Posted at 3:00 PM (CST) by & filed under In The News.

3.9% GDP Nonsense-Dollar Turns Sharply Soon-John Williams
By Greg Hunter On December 3, 2014

Economist John Williams is not buying the recent 3.9% GDP upward revision. Williams explains, “No one I know thinks we are growing at 3.9% other than they are trying to sell a bill of goods to the markets, specifically the currency markets. 3.9% is nonsense. You had 4.6% growth in the second quarter and 3.9% in the third.  Here you had two quarters at close to 4%, and we have not seen anything like that since 2003.  This is the strongest economy we have seen in 11 years, and I can tell you Main Street USA is not seeing that. . . . If you understate inflation, which the government does, you overstate inflation adjusted growth, and that is probably the biggest problem in the GDP report.”

Recently, the U.S. deficit passed the $18 trillion mark, but using honest accounting, Williams says the debt picture is much worse, “Using generally accepted accounting principles with expenses and obligations, what you are seeing is the actual deficit. Instead of being half a trillion dollars last year, it was more like $6 trillion in the same length of time.  The gross federal debt right now is $18 trillion.  If you add on the unfunded liabilities such as Social Security and Medicare, you are approaching $100 trillion in terms of total federal obligation.  There is just no way that can be covered. . . . The government, long term, is bankrupt.”

That brings us to the U.S. dollar. Williams says, “Right now, we have a big distortion in the market, and that is the strength of the U.S. dollar. I contend the dollar should be getting much weaker, and indeed it’s going to turn very sharply very soon, and that will be an approximate trigger for a major upturn in inflation. The reason the dollar is strong right now . . . the U.S. economy is booming, if you believe the statistics.  Main Street USA doesn’t believe the statistics.  The rest of the world is in recession, and guess what?  We’re in recession too.  We’re just not reporting the numbers as accurately as the rest of the world.”

Williams has revised and pushed back his hyperinflation forecast to begin in 2015 and not this year. Williams, now, expects a big upturn in the price of gold and oil next year.  Williams explains, “The issue remains the dollar.  What is distorted in the system right now is the dollar’s strength.  It’s the strongest it’s been in some time.  It’s over stated for multiple reasons ranging from outright manipulation to overstatement of economic growth and other games that have been played.  That’s going to reverse shortly.  As the dollar sells off, you will see inflation pick up.  Part of the reason why oil is where it is now and part of the reason why gold is where it is now is because of the dollar’s strength.”

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Jim Sinclair’s Commentary

This speaks to reducing their dependency on the petro dollar.

Russia ready to continue talks with Austria, Hungary, Serbia on South Stream — envoy
December 03, 20:44 UTC+3

MOSCOW, December 3. /TASS/. Russia is ready to continue talks with Austria, Hungary and Serbia on ways out of the situation that developed as a result of the closure of the South Stream project, Russia’s Ambassador to the European Union Vladimir Chizhov said Wednesday.

“The Russian side is ready to discuss what to do next and how to overcome the situation,” Chizhov said on Rossiya 24 TV channel. “The gas pipeline thread may go in any direction from the Turkish hub.”

Russia halts South Stream project

In the current condutions, Russia cannot begin the implementation of the South Stream project, Russian President Vladimir Putin said on Monday, December 1.

“Bearing in mind the fact that we have not yet received Bulgaria’s permission, we think Russia is such conditions cannot continue this project. I mean we are to begin the construction of the pipeline system in the Black Sea. We cannot begin the construction of the seabed section until we have Bulgaria’s permit,” Putin told a news conference in Ankara.

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Here’s what will get your TFSA audited by the Canada Revenue Agency
Garry Marr | December 2, 2014 | Last Updated: Dec 2 8:15 AM ET

The Canada Revenue Agency has an audit project targeting Canadians it feels are in the business of trading securities and using their tax free savings accounts to shelter the proceeds.

To determine whether something is operating as a business, the CRA typically weighs eight factors, legal sources say. And although none of the eight factors listed below may be sufficient on its own, a combination of them can lead to an audit, tax and legal experts suggest.

