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

Jim Sinclair’s Commentary

The latest from John Williams.

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

"No. 674: October Industrial Production"
Web-page: http://www.shadowstats.com

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

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

Industrial Production drops, missing notably.

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Worst auto production run since Jan 09

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

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

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

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

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

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

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

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

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

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

Submitted by Adam Taggart via Peak Prosperity,

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

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

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

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

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

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Jim Sinclair’s Commentary

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

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

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

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

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

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

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

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

Jim Sinclair’s Commentary

The latest from John Williams’ www.ShadowStats.com.

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

"No. 673: October Retail Sales, Consumer Liquidity, Updated Hyperinflation and DollarRisks"
Web-page: http://www.shadowstats.com

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

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

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

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

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

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

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

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David Stockman On Monetary Breakdown & Skyrocketing Gold

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

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

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

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

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

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

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

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

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

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

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

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

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

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and equity investors know it…

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Obama Said to Plan Moves to Shield 5 Million Immigrants
By MICHAEL D. SHEAR, JULIA PRESTON and ASHLEY PARKERNOV. 13, 2014

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

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

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

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

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

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

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

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

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

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

The enthusiasm is shared by forecasters as well.

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

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

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Spike in Russian military activity is about more than Ukraine

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

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

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

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

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

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

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Jim Sinclair’s Commentary

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

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

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

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

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

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

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

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

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

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

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

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

Standoff in Ukraine

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

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

Dear Mr. Sinclair,

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

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

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

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

Thank you again and all the best,
CIGA Alex M

Dear A,

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

Jim

 

Jim,

Einstein had a wonderful quote:

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

Perhaps the world’s Central Banks should take heed.

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

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

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

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

CIGA Wolfgang

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

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

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

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

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

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

Jim,

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

CIGA Richard V

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

From the FCA’s JPM notice:

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

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

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

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

From Reuters:

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

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Jim Sinclair’s Commentary

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

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

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

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

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

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

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

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

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

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

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

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

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

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November 11, 2014
Santiago, Chile

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

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

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

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

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

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

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

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

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

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

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

It’s amazing how much things have changed.

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

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

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

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

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

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

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

Until tomorrow,
Signature
Simon Black
Founder, SovereignMan.com

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

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

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

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

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

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Posted at 1:17 PM (CST) by & filed under In The News.

Gold and Silver Price Manipulation: The “Golden” Cat is Out of The Bag!
By Bill Holter
Global Research, November 11, 2014

Gold and silver price manipulation, "we" have talked and written about it for years.  I can still remember speaking two or three times a week with the late Harry Bingham back in 1997 and ’98 regarding this topic.  No matter what "event" popped up which logically and in the past should/would have pushed the price of gold higher, we would see waterfall action instead.  Then along came Bill Murphy and Chris Powell of GATA.  They put forth all sorts of anecdotal evidence, work by Frank Veneroso, James Turk and others which made the "manipulation picture" clearer.  Each piece along the way was added to the previous pieces and made it more clear "we were right".

http://www.zerohedge.com/news/2014-11-09/another-conspiracy-theory-bites-dust-ubs-settles-over-gold-rigging-many-more-banks-f

Of course, along the way there have been slurs and smears of GATA’s work and those of us who put the pieces together shedding light on the fact that gold and silver prices were manipulated.  I must say, it was quite a frustrating experience when often times there was obvious evidence to the 3rd grade mentalities out there yet supposedly "smart" people would just turn their noses up saying "that proves nothing".  Even the latest operation last Wednesday at 12:30 AM where one week’s worth of global gold production (40 tons) was sold in the tight window of and Indian holiday and Chinese/Japanese lunch break was "apologized away" as being "routine selling".  Yes, I will agree, it has "become routine" but in no way is it "right".  Selling that which does not exist is illegal, morally wrong and in this case aimed squarely at suppressing the price.  This is either "price fixing", or "collusion", both supposedly illegal.

  UBS has agreed to pay a fine without of course admitting any guilt.  It is said there are several other banks negotiating their own deals in London on this same issue.  So yes, the prices of gold and silver have in fact been manipulated unless you want to say UBS and the other banks are agreeing to pay their fines out of "nuisance" and just want it to go away.  I find the timing of this very interesting.  Is this action coming out of London in an effort to show the Chinese (G-20 and the rest of the world) they are cleaning up their act?  What about here in the U.S.?  Will the CFTC stand alone and look the other way finding "nothing actionable"?  As for the 40 tons "sold" last week, do you think the Germans might be thinking "hey, we want some of that, where’s our gold?  We asked for less than that for year one and only got 5 tons, was some (or all) of that 40 tons our gold?".

