurdish officials by the return of the US to the battlefield. "We lost everything in an afternoon," said Miriam Athous, a Christian woman from Tal Kaif, south-west of Irbil. "Why should we be happy that the Americans come now? We were sitting in our homes like sheep in a lion’s den for two months."

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Jim Sinclair’s Commentary

The potential destabilization that could occur in the China Sea exceeds the total of today’s geopolitical developments.

Japanese aircrafts intrude into China ADIZ
2014-08-08 09:51 Web Editor: Qin Dexing

Click here to watch the video…

China’s grand plan for the South China Sea
By Billy Tea

Whether China’s decision to remove an oil exploration rig from waters hotly contested with neighboring Vietnam was motivated by bad weather, a completed mission, or rising diplomatic pressure from the United States, the move was the latest phase of Beijing’s grand plan to assert its sovereignty over the South China Sea.

While US Secretary of State John Kerry is scheduled to call for a "voluntary freeze" on all actions that could escalate disputes in the maritime area at a Southeast Asian security meeting this weekend, Beijing has already rejected the idea, saying it will retain its right to build on structures in its claimed areas. China’s nine-dash map claims over 90% of the 3.5 million square kilometer South China Sea.

There is a geo-strategic rationale rooted in realist foreign policies for Beijing’s rising assertiveness in the maritime area. In order to understand the present and anticipate the future, it is essential to look beyond recent events as isolated incidents and instead look towards Beijing’s long-term ambition for the highly strategic, hydrocarbon-rich sea.

China and a handful of Southeast Asian nations have long contested and sometimes clashed over different areas of the South China Sea. However, it was not until then United States Secretary of State Hillary Clinton declared at a July 2010 meeting of the Association of Southeast Asian Nations (ASEAN) Regional Forum in Hanoi that the US had a "national interest" in the South China Sea that the situation started to spiral downward.

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Spot gold market closer to reality
Futures dealers agree on format of exchange
Published: 8 Aug 2014 at 06.00

Seven gold futures dealers have agreed in principle on the format of a physical gold exchange, moving a step closer to establishing the country’s first spot gold market.

The dealers, which have a combined 90% market share of trade in paper and physical gold, have unanimously agreed on the make-up of the spot gold exchange, said Gold Traders Association chairman Jitti Tangsithpakdi without providing details.

The plan will be proposed to the Thailand Futures Exchange (TFEX) on Aug 18.

The seven dealers are Globlex Holding Management, Classic Gold Futures, GT Gold Bullion, YLG Group, Ausiris, MTS Gold and Hua Seng Heng Commoditrust.

Gold dealers are supporting the Stock Exchange of Thailand’s efforts to set up the exchange after a decline in trading volume due to the gold price slump and the soft launch of Singapore Exchange’s spot gold market.

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Russian nuclear-capable bombers ‘tested’ US air defenses 16 times in last 10 days
Published time: August 07, 2014 20:58
Edited time: August 08, 2014 12:19

Russian strategic nuclear bombers and other military aircraft entered US air defense identification zones (ADIZs) at least 16 times over the past ten days, American defense officials confirmed on Thursday.

“Over the past week, NORAD has visually identified Russian aircraft operating in and around the US air defense identification zones,” said Maj. Beth Smith, spokeswoman for US Northern Command and the North American Aerospace Defense Command (NORAD).

Smith sought to downplay the incursions that she called “a spike in activity,” telling the Washington Free Beacon’s Bill Gertz that the flights were assessed as routine training missions and exercises.

But an unnamed defense official familiar with the incursion reports disagreed with Smith’s assessment. “These are not just training missions,” the official told Gertz, saying that Russian strategic nuclear forces appear to be “trying to test our air defense reactions, or our command and control systems.”

NORAD scrambled fighter jets several times when Russian strategic aircraft flew along US ADIZs. The planes included a mix of Tu-95 Bear H heavy bombers and Tu-142 Bear F maritime reconnaissance aircraft, as well as one IL-20 intelligence collection aircraft, Smith said.