Ultimately, the CRA can say a taxpayer has broken the rules on a balance of probabilities and it’s up to the person to prove otherwise.

The eight factors are:

• Frequency of transactions — a history of extensive buying and selling of securities or of a quick turnover of properties

• Period of ownership — securities are usually owned only for a short period of time

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Liberty Dollar founder avoids imprisonment in sentencing
Chris Powell|
Tuesday, December 2nd

Dear Friend of GATA and Gold:

We have it only through a reliable intermediary that Liberty Dollar founder Bernard von Not Haus, convicted rather strangely almost four years ago of counterfeiting for issuing silver coins worth more than the originals they were supposed to be imitating, received a lenient sentence today from Judge Richard Voorhees in U.S. District Court for the Western District of North Carolina — six months of home confinement and three years of probation.

It’s said that the judge observed that von Not Haus’ motivation with the Liberty Dollar was philosophical rather than criminal. It’s also said that the judge ordered the federal government to return to its owners the millions of dollars of metal held by Liberty Dollar for its clients.

A lawyer representing GATA appeared in court today to argue for leniency for von Not Haus.

More as it becomes available.

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

Join GATA here:

Mines and Money London
Business Design Centre
London, England, U.K.
Monday-Friday, December 1-5, 2014

http://www.minesandmoney.com/london/

More…

American, Georgian & Lithuanian get key jobs in Ukraine’s new govt
Published time: December 02, 2014 22:49
Edited time: December 03, 2014 11:45

The natives of the US, Georgia and Lithuania were hastily granted Ukrainian citizenship in order to become key ministers in the new government of Ukraine, which was approved by the country’s parliament on Tuesday.

President Poroshenko has also announced he will sign a decree to grant citizenship to foreigners fighting on Kiev’s side in the east of the country.

Natalie Jaresko of the US, who currently heads the Kiev-based Horizon Capital investment fund, will take reigns at the Ukrainian Finance Ministry.

In 1992-1995, Jaresko served as the first Chief of the Economic Section of the US Embassy in Ukraine.

Before that she occupied several economic positions in the US State Department, according to Horizon Capital website.

The position of health minister went to Aleksandr Kvitashvili, who occupied a similar post in the Georgian government in 2009-2012.

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Accident at largest nuclear power plant in Europe revealed by Ukraine PM
Published time: December 03, 2014 11:15  
Edited time: December 03, 2014 14:22

There has been an accident at a nuclear plant in the southeast of Ukraine, Prime Minister Arseny Yatsenyuk has revealed during the first session of his new Cabinet.

A minor accident occurred at Zaporozhskaya nuclear plant, the largest in Europe, last Friday, according to the facility’s website. A reactor was switched off and put to maintenance as a result.

The incident was not made public until Wednesday, when PM Yatsenyuk asked the energy minister to report on what happened and how the ministry is handling the situation.

Ukraine’s energy minister, Vladimir Demchyshyn, said that the accident posed no risk.

"There is no threat … there are no problems with the reactors," Demchyshyn said at briefing, adding the accident affected the power output system and "in no way" was linked to power production itself.

Demchyshyn said that the reactor would be restarted December 5.

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ISM Services Surges To 4th Highest On Record (As Services PMI Plummets)
Submitted by Tyler Durden on 12/03/2014 10:08 -0500

On the heels of 5 months of weakness in Services PMI, and 2 months of weakness in ISM Services, it only makes sense that ISM’s Services print would massively beat expectations at 59.3 (against 57.5). All ISM subindices rose – apart from employment (which dropped to 4 months lows)! Just 15 minutes after one survey indicates a drastic slowdown in domestic demand for services, another one says it has almost never been better…

Huge beat in ISM Services…

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What a difference 15 minutes makes…

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Here is the full breakdown of the components: magically, and totally unlike that "other" ISM, virtually everything improved except for employment, which as we now know, has been improving purely due to lower wages, something which in an objective world would impact manufacturing survey responses, if not in a goalseeked new normal.