  In my opinion, London’s action of bringing this to light now is very significant.  Not just because of the BRICS and G-20 meeting but because it comes at a time when GOFO rates spiked negatively suggesting a very tight gold supply in London.  Are the British regulators trying to get out ahead of this?  Is it possible that the vaults are close to empty?  Based on what we know of Chinese and Indian imports the last few years, Western vaults have certainly been dented badly, maybe this move by the regulators is a "tell"?  We will soon know one way or the other!

  The UBS fine in my opinion is merely the tip of the iceberg and before this saga is over we will find out that gold and silver prices have been "locked" down in many other various ways.  We know about the "gold fix" being "fixed".  Now we know about UBS and LBMA dealings not being proper, the last straw will be COMEX in the "land of free and fair markets" but I wouldn’t hold my breath waiting for U.S. regulators.

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Jim Sinclair’s Commentary

A reaction to the thesis of sanctions.

Russia’s Central Bank to create alternative to SWIFT bank transaction system by mid-2015
November 11, 14:57 UTC+3

MOSCOW, November 11. /TASS/. Russia’s Central Bank plans to create a domestic alternative to the SWIFT international bank transaction system by May 2015, a Central Bank official said on Tuesday.

The Central Bank of Russia wants the national payment card system to operate along with the financial message system. The regulator also intends to create a SWFT message processing center, Deputy Director of the Central Bank’s National Payment System Department Ramilya Kanafina said.

The idea of creating a Russian alternative to the SWIFT international bank message system was put forward by Russia’s Union of Industrialists and Entrepreneurs and the Rossiya banking association in September.

Russia’s Finance Ministry published a bill at that time proposing regulation for the SWIFT system, as well as for the Bloomberg and Reuters financial market data terminals in the country.

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Anyone threatening US petrodollar is public enemy No.1
Published time: November 10, 2014 16:52

Last Soviet leader, Mikhail Gorbachev, said at the celebration of the fall of the Berlin Wall last weekend that we are facing a new Cold War. What are the geopolitical realities behind this statement?

This weekend I was invited onto RT to do an interview about the commemoration of the 25th anniversary of the fall of the Berlin Wall, particularly focusing on the speech delivered by the last Soviet leader, Mikhail Gorbachev, during his visit to Berlin.

I would like to expand on some of the topics I mentioned – how to encapsulate an alternative geopolitical perspective different from the Western orthodoxy in under four minutes? A task even Monty Python would find challenging!

The first issue was Gorbachev’s comments about a new Cold War. I would agree, and this is being fabricated by the USA, as that country always needs an Emmanuel Goldstein figure to justify its military-industrial complex that is bankrupting the country and brutalizing the world, while enriching the US oligarchs to the detriment of civil society everywhere.

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Petrodollar Panic? China Signs Currency Swap Deal With Qatar & Canada
Submitted by Tyler Durden on 11/10/2014 21:39 -0500

The march of global de-dollarization continues. In the last few days, China has signed direct currency agreements with Canada becoming North America’s first offshore RMB hub, which CBC reports analysts suggest "could double maybe even triple the level of Canadian trade between Canada and China," impacting the need for Dollars.But that is not the week’s biggest Petrodollar precariousness news, as The Examiner reports, anew chink in the petrodollar system was forged as China signed an agreement with Qatar to begin direct currency swaps between the two nations using the Yuan, and establishing the foundation for new direct trade with the OPEC nation in the very heart of the petrodollar system. As Simon Black warns, "It’s happening… with increasing speed and frequency."

As CBC reports,

Authorized by China’s central bank, the deal will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the middle man — in most cases, the U.S. dollar.

Canadian exporters forced to use the American currency to do business in China are faced with higher currency exchange costs and longer waits to close deals.

"It’s something the prime minister has been talking about. He wants Canadian companies, particularly small- and medium-sized businesses, doing more and more work in China, selling goods and services there," said CBC’s Catherine Cullen, reporting from Beijing.

Sovereign Man’s Simon Black has some ominous thoughts on Canada’s move…

It’s happening. With increasing speed and frequency.

The People’s Bank of China and the Canadian Prime Minister’s office issued a statement on Saturday stating that Canada will establish North America’s first offshore renminbi trading center in Toronto.

