Posted at 11:19 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Everything that seems smart may or may not be.

Insolvent sovereign’s bonds trading at or near zero, some at negative interest rates. You might have to pay money to lend your money to an insolvent…

This is more of a bubble than the South Sea Bubble or Tulip Craze. In fact, it makes those two look somewhat logical in comparison. However, this is the “New Normal” which will turn out to be exactly as did the “Plateau of Prosperity.”

Herein is the ultimate black swan.



Jim Sinclair’s Commentary

Strange friends plus the canned comment by governments whenever something sticky happens. “It never happened.”

Another ‘Conspiracy’ Confirmed: Khomeini Had A “Secret Channel” With The US
by James Corbett
June 7, 2016

It’s been an open secret that the US organized and enabled two of the three major events in modern Iranian history: the overthrow of the democratically elected Prime Minister Mohammad Mossadegh in 1953 and the Shah’s subsequent reign of terror (and eventual exile). But newly-released documents confirm that the US had a larger role than previously admitted in the third: the Islamic Revolution of 1979.

The documents, reported on last week by the BBC’s Persian Service, confirm that Ayatollah Khomeini was in direct communication with US President Jimmy Carter in the crucial weeks following the Shah’s departure from Iran on January 16, 1979. And, despite vigorous denial by the Iranian government, the records show that Khomeini struck a conciliatory tone with the US government as he attempted to broker his return to the country.

“You will see we are not in any particular animosity with the Americans,” Khomeini wrote in a message to US President Jimmy Carter at the time, part of a series of recently declassified diplomatic cables, policy memos, meeting records and other documents obtained by the BBC. The White House responded that they would not be adverse to the possibility of a change in the Iranian constitution, a tacit acceptance of the overthrow of the shah and institution of a republic. Khomeini, in return, assured Carter that: “The oil flow will continue after the establishment of the Islamic Republic.”



Bill Holter’s Commentary

A very good explanation of China and silver.

Posted at 11:17 PM (CST) by & filed under Jim's Mailbox.


After all, they only ship food, clothing, energy products, furniture, yada yada yada…


Freightliner Laying Off 800 Employees in NC
Posted June 6th, 2016 @ 4:00pm

GASTON COUNTY, N.C. —  Freightliner management is holding a town hall meeting with employees Monday at the Mount Holly and Gastonia plants, Channel 9 has learned.

Daimler Trucks North America said it is reducing its workforce across North America, including the plants in Mount Holly and Gastonia. The last day for Mount Holly will be July 1. The last day for Gastonia will be June 24.

The workforce reduction at the Mount Holly North Carolina Manufacturing facility will impact approximately 600 workers.

The workforce reduction at the Gastonia, North Carolina Components and Logistics facility will impact approximately 200 workers.

The company already laid off 1,250 employees at the Mount Holly and Cleveland plants.


Posted at 2:44 PM (CST) by & filed under In The News.

Bank of Montreal warns against other banks in gold business
By: Chris Powell, Secretary/Treasurer, GATA

Dear Friend of GATA and Gold:

A year ago February, Bank of Montreal announced plans to start a physical gold fund –…

– and today the bank filed a prospectus with the U.S. Securities and Exchange Commission signifying intent to stock the fund with $500 million of gold, to denominate the shares in ounces, to vault the metal at the Royal Canadian Mint, and to give investors the option of withdrawing their investment in real metal:…

The prospectus provides a few interesting and even amusing details:

– It cautions that the “official sector” is active in the gold market and can affect prices, an acknowledgment that will never make it into any reports by mainstream financial news organizations.

– The fund will not insure its assets, trusting the Royal Canadian Mint to protect them.

– The fund is structured separate from the Bank of Montreal so that its assets will not be vulnerable to claims by creditors against the bank.

– And — the amusing part — the fund seeks to eliminate “derivatives risk (i.e., the use of unallocated gold, gold certificates, exchange-traded products, derivatives, financial instruments, or any product that represents encumbered gold),” as well as “‘empty vault risk’ or gold bullion lending risk (i.e., the practice of the gold custodian lending, pledging, hypothecating, re-hypothecating, or otherwise encumbering any of the investors’ underlying gold bullion).”

Imagine — a bank warning against the shady practices in the gold market of other banks. While that’s something else that will never make the mainstream financial news organizations, at least the word is getting around anyway.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

Posted at 12:23 AM (CST) by & filed under JSMineset Premium Content.

