Jim Sinclair’s Commentary
Here is a confidential picture taken inside one of the Fed meetings.
Jim Sinclair’s Commentary
Somehow they understand in Europe.
Police Barricade European Central Bank Ahead Of Protests
Tuesday March 17, 2015 12:05 PM
FRANKFURT, Germany (AP) — Police in Frankfurt, Germany, have put up barricades and barbed wire around the headquarters of the European Central Bank as they brace for potentially violent demonstrations against government austerity and capitalism.
The Blockupy alliance says activists plan to try to blockade the new headquarters of the ECB ahead of a ceremony Wednesday inaugurating the building, and to disrupt what they term capitalist business as usual.
Some 10,000 people are expected for a rally in Frankfurt’s main square, the Roemerberg. Organizers have chartered a special train bringing demonstrators from Berlin and are busing in others from around Germany and other European countries.
Frankfurt police say most demonstrators are expected to be peaceful, but that violence-prone elements could use the crowds as cover.
The ECB, along with the European Commission and International Monetary Fund, is part of the so-called “troika” that monitors compliance with the conditions of bailout loans for financially troubled countries such as Greece. Those conditions include spending restraint and reducing deficits, moves that are aimed at reducing debt but have also been blamed for high unemployment and slow growth.
Greece’s new left-wing government blames such policies for a “humanitarian crisis” leading to poverty for pensioners and the unemployed.
ECB President Mario Draghi has called for more spending by governments that are in good financial shape such as Germany — a call that has been mostly ignored by elected officials.
The ECB says it plans to be “fully operational,” although some employees may work from home.
ECB Prepares For Grexit, Anticipates 95% Loss On Greek Debt
Submitted by Tyler Durden on 03/18/2015 09:57 -0400
Dear Greek readers: the writing is now on the wall, and it is in very clear 48-point, double bold, and underlined font: when the ECB “leaks” that it is modelling a Grexit, something Draghi lied about over and over in 2012 and directly in our face too, take it seriously, because it is time to start planning about what happens on “the day after.” And incidentally to all those curious what the fair value of peripheral European bonds is excluding ECB backstops, the ECB has a handy back of the envelope calculation: a 95% loss.
Which also is the punchline, because while the ECB is making it very clear what happens next in the case of a “Graccident”, it has yet to provide an explanation how it will resolve the billions of Greek debt held on its own balance sheet which are about to be “marked-to-default”…
… and on which it is prohibited from suffering a loss, or else Draghi will have to fabricate even more on the run rules about how the ECB balance sheet is loss-proof… expect in this case, or that, or the other.
From Manager Magazin, google-translated:
The European Central Bank (ECB) is preparing for a possible Greek exit from the euro zone. In internal model calculations, the central bank has already calculated the consequences of different scenarios on the prices of Greek government bonds.
Fernando González Miranda, head of risk analysis of the ECB, assumed for his model calculations three different developments of the Greek crisis, the magazine reports. These variants have also been presented to our colleagues from the Bundesbank few days ago.
Under this method, the value of Greek government debt – currently around € 320 billion – in the event of a sudden, “accident-like” Farewell to the Greeks from the Euro-zone (“Graccident”) shrink to around 5 percent of the principal amount. If it were the Greek Government, however, to complete the withdrawal on the basis of ordered negotiations (“Grexit”), the ECB expects a residual value of government bonds by nearly 14 percent. And should it even create the country to negotiate a recent haircut, without having to give up the single currency, the government securities could keep at least a quarter of its original value.
Putin made his move…
Russia has begun “dumping” U.S. dollars
Dear Concerned American,
This is a quickly developing story that you need to see. It’s being reported that under the direct order of President Vladimir Putin, Russia has begun dumping U.S. dollars.
In the most recent month, the amount of dollars dumped added up to an estimated $8.8 billion in a 30-day period. However, new details are emerging that suggest this attack on our currency may quickly escalate.
Putin has been taking a series of calculated measures to expose weak spots in our economy and national security that pre-date his Crimean invasion.
But according to this must-see presentation from our team of financial experts, what he’s now setting in motion could bankrupt millions of Americans virtually overnight. That’s why we’re giving you access privileges to watch it right now – along with free follow-ups from Money Morning on this and more of the biggest stories that affect your personal wealth.
Publisher, Money Morning
Jim Sinclair’s Commentary
A hodgepodge of controls from cash to gold.
Google Translation :
The finance minister, M S, announced several measures including the prohibition to pay more than 1,000 euros in cash, as part of the “fight against the financing of T” in Le Parisien / Aujourd’hui en France on Wednesday.