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This is what a selection of cherrypicked responses had to say:

· "Business is good with new technology and products." (Information)

· "General uptick in demand/spending." (Finance & Insurance)

· "We are experiencing downward pricing pressures on the price of natural gas as a result of the lower energy prices being driven by OPEC’s lower oil prices." (Mining)

· "Food cost continues to be a challenge due to cost of goods increases. Beef, produce and turkey markets remain high. Chicken, pork and eggs, although year-over-year are higher; prices have fallen from one month ago." (Accommodation & Food Services)

· "Business is strong. Many new accounts want to be implemented before year-end so cost reductions can be included." (Professional, Scientific & Technical Services)

· "We are looking forward to a strong holiday season." (Retail Trade)

· "We are still seeing continued momentum month-over-month with the strongest area being government accounts." (Wholesale Trade)

Perhaps the only informative datapoint is that the saline IV solution shortage which started almost a year ago (as we reported previously) continues:

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B-Dud Explains The Fed’s Economic Coup—-Or Why Every Asset Price Is Manipulated
by David Stockman • December 3, 2014

Keynesian economists are annoying enough when they are pitching inflated financial assets on Wall Street or the supposed curative powers of fiscal deficits on Capitol Hill. But they become positively dangerous when they populate the Eccles Building and usurp control of the nation’s capital and money markets lock, stock and barrel in the name of “monetary accommodation”.

Needless to say, the Fed is presently over-run with Keynesian money printers led by Janet Yellen and Stanley Fischer. Both of these famous PhDs are actually proponents of a primitive macroeconomic doctrine that should be called “bathtub economics”.  In their wisdom, these doctors of economics have simply postulated that the nation’s economic output “should” be at aggregate levels which far exceed current production, and that the resulting shortfall from “potential” output, incomes and jobs is due to insufficient “aggregate demand”.

This purported “output gap” is conveniently self-serving. It has been interpreted to mean that the Fed has a plenary mission to fill-up the nation’s economic bathtub by generating sufficient incremental aggregate demand to off-set the shortfall. This demand plugging function, in turn, is to be accomplished by the constant intervention of the Fed’s open market desk into money and capital markets. So doing, it is empowered to manipulate, massage, twist, bend and pump any financial variable that in its wisdom is deemed to influence the transmission of its monetary policy (i.e.”aggregate demand” stimulus) into the real economy.

Except this is all a fiction. There is no such economic ether called “aggregate demand”; it is an utterly artificial construct of Keynesian economic models. What actually exists out in the real main street economy is nothing more than the total spending by households and businesses; and the latter does not pre-exist as an independent variable. Instead, it is derived from either current income or from incremental borrowing—that is, extending the pre-existing leverage ratio of business and household balance sheets to steadily higher levels.

But here’s the thing. The Fed can do only do two concrete things to influence these income and credit sources of spending—–both of which are unsustainable, dangerous and an assault on free market capitalism’s capacity to generate growth and wealth. It can induce households to consume a higher fraction of current income by radically suppressing interest rates on liquid savings. And it can inject reserves into the financial system to induce higher levels of credit creation.

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

Jim,

Another Central Banker saying the same dumb thing as Dudley! Spending X less on gas and X more on other things, doesn’t equal more economic growth. It’s a circular notion.

"Sharply lower oil prices will boost spending and aid U.S. growth", Fischer stated in a mind-blowingly naive speech for the 2nd-most-important-monetary-policy-maker-in-the-world.

Where do we grow these guys?

CIGA Wolfgang

Fed Fischer’s Complete & Bizarre Nonsense: Oil Price Collapse "MakingEverybody Better Off"
Submitted by Tyler Durden on 12/02/2014 – 13:19

"I’m not very worried," explains Fed Vice Chairman Stan Fischer in a very Bernanke-"contained"-like nonchalence about the total collapse of oil prices (and US oil producer stocks). Sharply lower oil prices will boost spending and aid U.S. growth, Fischer stated in a mind-blowingly naive speech for the 2nd-most-important-monetary-policy-maker-in-the-world, adding that lower oil prices were "a phenomenon that’s making everybody better off." We don’t understand his ignorance: as we noted earlier, Fischer is talking about money that would otherwise also have been spent, only on gas. There is no additional money, so where’s the boost? This is just complete and bizarre nonsense.