Dear CIGAs,

Bill and I talk one on one for approximately one hour weekly to review all markets of interest on JSMineset Premium.

This week we were honored to have Yra Harris with us. Yra as you might know was my floor partner in Chicago during those great years of the first bull market in gold. Yra is, in my opinion, the only person in this business today that I believe is the equal of Bert Seligman, Jesse Livermore, or the modern master of the universe, Paul Volcker.

Not only is he the top intellect of the most complex economic theory, but he is a master trader who never fights with the market. He has both disciplines mastered. So much so that I believe he is the most capable person to conservatively run a central bank for the benefit of society rather than in league with the Brothers for their profit and society’s financial demise. His greatness comes also in the form of his never thinking about it.

He made a great point considering our Fed to be addicts to the theory of model driven. Chairperson Yellen is shocked this week to see her beloved and trusted models starting to fall on their face. This is not a glitch, but rather the end of days for the lifetime of models who always refuse to see major structural changes.

The major structural change involves the advent of globalization combined with the greatest bubble in this history of markets called broken national debt trading at zero to negative interest rates. that combination is nuclear in its potential.

The question now is what will the model addicts do when they start coming apart one by one. Algorithms are a form of structured model whose recent success for the models and algos have seen their best days. The largest of the market fiddlers using them made them appear omnipotent because they were just mammoth market bullies.

What comes next when both start to misfire badly?

That is simple. The answer is market dislocation to historical proportions with history making volatility beyond anyone’s worst nightmare before the wunderkins pull the plugs to their super computers out of the wall.

Posted at 10:47 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

With the great drive to break every vestige of secrecy, have you ever wondered why Grand Cayman has never been touched?

Panama Papers Show How Rich United States Clients Hid Millions Abroad

Over the years, William R. Ponsoldt had earned tens of millions of dollars building a string of successful companies. He had renovated apartment buildings in the New York City area. Bred Arabian horses. Run a yacht club in the Bahamas, a rock quarry in Michigan, an auto-parts company in Canada, even a multibillion-dollar hedge fund.

Now, as he neared retirement, Mr. Ponsoldt, of Jensen Beach, Fla., had a special request for Mossack Fonseca, a Panama-based law firm well placed in the world of offshore finance: How could he confidentially shift his money into overseas bank accounts and use them to buy real estate and move funds to his children?

“He is the manager of one of the richest hedge funds in the world,” a lawyer at Mossack Fonseca wrote when the firm was introduced to Mr. Ponsoldt in 2004. “Primary objective is to maintain the utmost confidentiality and ideally to open bank accounts without disclosing his name as a private person.”

In summary, the firm explained: “He needs asset protection schemes, which we are trying to sell him.”

Thus began a relationship that would last at least through 2015 as Mossack Fonseca managed eight shell companies and a foundation on the family’s behalf, moving at least $134 million through seven banks in six countries — little of which could be traced directly to Mr. Ponsoldt or his children.

These transactions and others like them for a stable of wealthy clients from the United States are outlined in extraordinary detail in the trove of internal Mossack Fonseca documents known as the Panama Papers. The materials were obtained by the German newspaper Süddeutsche Zeitung and the International Consortium of Investigative Journalists, and have now been shared with The New York Times.


Posted at 7:38 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- As Happy Economic Data Evaporate, Chances for an FOMC Rate Hike and Perpetual Fed Propping of the Dollar and Stocks Will Diminish
- Net of Downside Revisions to April, May Payrolls fell by 50,000 (-50,000), by More than the 35,000 Striking Telecommunication Workers; Full-Time Employment Dropped by 59,000 (-59,000)
- May 2016 Unemployment Rates Diverged: U.3 Fell from 5.0% to 4.7%, but U.6 Held at 9.7% and the ShadowStats-Alternate Rate Rose from 22.9% to 23.0%
- Plunge in the Headline Unemployment Rate Came from Unemployed Leaving the Labor Force, Not from Finding Jobs
- The Labor-Force Participation-Rate Measure Favored by Fed Chair Yellen Shifted Negatively to 62.6% in May, from 62.8% in April
- Despite Collapsing April 2016 Real Construction Spending, Broad Activity Continued in Low-Level, Stagnating Non-Recovery – Commerce Department Moved to Reduce the Trade Deficit and to Boost the Headline Economy by Redefining and Gussying-Up the Trade Surplus in the Otherwise Fluffy-Services Sector
- Hard Detail from the Real Merchandise Trade Sector Showed a Deeper Deficit and Weaker Economy in Revision
- Annual M3 Growth Jumped to 4.2% in May 2016, from 3.9% in April; M2 Jumped to 6.8% from 6.4%; M1 Surged to 8.7% from 6.2%