China and Canada agreed on a number of measures to increase the use of renminbi in trade, business, and investment. And they further signed a 200-billion renminbi bilateral currency swap agreement.

Moreover, just today, hot off the presses, the central banks of China and Malaysia announced the establishment of renminbi clearing arrangements in Kuala Lumpur, which will further increase the use of renminbi in South-East Asia.

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Jim Sinclair’s Commentary

For at least part of one day.

U.S. Mint plans to restart silver coin sales on Nov. 17
Mon Nov 10, 2014 9:29pm GMT

NEW YORK Nov 10 (Reuters) – The U.S. Mint said on Monday it expects to restart sales of American Eagle silver bullion coins on an allocation basis from Nov. 17.

The Mint suspended sales on Nov. 5 after running out of coins after a market rout pushed prices to 4-1/2-year lows, unleashing a flurry of retail buying.

In a statement to its biggest U.S. coin wholesalers, the Mint said it expects to have over 1 million 2014-dated silver coins available when they go back on sale.

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Jim Sinclair’s Commentary

Pay to play is the hallmark of the New Normal

More Bank Settlements Coming in Widening Currency Case
By Ben Protess and Jenny Anderson
November 10, 2014 9:00 pm

As authorities in the United States and Britain ready actions this week against giant banks suspected of manipulating the foreign currency market, both the number of government agencies involved and the cost of settling the cases continues to grow.

The banks learned on Monday that the Commodity Futures Trading Commission in Washington was planning to announce its own settlements in the case, according to people briefed on the matter. That ended weeks of suspense over whether the agency would act in coordination with British authorities and American banking regulators. The agency is expected to level around $300 million in fines against each of the banks, the people said, with the worst offenders paying slightly more and marginal players somewhat less.

The trading commission, the Financial Conduct Authority of Britain and the Office of the Comptroller of the Currency in Washington are planning to announce settlements early on Wednesday.

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Now ISIS wants to introduce its own currency: Plans to bring back solid gold and silver dinar coins announced in Iraqi mosques
By Emma Glanfield for MailOnline
Published: 15:42 EST, 10 November 2014 | Updated: 08:00 EST, 11 November 2014

ISIS wants to introduce its own currency and plans to bring back solid gold and silver dinar coins, it has emerged.

The Middle East terror group apparently wants to introduce its own Islamic currency as part of its attempts to solidify its makeshift caliphate.

Militants are said to want to bring back the original dinar, which is an ancient currency from early Islam, and religious figures in Mosul and Iraq’s Nineveh province have apparently announced its return in mosques.

ISIS apparently wants to introduce its own currency and plans to bring back gold and silver dinar coins (above)

The currency known as the dinar, which once consisted purely of gold and silver coins, is today used by a variety of countries, but the coins are created from different materials to the originals.

However, the jihadi group is understood to be planning to return to the original gold and silver coins, which were first introduced during the Caliphate of Uthman in 634 CE.

The original Islamic dinar was a gold coin which was the weight of gold equivalent to 4.3 grams. Its silver counterpart, known as the Islamic dirham, was a silver coin equal in weight to 3 grams of silver.

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Jim Sinclair’s Commentary

More sanction fallout.

Russia-India aircraft cooperation develops towards joint projects — corporation president
November 11, 17:48 UTC+3

ZHUHAI, November 11. /TASS/. Russian-Indian aircraft cooperation develops towards joint projects, president of Russia’s United Aircraft Building Corporation Mikhail Pogosyan said on Tuesday.

“The projects of a fifth generation fighter jet and a military transport plane reflect our strategy on creating present-day high-tech products in cooperation with our partners,” Pogosyan said.

Under these two programs, a preliminary stage for formulating requirements towards jets and designing its image is completed to start major design works. “Both programs are considered priority for cooperation with India,” he said.

It is rather difficult to determine the completion date. “There are several issues related to the organization of the work, the terms, the cost and technical details. This requires certain time and the corresponding coordination procedure at the level of governments of both countries,” Pogosyan said.

He noted the success of licensed production of the Su-30MKI in India. “In general, the program of licensed production of the aircraft develops successfully,” Pogosyan said.

The Chinese city of Zhuhai, Guangdong Province, hosts a major international air show China 2014. More than 700 companies, 45% of which are foreign are participating in the air show. More than 120 jets and helicopters are put on display at static exposition. Russia presents around 300 exhibits of military products, including 21 life-size models.

The international air show is held once in two years since 1996. This year the air show will close on November 16.