More…

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

With Its Gold "Vaporized", A Furious Ukraine Turns On Its Central Bankers
Submitted by Tyler Durden on 12/02/2014 – 11:29

As reported two weeks ago, following to a stunning announcement by the head of Ukraine’s central bank, Valeriya Gontareva, we learned that (virtually) all of Ukraine’s gold was gone, or – in the parlance of Jon Corzine – had "vaporized." And as we also predicted two weeks ago, it was only a matter of time before Ukraine’s people – the vast majority of whom are innocent pawns in a vast game of realpolitik between the west and east – finally got angry and demanded some answers. That time came earlier today when as Interfax.ua reported "a Kyiv-based court has instructed Kyiv prosecutors to bring an action against National Bank of Ukraine (NBU) Governor Valeriya Gontareva on charges of abuse of power or misuse of office to obtain illegal profit, the Vesti newspaper reported on Tuesday."

According to Interfax, "This decision was taken by Kyiv’s Pechersk district court on December 1 after it had examined case No. 757/33660/14. It ordered the Kyiv prosecutor’s office to launch an investigation and include it in the register of pre-trial investigations," the newspaper reported.

Gontareva is charged with abuse of power or misuse of office under Article 364 of the Criminal Code of Ukraine.

The plaintiff is lawyer Rostyslav Kravets, the newspaper said. He confirmed this information in his post on Facebook, saying that the decision was taken by the court at the third attempt, and in November 2014, the prosecutors declined to bring an action to meet his claim.

The charges against the chief banker involve foreign currency interventions by the Central Bank in August 2014: On August 5 the NBU bought U.S. dollars on the interbank forex market for UAH 11.93 per U.S. dollar and sold them for UAH 12.26 per U.S. dollar. During the same week, on August 8, it traded in foreign currency at a higher rate: UAH 12.45-12.6 per U.S. dollar. First it sold $69 million on the interbank forex market at a lower rate, and some days later it bought $35 million at a more favorable price.

As a result of these transactions, the NBU lost 19 kopecks per U.S. dollar, Kravets said.

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After Abysmal Thanksgiving Spending, Cyber Monday Is Latest Dud, Rising Less Than Half 2013 Pace
Submitted by Tyler Durden on 12/02/2014 08:03 -0500

Prepare to hear much more of the "retail spending slowed down because the economy is just too strong" excuses today, used most hilariously by the NRF on Sunday to explain the unprecedented 11% collapse in the 2014 4-day holiday weekend spend, when pundits "justify" why Cyber Monday sales were only the latest proof the US consumer – that 70% driver of US GDP – is being crushed day after day, pardon, basking in the warm glow of America’s centrally-planned golden age.

Here are the facts: Internet holiday shopping rose only 8.1% on Cyber Monday yesterday, usually the busiest day for Web shopping as people return to their desks after the U.S. Thanksgiving holiday weekend. This was a big miss to expectations, and is less than half then growth posted just last year, when online sales grew at 17.5%, according to IBM.

Enter the spin doctors:

… Cyber Monday sales growth is slowing as consumers embrace the convenience of online shopping, spreading out their purchases instead of being lured by one-day specials.

… The declining pace of growth reflects an earlier start to the year-end shopping season, with Amazon.com Inc. and other online retailers offering online deals a week before Black Friday, when stores traditionally began offering holiday discounts.

… “We’re still getting really strong growth on Black Friday and Cyber Monday, but people are realizing it’s a season of shopping,” Soren Mills, chief marketing officer at Newegg Inc., an online electronics retailer. “We’re releasing new deals all the time. We refresh constantly and bring in new deals to keep the excitement there. People are turning it from a day-long occasion to a monthlong occasion.”

… “Consumers are definitely shopping earlier,” said Scot Wingo, ChannelAdvisor’s chief executive officer. “Thanksgiving eats into Black Friday, and Saturday and Sunday are eating into Cyber Monday.”