In the name of ‘”the fight against the financing of T’” M S launches a manhunt to cash, writes that in “Finance Minister announces measures to minimize the use of cash. “
The first measure concerns the “prohibition to pay more than 1,000 euros in cash,” said Le Parisien explains. “So far, French consumers could address up to 3,000 euros cash purchases This maximum will be decreased to 1,000 euros. For non-residents, ie foreign tourists, the maximum is also lowered, from 15,000 to 10,000 euros. The cash payment allows indeed to recycle money from dubious origins. “
The measure “will be applied from 1 September 2015,” said M S the newspaper.
“The large withdrawals” will “systematically monitored,” the newspaper. “Banks should report any movement of funds or behavior that they consider suspicious to Tracfin, the Economy Ministry’s department for the fight against money laundering and financing of terrorism. But there was far no automatic threshold statement, “the paper recalls.
Now, “they will systematically report to Tracfin any deposit or withdrawal of superior species to 10,000 euros a month.” And from 1 January 2016. This delay is necessary to allow time for banking organizations to update their computer systems, points M S.
“From January 1, exchange offices will ask for ID when a person wants to exchange more than 1,000 euro currency,” the newspaper.
Another measure, “the obligation to declare capital transiting cargo.” “A customs declaration is mandatory if you enter the country with a ticket suitcase or a valuable commodity like gold,” the newspaper said. “But so far, it was not if you were delivered by post. From 1 January 2016, these physical capital transfers cargo and express cargo will have to be declared to the customs.”
Jim Sinclair’s Commentary
The EU committed economic suicide when it signed on to the Russian sanctions.
Against US Strategy: Spain Calls for End to Confronting Russia
Madrid has recently joined the growing club of EU nations objecting to anti-Russian sanctions
The article originally appeared at German Economic News.
Translated for RI by Anita Zalaldinova
Spanish Foreign Minister Jose Manuel Garcia-Margallo spoke out against anti-Russian sanctions during his state visit to Moscow. These sanctions, he said, are harmful for both sides. Prior to this, Hungary, Italy, Greece and Cyprus had spoken out against the sanctions as well.
Spanish Foreign Minister Jose Manuel Garcia-Margallo said after a meeting with his Russian counterpart Sergei Lavrov in Moscow on Tuesday that the continuation of anti-Russian sanctions or their extension basically depend on ‘whether the agreements on Ukraine are complied with or not’. The sanctions are not advantageous for either side, EU Observer quoted García-Margallo.
In addition, there is no need for the extension of sanctions. Since the rebels in Ukraine withdrew their heavy weapons on the basis of the Minsk peace agreement which they thus obey. This is a positive development. The EU also needs to take into account Russia interests while developing its relations with Ukraine. García-Margallo added that the food sanctions of the Kremlin had affected the Spanish economy.
‘These sanctions have inflicted great damage on the Spanish economy (…) We have large losses, especially in the agricultural sector (…) I think that we need to somehow include Russia’s interests into the Association Agreement between the EU and Ukraine’, said the Spanish Foreign Minister.
Russian Foreign Minister Sergei Lavrov believes in a revision of the sanctions. ‘I would appreciate and prefer the situation in which each Member State of the EU is guided by its national interests’, said Lavrov. So Spain is a ‘long-standing and trusted partner’ but the Ukrainian crisis has led to a ‘difficult phase’ in European-Russian relations. Madrid and Moscow would like to create a bilateral multy-agency working group in order to combat international terrorism and to facilitate the adoption of Russian children by Spanish families.
A Nation Divided (Or “It’s Not The Weather, Stupid”)
Tyler Durden on 03/17/2015 18:55 -0400
Blame the weather… not so fast… It appears to be time to geographically and seasonally adjust the data…
And here is Steve Liesman Status Quo “It’s the weather, stupid” meme being destroyed by Diana Olick…
Whether you “believe” or not, the ranting is hilarious and we are sure Diana Olick will not be seen on screen again for a while (which is shame for numerous reasons)
Jim Sinclair’s Commentary
Who said the Greek exit from the EU would not be contagious?
Grexit Contagion Resumes After IMF Slams “Most Unhelpful Client Ever”
Submitted by Tyler Durden on 03/18/2015 09:20 -0400
Draghi, we have a problem. Despite the omnipotent buying power of the all-knowing ECB, peripheral European bond spreads are blowing out again (and stocks dropping) as Grexit fears start to spread contagiously across the continent. As Greece’s cash crunch looms ever closer (with capital controls looming) and bulls “throw in the towel” on the “nuts” Greeks, the IMF has come out and rubbed Mediterranean salt into that wound by telling the Eurogroup that Greece is the most unhelpful country the organization has dealt with in its 70-year history. As Bloomberg reports, in a short and bad-tempered conference call on Tuesday, officials from the ‘Troika’ complained that Greek officials aren’t adhering to a bailout extension deal leaving Dijsselbloem hinting at Cypriot templates for Greece.