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Jim Sinclair’s Commentary

Russia and the Brics close economic ranks.

Russia Builds Mobile Sea Port, Attracts BRICS Investment
16:05 08/08/2014

MOSCOW, August 8 (RIA Novosti) – Russian state corporation Rostec is about to launch a unique mobile sea port, in which several companies from BRICS nations have expressed interest, the company said Friday.

"Moscow’s design bureau Compas is introducing into the market a unique independent development, a mobile multifunctional sea port, which can be set out at any unequipped shore within just a month. No one in the world has such projects," the company said in a press release.

The structure is made of floating docks and pontoons and includes all the infrastructure necessary for its operation, including communication and monitoring systems and an independent power supply.

The cost of the mobile port is several times lower than that of a stationary one, which allows the project to pay off more quickly, Rostec said.

"The mobile port complex has undergone all the necessary tests by now. A range of companies from BRICS countries [Brazil, Russia, India, China and South Africa] have expressed interest in the project. Today, African and Latin American countries are extremely interested in expanding foreign economic trade relations," Rostec’s press service quoted Compas’ CEO Vladimir Maslyuk as saying.

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Jim Sinclair’s Commentary

Sanctions are working to improve Russian and Chinese trade relations.

Western Sanctions See Russia Looking to China for Military, Aerospace Components

MOSCOW, August 6 (RIA Novosti) – Russian aerospace and military-industrial enterprises will purchase electronic components worth several billion dollars from China, Izvestia reported Wednesday, referencing a source close to Roscosmos, Russia’s Federal Space Agency.

“We do work with the China Aerospace Science and Industry Corporation (CASIC) … Its institutions have already offered us a few dozen items, representing a direct alternative to, or slight modifications of the elements we will no longer be able to acquire because of the sanctions introduced by the United States,” Izvestia reported.

The newspaper also noted that the Russian aerospace and military industries do not use components produced in China at the moment.

“Over the next two, two-and-a-half years, until Russian manufacturers put the necessary space and military electronic components into production, plans call for the purchase of such items from China amounting to several billion dollars” Izvestia reported, quoting a source, close to Roscosmos.

Citing the source, the newspaper added that that 18 representatives of 12 CASIC institutions engaged in the development and production of electronic components will visit Moscow to take part in a special workshop for Russian manufacturers in August. A parallel workshop will be held in St. Petersburg.

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Jim Sinclair’s Commentary

And the next country to join the renminbi fan club is.

And the next country to join the renminbi fan club is…
by Simon Black on August 6, 2014
August 6, 2014
Vilnius, Lithuania

When you think about “strong banking”, what country comes first to mind?

A few years ago, the most obvious answer would be Switzerland.

Today, however, Switzerland’s reputation for banking is nowhere near where it once was.

Starting in 2009, the US, as chief financial bully, led the charge in assaulting the country’s banking sector and dragging it down brick by brick.

The pummelling has continued ever since, culminating in the end of banking secrecy in the country altogether.

Meanwhile, as Switzerland endured one blow after the next, the Chinese renminbi (RMB) quietly slipped past the steadfast Swiss franc to become a more popular currency for use in trade settlements.

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U.S. Warplanes Strike Militants in Iraq
By ALISSA J. RUBIN, TIM ARANGO and HELENE COOPERAUG. 8, 2014

DOHUK, Iraq — American warplanes struck Sunni militant positions in northern Iraq on Friday, the Pentagon and Kurdish officials said, confirming the first significant American military operation in the country since United States forces withdrew in 2011.

Two F-18 fighters dropped 500-pound laser-guided bombs on a mobile artillery target near Erbil, according to a statement by Rear Adm. John Kirby, the Pentagon press secretary. Militants of the Islamic State in Iraq and Syria were using the artillery to shell Kurdish forces defending Erbil, “near U.S. personnel,” Admiral Kirby said.