But nothing compares to:

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Posted at 6:26 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The physical market for silver and gold may have spoken today.

BREAKING: Significant Drawdown Of U.K. Silver Inventories Due To Record Indian Demand
by SRSrocco on November 24, 2014

  There was a huge development reported in the silver market last week and how did the precious metal community respond?  They basically ignored it.  Go figure.  So, I will try again to get the word out by presenting it in a different fashion.

Indian silver demand was so strong this year, that it produced a significant drawdown of U.K. silver inventories.  Matter-a-fact, India had to access silver from China and Russia because available supplies from the U.K. were not sufficient.

According to GFMS Silver Interim Report released on Nov 18th:

Meanwhile demand for silver bars and coins has soared in recent weeks as bargain hunting retail investors returned to the silver market after a disappointing first half of the year. Nowhere is this more evident than in India where imports of silver are up by 14% year-on-year for the January to October period and set for an annual record. With imports in the first ten months totalling a massive 169 Moz many vaults in the UK, traditionally the largest supplier to India, have seen significant drawdowns, leading to more supply flowing from China and Russia.

As you can see from GFMS statement, they even included the word “Massive” to describe the demand coming from India.  I emailed Andrew Leyland, GFMS silver analyst and author of the report, to see if he could put some figures behind the declining U.K. silver inventories.  He was nice enough to respond today by stating the following:

The LBMA itself doesn’t hold any silver stocks, but its member companies do. These stocks may be unallocated or allocated (often allocated to ETF holdings) and GFMS survey these stock levels once a year ahead of the silver survey in May.

What we’ve heard so far in 2014 has been anecdotal, that there have been large drawdowns in the UK of unallocated material. This has been backed up by trade data that has seen India increasingly buying from China and Russia while the UK (as the traditional lead supplier to India) has lost market share. While we can’t quantify the drawdown or stock level at this point we thought it worth mentioning the trend. In addition, for the silver survey, we’ll be trying to survey how much material from European bullion stocks is allocated. Silver ETFs holdings have been robust, in comparison to gold, and this could effectively limit available inventory to the silver market moving forward.

Unfortunately, Mr. Leyland could not provide any actual figures, but to state that there have been“LARGE DRAWDOWNS” from U.K. silver inventories is a big issue for the silver market.  As stated, U.K. was India’s “traditional lead supplier” of silver.  Why the big change?  Why did India need to resort to acquiring silver metal from China and Russia if the low paper price signifies a SURPLUS???

Another interesting item Mr. Leyland stated in the response was that this U.K. silver metal was from “unallocated material.”  Furthermore, he commented that “Silver ETF holdings have been robust, which could effectively limit silver inventory to the silver market moving forward.”

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It Wasn’t The Swiss: Continuing Plunge In GOFO Means No Easing Of Worst Gold Shortage In Over A Decade 
Submitted by Tyler Durden on 12/01/2014 10:43 -0500

Yesterday, when we commented on what was largely a pre-determined outcome of the Swiss gold referendum, we said that there still "is the question of what happens to the tension in the gold swap market: as noted last week, the 1 Month GOFO rate had tumbled to the most negative in over a decade. It was not clear if this collateral gold squeeze was the result of Swiss referendum overhang or due to other reasons. The market’s reaction on Monday should answer those questions."

Well, a few hours ago we got the GOFO update for the "day after" and the answer is clear: it wasn’t fear of the Swiss referendum after all because the 1 Month GOFO just crashed even deeper into negative territory with the entire curve through 6M now red, and with 12 month GOFO just 0.6 bps away from negative for the first time. At this rate, tomorrow’s update will suggest that big institutions expect the gold swap shortage to persist through the end of 2015!

Also, judging by the gold reaction, which is about $50 from the overnight lows, someone else appears to have noticed that the rather shocking shortage of synthetic gold among institutions, which is finally seeping through into that whole "price discovery" process, where supply and demand actually matter.

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Bottom line: whatever caused the record scramble for rehypothecated gold, it wasn’t fears about the outcome of the Swiss referendum. Something else spooked the precious metal a month ago, and as seen on the chart above, things have only gotten progressively worse since then.