The ‘Troika’ is not happy… International Monetary Fund officials told their euro-area colleagues that Greece is the most unhelpful country the organization has dealt with in its 70-year history, according to two people familiar with the talks. As Bloomberg reports,
In a short and bad-tempered conference call on Tuesday, officials from the IMF, the European Central Bank and the European Commission complained that Greek officials aren’t adhering to a bailout extension deal reached in February or cooperating with creditors, said the people, who asked not to be identified because the call was private.
German finance officials said trying to persuade the Greek government to draw up a rigorous economic policy program is like riding a dead horse, the people said, while the IMF team said Greece’s attitude to its official creditors was unacceptable. The German Finance Ministry didn’t respond to multiple requests seeking comment.
Concern is growing among officials that the recalcitrance of Prime Minister Alexis Tsipras’s government may end up forcing Greece out of the euro, as the cash-strapped country refuses to take the action needed to trigger more financial support. Tsipras is pinning his hopes for a breakthrough on a meeting with ECB President Mario Draghi, German Chancellor Angela Merkel, French President Francois Hollande and European Commission head Jean-Claude Juncker this week in Brussels.
March 18, 2015
The United States government just went from “Please, baby, don’t leave me,” to frustrated threats and whining.
After the UK announced it will join new China-led Asian Infrastructure Investment Bank (AIIB) as a founding member late last week, Germany, France and Italy decided yesterday to follow Britain’s lead and join as well.
Welcome to the beginning of the end of the US dollar’s domination. It’s happening.
For the past few decades America was the undisputed global economic and political superpower.
The entire world happily used the US dollar, and hence, the US banking system. More importantly, the world happily placed its trust in the US government.
But there’s a limit to how irresponsible, reckless, and threatening you can be. Eventually such behavior catches up to you.
That time has now come.
The US government is now drowning in debt that can never be repaid. The US government’s own numbers, in fact, estimate its level of insolvency at roughly $60 trillion.
This means that when you add up all the assets of the United States—every acre of land, every tank, every drone, every drop of oil in the strategic reserve… and subtract all the debt and liabilities, the result is MINUS $60 trillion.
That is the net worth of the United States government.
On top of that, the US government has chosen to use its once-trusted currency and banking system as weapons to blackmail the rest of the world.
FATCA (the Foreign Account Tax Compliance Act) is probably the best recent example.
FATCA’s provisions require every single bank in the world to jump into bed with the Internal Revenue Service and agree to all sorts of expensive, debilitating information-sharing agreements.
And any bank which dares to defy the US government gets effectively blackballed from the US banking system and subject to a 30% withholding tax.
On top of that, the US government has taken to slamming foreign banks with the most astonishing fines—$9 billion, for example, in the case of French Bank BNP Paribas.
BNP’s wrongdoing was conducting business with countries, like Cuba and Iran, that the US government doesn’t like.
Bear in mind, BNP is a French bank and broke no French law whatsoever.
Moreover, the business was done through its Swiss subsidiary, and they broke no Swiss law either.
That didn’t matter to Uncle Sam, which fined the bank $9 billion under threat of being kicked out of the US banking system.
Blackmail. Extortion. Intimidation. This isn’t the behavior of a trusted friend. It’s the behavior of an arrogant sociopath.
And the rest of the world is sick of it.
Other countries—even allied nations—see that times are changing. There are new players on the rise, and the US isn’t the only option anymore.
Increasingly they’re turning to China, who, by some metrics, is already the largest economy in the world.
And the US government can’t do anything about it.
This is happening now with increasing speed. It’s mainstream news everywhere: the US is being shunned by its allies for the new kid on the block.
This has major implications for the United States. History shows that when reserve currencies change, the losing country almost invariably goes through significant turmoil.
But here’s the thing—the world is changing. But it’s not coming to an end.
Yes, things will change dramatically in the West in the coming years.
The standard of living that was attainable in the US because of its economic dominance will diminish.
For cues, look to Europe to see how unsustainable policies unravel when you don’t have the backing of the world’s reserve currency.
But people who recognize and embrace these changes early will prosper, for there will be tremendous opportunities throughout this process.
Modern technology means that all of our lives don’t have to be trapped within one single bankrupt country.
You can move your savings abroad to safety.
You can structure your business and assets so that you keep more of your hard-earned income for yourself and your family.
You can seek out investment opportunities out there that aren’t subjected to chasing bubbles induced by world central banks.
You can plan ahead and establish an alternative residency in a safe and thriving place, and perhaps even qualify for a second passport.
Bottom line– the world is changing. We can’t stop the end of the dollar’s dominance. All we can control is how we react to it… and when.
This is a real opportunity. Either an opportunity to gain, or an opportunity to lose. The choice is ours to make.