The strike followed President Obama’s announcement Thursday night that he had authorized limited airstrikes to protect American citizens in Erbil and Baghdad, and, if necessary, to break the siege of tens of thousand of refugees who are stranded on Mount Sinjar in northern Iraq.

“As the president made clear, the United States military will continue to take direct action against ISIL when they threaten our personnel and facilities,” Admiral Kirby said, referring to the Islamic militants by another translation of their Arabic name.

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Posted at 6:34 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Dude shows his affection.

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Al Qaeda-Iraq captures the Mosul Dam, Iraq’s largest
DEBKAfile August 7, 2014, 7:33 PM (IDT)

The IS has captured the hydroelectric dam on the Tigris River, which provides northern Iraq with power and is the largest in the country. Its failure could send a 65-foot wave across large areas of Iraq including a flood one meter deep in Baghdad.

Also Thursday, Islamists overran 14 towns with Christian majorities in northern Iraq, putting tens of thousands to flight with an ultimatum: Convert to Islam or die. Church leaders have appealed for immediate help.

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Airstrikes on ISIS Militants Have Begun, Kurds and Iraqis Say
By HELENE COOPER and ALISSA J. RUBINAUG. 7, 2014

WASHINGTON — Airstrikes on towns in northern Iraq seized by Islamist militants began late Thursday in what Kurdish and Iraqi officials called the first stage of an American-led intervention to blunt the militants’ advance and provide emergency aid to tens of thousands of refugees.

Kurdish and Iraqi officials attributed the bombing campaign to American forces. But the Pentagon firmly denied that American forces had begun a bombing campaign. Pentagon officials said it was possible that allies of the United States, either the Iraqi or Turkish militaries, had conducted the bombing.

A Turkish official said the country’s air force had not conducted any operations. The official, who spoke on the condition of anonymity, said Turkey had been helping the Kurdish regional government in northern Iraq with humanitarian supplies. “There is no such thing,” he said, referring to airstrikes.

Early Friday in Ankara, the Turkish capital, Prime Minister Recep Tayyip Erdogan met with the country’s top national security officials to discuss the situation.

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Jim Sinclair’s Commentary

This is the 2nd reduction by the pension funds.

Yen sapped by pension plans; Euro keeps low profile after ECB

The yen sagged against the dollar on Thursday, coming under pressure from news that Japan’s public pension fund plans to increase its allocation to the domestic stock market.

Separately, the euro held steady above $1.33 as investors digested the European Central Bank’s decision to hold fire on interest rates.

The dollar rose 0.3 percent to above 102 yen, pulling away from a 1-1/2 week low near 101.76 yen set on Wednesday. It was roughly steady against the euro and just below 11-month highs against a trade-weighted basket of major currencies.

All eyes in Europe will be on the European Central Bank’s monthly news conference, starting at 830 Eastern, but the action overnight was all about the yen and the Australian dollar. The latter was down almost 1 percent to hit a two-month low after data showed a rise in the Australian jobless rate.

The yen, attractive overnight for investors seeking shelter from growing tensions between the West and Russia, weakened as Tokyo shares pushed higher after political sources told Reuters that Japan’s Government Pension Investment Fund (GPIF) plans to put over 20 percent of its funds in domestic stocks compared with a current 12 percent target.

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Gold Jumps As Ukrainian Fighter-Jet Shot Down Over Donetsk
Tyler Durden on 08/07/2014 12:13 -0400

Gold futures broke above $1315 as a double whammy of NATO threats and Ukraine headlines spark safe-haven buying:

*FIGHTER JET SHOT DOWN OVER REBEL-HELD EAST UKRAINE: AFP

10Y Treasury yields are under 2.43% and JPY is strengthening once again as carry trades are unwound.

As Bloomberg notes, Fighter jet shot down over East Ukraine, AFP reports, without citing where it obtained the information.