“No. 810: Labor Conditions, M3, Trade Deficit and Revisions, Construction Spending ”


Jim Sinclair’s Commentary

From our friend down under, Dismal Dave.

There seems to be a correlation between the intensity of the official attacks on gold and the severity of monetary crises.
–Hans F. Sennholz. (1922-2007)


Posted at 5:21 PM (CST) by & filed under In The News.

A ‘tsunami’ is about to overwhelm the debt market
By Bob Bryan

A tidal wave may be coming to the bond market, and it’s not going to be pretty.

At least that’s the view of Matthew Mish, credit strategist at UBS. To Mish, the elevated rates of default in the commodity sector and high risk bonds are a harbinger of things to come for the broader debt market.

“First, our quantitative framework is signaling a broader deterioration in the default outlook, with our model projecting default rates of 4.3% over the next 12 months (versus 2.6% one year prior),” Mish wrote in a note to clients on Thursday.

Mish’s research asks whether the recent uptick in default rates is simply a “rogue wave” that will dissipate or the “start of a tsunami” that will bring the rate of defaults much higher over the long term.

Mish is in the latter camp. He cites three short-term reasons for a coming increase in the number of firms unable to pay back their debt. They are:

1. Decreasing profits: Mish notes that corporate profits fell 7.6% in the first quarter against the same period a year ago. In order to pay back loans, companies need to continue to make more, and with less cash coming in, there will be less to allocate to debt.


Posted at 3:17 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

There are no victimless crimes in finance. The horror this is going to bring to many elders is simply so wrong. I would compare this to the crime of 2nd Degree Murder.

What a horror finance has become in the damned New Normal! I am sick thinking of the ramifications of this for so many.

Pensions may be cut to ‘virtually nothing’ for 407,000 people
by Katie Lobosco @KatieLobosco

One of the biggest private pension funds in the country is almost out of money, and fresh out of options.

The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said.

At that time, pension benefits for about 407,000 people could be reduced to “virtually nothing,” he told workers and retirees in a letter sent Friday.

In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers. The proposed cuts were steep, as much as 60% for some, but it wasn’t enough. Earlier this month, the Treasury Department rejected the plan because it found that it would not actually head off insolvency.

The fund could submit a new plan, but decided this week that there’s no other way to successfully save the fund and comply with the law. The cuts needed would be too severe.



Jim Sinclair’s Commentary

It is amazing that no one cares. The administration could not get their website to work.

Apparently they were also not able to get the health mechanism to work. What does that say for the Nation’s health under this system?

Thirteen of 23 Co-Ops Created Under Obamacare Have Failed
Ohio’s InHealth Mutual co-op is latest to fail after posting significant losses
BY: Ali Meyer
June 2, 2016 12:45 pm

Ohio’s InHealth Mutual co-op announced last week that it is going out of business, making it the 13th co-op to fail out of the 23 that were created under Obamacare.

The Ohio Department of Insurance asked to liquidate the company, saying that the company was in a “hazardous financial condition.” The co-op served nearly 22,000 consumers who now have 60 days to find another policy offered by another company on the federal exchange.

“Our examination of the company’s financials made it clear that the company’s losses would prevent it from paying future claims should its operations continue,” said Ohio Director of Insurance Lt. Gov. Mary Taylor. “Under Ohio law, we acted with certainty to protect the consumers.”

The company recorded an underwriting loss of $80 million in 2015 despite the $129 million in taxpayer-backed loans granted to the co-op by the federal government. InHealth Mutual was also placed under “enhanced oversight,” one of three tools the Department of Health and Human Services has to monitor co-ops in financial distress. When a co-op is placed under enhanced oversight, it means the company is consistently underperforming and allows the department to give detailed and more frequent reviews of the loan recipient’s operations and financial status.