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Jim Sinclair’s Commentary

This is not just slowing down. Unless energy makes a very significant immediate recovery fracking is history.

Big oil will fear throwing big money at it. The junk bond holders that have financed fracking had a spiritual experience in the last two weeks.

EXCLUSIVE-October oil shale permits drop: is the slowdown here?
Edward McAllister

NEW YORK, Dec 1 (Reuters) – U.S. oil producers have been racing full-speed ahead to drill new shale wells in recent years, even in the face of lower oil prices. But new data suggests that the much-anticipated slowdown in shale country may have finally arrived.

Permits for new wells dropped 15 percent across 12 major shale formations last month, according to exclusive information provided to Reuters by DrillingInfo, an industry data firm, offering the first sign of a slowdown in a drilling frenzy that has seen permits double since last November.

The Organization of Petroleum Exporting Countries last week agreed to maintain its production quota of 30 million-barrels-per-day, despite a 30 percent drop in oil prices since June, triggering an additional 10 percent decline. That move, many analysts believe, was squarely aimed at U.S. oil producers driving the country’s energy resurgence: can they continue drilling at the current pace if prices don’t rise?

"Currently, the market is focused on U.S. shale as the place where spending and production must be curtailed," Roger Read, a Wells Fargo analyst, said in a note Friday. "There is little doubt, in our view, that lower oil and gas prices will result in lower spending and lower shale production in 2015 to 2017."

A cutback of U.S. production could play into the hands of Saudi Arabia, which has suggested over the past few months that it is comfortable with much lower oil prices.

Most analysts predict U.S. oil producers can maintain their healthy production rates in the first half of 2015 – thanks in part to investments made months ago.

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Silver Soars 17% From Intraday Lows: Biggest Swing On Record; Gold Tops $1210 (+$70 Off Lows)
Submitted by Tyler Durden on 12/01/2014 12:56 -0500

Silver is up over 17% from its intraday lows today – this is the biggest positive swing since our data began. All the previous major swings have been downshifts, most recently in September 2011 (-22% and -18% over 2 days). Volume is very high also. Gold is back above $1,210,up over $70 from its intraday lows…

The biggest intraday positive swing on record… ($16.82 is next test for SIlver at 50DMA)

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And gold and silver are exploding… (gold has broken above its 50DMA at $1205)

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Jim Sinclair’s Commentary

Too much QE or MD can hurt.

Moody’s Downgrades Japan’s Credit Rating
Firm Cites Concern Over Delay in Sales Tax Increase
By Eleanor Warnock And Kosaku Narioka
Updated Dec. 1, 2014 8:04 a.m. ET

TOKYO— Moody’s Investors Service downgraded Japan’s credit rating Monday, highlighting the challenges facing Prime Minister Shinzo Abe as he tries to stoke inflation and growth.

In explaining its move, Moody’s cited heightened uncertainty over Japan’s ability to cut its fiscal deficit after Mr. Abe decided last month to delay an increase in the national sales tax scheduled to take effect next year.

The difficulty of the balancing act facing the Japanese government—fueling growth while acting with fiscal responsibility—was reflected in the lower rating, Thomas Byrne, senior vice president of the sovereign risk group at Moody’s, told reporters in Tokyo after the announcement.

“The government has to in effect put one foot on the brake and another on the accelerator,” he said.

Moody’s acknowledged that delaying the tax increase “could have merit” if growth and tax revenues rise as a consequence, but said a second factor in its downgrade was uncertainty over whether the government’s growth policies would work in the medium term.

The tax decision also poses risks to Japan’s ability to continue to finance its debt in the future, Moody’s said in a statement.

It downgraded Japan’s debt by one notch to A1 from Aa3, the same rating it has assigned to Israel and the Czech Republic. It was the first downgrade of Japan by a major rating company since 2012, and the first by Moody’s since 2011.