As AFP reports,

A Ukranian fighter jet was shot down on Thursday as it flew low over rebel-held territory in the east of the country, an AFP journalist witnessed.

The aircraft crashed into a field after an explosion and the pilot was seen parachuting out in an area some 40km east of the insurgent bastion of Donetsk

The reaction…

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Jim Sinclair’s Commentary

Geopolitics is important to the price of gold.

Central banks continuing to boost gold reserves
Many nations are accumulating gold reserves. We take a closer look at those countries leading the charge.
Author: Shivom Seth
Posted: Tuesday , 05 Aug 2014

MUMBAI (MINEWEB) – Given the crisis in Ukraine and deteriorating ties with the West, Russia has been aggressively accumulating gold reserves.

The IMF, in its recently released International Financial Statistics report, showed that the Russian central bank has hiked its gold holdings by 16.8 tonnes to 1,094.8 tonnes in June.

Indeed, most central banks are increasing their gold reserves, IMF data showed. Russia, Mexico, Kazakhstan, Kyrgyzstan, Tajikistan, Serbia, Greece and Equador have all reported higher gold reserves for June.

Between Q1 2009 to Q1 2014, Russia’s gold reserves almost doubled to 1,040.71 tonnes, while India’s central bank increased its gold reserves 56% to 557 tonnes. China’s central bank, on the other hand, increased its gold reserves 75% to 1,054 tonnes when it last stated official reserves in 2009, data showed. It is widely believed that China has accumulated larger – possibly much larger – reserves since

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Jim Sinclair’s Commentary

Retaliation only makes the waters muddier.

Western food imports off the menu as Russia hits back over Ukraine sanctions
Dmitry Medvedev says Moscow is also prepared to introduce measures in aviation, shipbuilding and automobile sectors
Shaun Walker and Jennifer Rankin
theguardian.com, Thursday 7 August 2014 12.54 EDT

Russians will no longer be able to buy fruit, vegetables, meat, fish or dairy products from the EU and the US, as the full scope of Moscow’s food import ban became apparent on Thursday.

President Vladimir Putin told officials on Wednesday to come up with a list of western agricultural products and raw materials to be banned, in reaction to western sanctions over Russia’s policies in Ukraine.

Russia’s prime minister, Dmitry Medvedev, said the ban was effective immediately and would last for a year. It covers most foodstuffs from the US, the 28 EU countries, Canada, Australia and Norway.

"Until the last moment, we hoped that our foreign colleagues would realise that sanctions lead to a blind alley, and that no one benefits from them. But they didn’t realise this, and now we have been forced to respond," Medvedev said.

The EU and US have sanctioned a number of Russians, including billionaires believed to be close to Putin and those actively involved in the annexing Crimea and the unrest in eastern Ukraine. After the downing of Malaysia Airlines flight MH17, which pro-Russia rebels are believed to have shot down , a number of key Russian banks were also sanctioned, cutting them off from European capital markets.

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Jim Sinclair’s Commentary

Sanctions bypassed and dollar to be bypassed.

Vladimir Putin signs historic $20bn oil deal with Iran to bypass Western sanctions
Five-year accord will see Russia help Iran organise oil sales, but government denies it has violated international obligations
By Andrew Trotman
4:40PM BST 06 Aug 2014

Vladimir Putin has agreed a $20bn (£11.8bn) trade deal with Iran that will see Russia sidestep Western sanctions on its energy sector.

Under the terms of a five-year accord, Russia will help Iran organise oil sales as well as “cooperate in the oil-gas industry, construction of power plants, grids, supply of machinery, consumer goods and agriculture products”, according to a statement by the Energy Ministry in Moscow.

The Russian government issued a new statement on Wednesday after mysteriously withdrawing a similar release on Tuesday.