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Russell – Critical Moment For Gold, Stocks, Dollar & The World

With historic patterns unfolding in global markets, the Godfather of newsletter writers, 90-year old Richard Russell, writes about the big picture for gold, stocks, the U.S. dollar, and an eventual collapse.  The 60-year market veteran also included two fantastic charts to go along with his outstanding commentary.

Russell:  “Below you see the ratio GDX to GLD (gold). The chart shows that the gold miners are now at the lowest level in the past 10 years compared to gold. This tells me that the miners are so cheap and hated and out of favor that many can be bought as perpetual warrants. The key to the whole gold picture may be when this ratio turns up and crosses above its red 200-day moving average. In the meantime, we wait and patiently watch. At this point, I’m wondering whether the ratio that you see on the chart is in the process of building a bottom.

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Below is a 10-year chart of Newmont Mining. The stock hit an important low in 2009. Newmont appears to be consolidating above its 2009 low. Here again, I’m watching to see whether Newmont can reverse itself and break out above its consolidation formation.
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Posted at 1:11 PM (CST) by & filed under Jim's Mailbox.

Jim,

As you dig deeper into the financial circumstances in the US, you find that things are certainly not very rosy for the lower classes.

CIGA Larry

U.S. Lags Behind G-7 in Bank Accounts as Poor Can’t Build Assets
By Jeanna Smialek  Nov 11, 2014 9:47 AM ET 

Marissa Austin Tobin has lived most of her 37 years without a bank account.

“I was irresponsible,” said Austin Tobin, who lives in Louisville, Kentucky. “I would pay my bills, but I would just spend the rest of my money.”

She needed to establish a financial history to qualify for a loan to start a catering business, so Austin Tobin opened accounts this year under a “Fresh Start” banking program that aims to help those who had mismanaged finances. Her savings, while still limited at about $500, are growing.

That’s not the case for some lower-income households as the world’s largest economy lags behind other developed nations in banking participation. The share of the U.S. population 25 and older with a savings or checking account was 91 percent in 2011, lower than any other Group of Seven nation except Italy, based on the latest available World Bank data. That compares with 98 percent in Canada and the U.K. and 99 percent in Australia.

A less inclusive financial system cuts into people’s ability to prove creditworthiness and build assets, making it more difficult for households to get ahead. The costs of alternatives, including check-cashing operators, payday lenders and nonbank money-order suppliers, often borne by those without accounts, also exacerbate wealth inequality.

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Jim,

This result will help give courage to the gold initiative that the Swiss vote on the end of November. The status quo central planners will be pushed further and further by the people want to control of their life and assets.

CIGA Larry

Catalan Voters Tell Madrid to Back Down
45 Nov 10, 2014 8:07 AM EST
By Leonid Bershidsky

Spanish Justice Minister Rafael Catala may have grounds to declare that yesterday’s nonbinding independence vote in Catalonia was “an act of pure propaganda that only served to exacerbate divisions among Catalans.” Yet in the face of such open contempt from the Madrid government, support for Catalan independence keeps growing.

The outcome of the poll was ambiguous for secessionists. Some 2.24 million people voted, 80.7 percent of them for full independence, another 10 percent for considering Catalonia a state but within Spain, and 4.5 percent against even the idea of statehood. That puts the number of secession supporters at only a third of the 5.4 million people estimated (by the Catalan government) to be eligible to vote. Because this poll was nonbinding, voters weren’t fully confronting the reality of splitting off from one of the world’s major nations and a key European Union member.

And as in Scotland, the spiral of silence phenomenon probably pushed people to back independence. As Susana Beltran, a member of anti-secession Catalan Civil Society, explained, "People who don’t want this are afraid to speak out. They don’t want problems with their friends, with their jobs, in life in general.”

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Jim,

Anyone want to take a jab at this one? Let’s see how this is reported in the MSM. Talk about STRANGE!

CIGA David

ISIS Going Back To The "Gold Standard"
Submitted by Tyler Durden on 11/11/2014 – 10:00

It appears the terrorist organization known as Islamic State has been watching the fiasco of fiat money and reading Alan Greenspan and Ron Paul. As The Daily Mail reports, ISIS wants to introduce its own currency and plans to bring back solid gold and silver dinar coins in an attempt to solidify its makeshift caliphate. Around 1500 years after the Dinar was first introduced – made from pure gold and silver – ISIS plans to implement the change within a few weeks, changing changing from regular dinars and Lira to golden dinars and silver dirhams.

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