Russian Energy Minister Alexander Novak said on Wednesday that his government will help Iran bring its oil to market. In return, Iran wants to imort power and pump equipment, steel products such as pipes, machinery for its leather and textile industries, wood, wheat, pulses, oilseeds and meat.

Iran "is also interested in the joint construction of power generation and development of coal deposits", Mr Novak added.

Further talks between the two countries will take place next month, he said.

A deal could see Russia buying 500,000 barrels of Iranian oil a day, the Moscow-based Kommersant newspaper has previously reported. That would be about a fifth of Iran’s output in June and half its exports.

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Jim Sinclair’s Commentary

Down, down under. We are still in a global economy making certain recent US indices incredible.

Australia jobless rate worst in at least a decade
Aug. 6, 2014, 10:16 p.m. EDT
By James Glynn

SYDNEY–Unemployment in Australia surprisingly jumped to its highest level in at least a decade in July, confirming the economy remains weak and raising the prospect that the next move in interest rates may be down.

The jobless rate rose to a seasonally adjusted 6.4% in July from 6.0% in June, the Australian Bureau of Statistics said Thursday. Economists had expected an unemployment rate of 6.1% in the month.

The number of people employed fell by 300, compared with an expected 12,000 rise, the ABS said. The number of people in full-time work rose 14,500, while those in part-time work fell 14,800.

The bureau said its seasonally adjusted workforce participation rate, or the proportion of working-age people at work or actively seeking work, rose to 64.8% in July from 64.7% in June and was slightly higher against a consensus expectation of 64.7%.

The Reserve Bank of Australia has held interest rates at a record low 2.5% for a year to buttress the economy against a mining slowdown, which has pushed unemployment higher over the past year.

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Jim Sinclair’s Commentary

To discount the geo political in all markets is to put on blinders.

Russia bans all U.S. food, EU fruit and vegetables in sanctions response; NATO fears invasion
By Polina Devitt and Maria Tsvetkova
MOSCOW/DONETSK Ukraine Wed Aug 6, 2014 7:52pm EDT

(Reuters) – Russia will ban all imports of food from the United States and all fruit and vegetables from Europe, the state news agency reported on Wednesday, a sweeping response to Western sanctions imposed over its support for rebels in Ukraine.

The measures will hit consumers at home who rely on cheap imports, and on farmers in the West for whom Russia is a big market. Moscow is by far the biggest buyer of European fruit and vegetables and the second biggest importer of U.S. poultry.

RIA quoted the spokesman for Russia’s food safety watchdog VPSS, Alexei Alexeenko, as saying all European fruit and vegetables and all produce from the United States would be included in a ban drawn up on the orders of President Vladimir Putin to punish countries that imposed sanctions on Russia.

Earlier, Alexeenko told Reuters bans on EU and U.S. goods would be "quite substantial", and would specifically include U.S. poultry, although he declined to give a full list of banned goods. He could not be reached again after the RIA report.

The war of economic sanctions has escalated even as fighting has intensified on the ground in eastern Ukraine in the three weeks since a Malaysian airliner was shot down over territory held by pro-Russian rebels.

NATO said on Wednesday Russia had massed around 20,000 combat-ready troops on Ukraine’s border and could use the pretext of a humanitarian mission to invade. It was the starkest warning yet from the Western alliance that Moscow could mount a ground assault on its neighbour.

As rebels have lost ground to Ukrainian government troops, Russia announced military exercises this week near the border.

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Jim Sinclair’s Commentary

More sanctions side stepped. Will the dollar be?

Russia Just Bypassed A Big Part Of EU Sanctions
Alexei Lossan, Russia Beyond The Headlines
Aug. 6, 2014, 9:31 AM

Russian state oil company Rosneft has concluded agreements with Norwegian and Swiss companies that circumvent EU sanctions prohibiting the supply of technologies and equipment for deep-sea oil production, including on the Arctic shelf.

In early August 2014, Rosneft bought a stake in one of the world’s largest oilfield contractor companies – Swiss Weatherford, RBTH learned from the press service of Rosneft.

According to the agreement, the Russian side will receive eight subdivisions engaged in drilling and well repairs in Russia and Venezuela.

The parties have also agreed on long-term cooperation in the field of oilfield services. The amount of the transaction was not disclosed, but it was learned from the decision of the board of directors of the Russian company on July 28 that Rosneft paid no more than $398.3 million for the Swiss assets.

Rosneft has also signed a long-term agreement on offshore drilling with the Norwegian company North Atlantic Drilling Ltd. The transaction involves the purchase, up to the year 2022, from the Norwegian side, of six offshore rigs for offshore production, including for work in Arctic conditions.

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Posted at 10:24 AM (CST) by & filed under Jim's Mailbox.

Jim,

Under the cover of sanctions against stalking-horse Russia, China ups the ante against the US. Xi is brutal.

CIGA Craig

Craig,

This action by China is very important to the level of geopolitical tensions.

Jim

China to build lighthouses on five isles in defiance of U.S. call
BEIJING Thu Aug 7, 2014 6:00am EDT

China plans to build lighthouses on five islands in the South China Sea, state media reported on Thursday, in defiance of calls from the United States and the Philippines for a freeze on such activity to ease tension over rival claims.

At least two of the islands upon which China said it will put up lighthouses appear to be in waters also claimed by Vietnam.

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Posted at 7:03 PM (CST) by & filed under Jim's Mailbox.

Jim,

It is looking more and more likely that the US will be its own undoing of the reserve currency status of the dollar.

CIGA Larry

Russia Sanctions Accelerate Risk to Dollar Dominance
By Rachel Evans Aug 6, 2014 11:51 AM ET

U.S. and European Union sanctions against Russia threaten to hasten a move away from the dollar that’s been stirring since the global financial crisis.

One place the shift has become evident is Hong Kong, where dollar selling has led the central bank to buy more than $9.5 billion since July 1 to prevent its currency from rallying as the sanctions stoked speculation of an influx of Russian cash. OAO MegaFon, Russia’s second-largest wireless operator, shifted some cash holdings into the city’s dollar. Trading of the Chinese yuan versus the Russian ruble rose to the highest on July 31 since the end of 2010, according to the Moscow Exchange.

While no one’s suggesting the dollar will lose its status as the main currency of business any time soon, its dominance is ebbing. The greenback’s share of global reserves has already shrunk to under 61 percent from more than 72 percent in 2001. The drumbeat has only gotten louder since the financial crisis in 2008, an event that began in the U.S. when subprime-mortgage loans soured, and the largest emerging-market nations including Russia have vowed to conduct more business in their currencies.

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Jim,

Despite all of Draghi’s money printing, the reality of no real recovery remains.

CIGA Craig

Italy shows euro zone may never have left recession
Aug. 6, 2014, 11:25 a.m. EDT

NEW YORK (MarketWatch)—For U.S. investors who piled into European equities last year, Italy’s unexpected second-quarter contraction raises the question of whether the euro zone itself ever actually left recession.

Italy’s 0.2% quarter-on-quarter contraction (which made for a year-on-year drop of 0.4%) is being widely billed as the third dip into recession territory since 2007. But in reality, the Italian economy has managed to eke out only one paltry quarter of growth in the past three years.

So rather than lament a triple dip, Italians could be forgiven for feeling they never escaped a recession in the first place.

The notion of an Italian triple dip rests on the technical definition of a recession as at least two consecutive quarters of contraction. For economists, however, a recession is a significant fall in activity across the economy that lasts more than a few months. The National Bureau of Economic Research is the arbiter of the U.S. business cycle and doesn’t necessarily need to see two straight quarters of contraction to call it a recession.

Europe doesn’t have a similarly recognized referee. But in June, the business cycle dating committee of the London-based Center for Economic Policy Research think tank argued that it was premature to say the euro zone recession had ended.

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