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Posted at 6:21 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Subject: "…National Retail Federation, the traditionally cheery industry organization, which just reported absolutely abysmal numbers: sales during the four-day Thanksgiving holiday period crashed by a whopping 11% from $57.4 billion to $50.9 billion, confirming what everyone but the Fed knows by now: the US middle class is being obliterated, and that key driver of 70% of US economic growth is in the worst shape it has been since the Lehman collapse, courtesy of 6 years of Fed’s ruinous central planning."

CIGA Blair

Dear Blair,

This is part of the Great Leveling which precedes the Great Reset.

Respectfully yours,
Jim

 

Jim,

The market is filled with fools. It appears the battle for truth and justice has begun. We all know that the central banks worldwide have been scooping up gold all year.

Now that it was slammed last night based on the Swiss Referendum failure, it’s obvious that the central banks would take advantage of the cheap prices and buy all they can.

Let’s see now, paper gold pushing prices down, real buying of physical taking advantage of this, who will win?

It doesn’t take an expert to figure that one out.

Eventually paper must deliver at ANY cost.

In the children’s game: Rock, Paper, Scissors… Paper covers Rock and wins.

However, eventually Scissors cuts Paper and releases the Rock (gold).

Just a matter of time.

CIGA Wolfgang

What A Night
Monday December 01, 2014 08:06
By Peter Hug Global Trading Director Kitco Metals Inc.

If you weren’t watching last night, you would assume the metals are opening somewhat unchanged this morning. After the Swiss referendum came in with a ‘no’ vote, the market was ready to pull the trigger at the Asian open, with silver moving from $15.55 to a print of $14.20 in the first hour of trading while gold shed some $20 in extremely volatile trading.

Posted at 9:11 AM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

Another offense against the Petro dollar.

Russia-Iran ‘oil for goods’ program to launch soon – minister
Published time: December 01, 2014 07:26 
Edited time: December 01, 2014 07:59

Deliveries of Russian goods in exchange for Iranian oil will begin soon, according to Russia’s minister of economic development. He says the two countries are also working on a plan to trade in national currencies.

Aleksey Ulyukayev said grain is a primary commodity, while other goods on the list are being negotiated.

“We can export a big volume of our non-raw materials exports, such as equipment for the oil and gas industry, agricultural machinery, motor vehicles, aircraft, railway cars, power machines, electricity generators,” he said. “Russia can receive a serious portfolio of orders for machine-building, for industries with high added value.”

Another aspect of Russia-Iran relations would extend to switching mutual payments in national currencies in the future.

"Mechanisms of using national currencies in mutual relations [between Russia and Iran]… that involve lending in national currencies and using contracts in national currencies should be established. The central banks [of both countries] should focus on this, and they have already started working on it,"Ulyukayev said, adding that the terms are not determined yet.

Also, Russia said that it will be assisting Iran with its application to join the World Trade Organization (WTO), according to a joint Russia-Iran memorandum released on Sunday.

More…

Posted at 6:35 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Dr. Nenner has called this general area and general timing as the low for gold before $2100. So far Dr. Nenner’s track record in this gold market is among the best. The conclusions issued by Mr. Kramer-Miller are quite interesting carrying a high probability of being correct.

Gold: Beyond The Swiss Referendum
Nov. 30, 2014 1:51 PM ET
Ben Kramer-Miller

Summary

· The Swiss referendum vote is hours away, and all the world awaits as the Swiss decide their monetary future.

· Gold market followers should be indifferent: the measure will almost certainly fail, although it is not without symbolic significance.

· More tangible market activity speaks to this significance, namely that gold’s role in the monetary system is growing at the expense of the USD and fiat currencies more generally.

· Examples include central bank gold buying, citizens buying in Asia, and negative GOFO rates with an inverted yield curve.

· Traders will use the failed Swiss measure as an excuse to sell gold, but this will mark an incredible buying opportunity.

In the gold market all eyes are on the Swiss Referendum tomorrow. Should the measure pass then the SNB will be required to repatriate the gold it holds overseas (predominantly with the New York Fed) while it will not be able to sell any gold. It will also have to hold 20% of its reserves in gold. In short, while this measure is unlikely to pass given recent poll numbers it would be incredibly bullish for gold. The inverse is true as well–if the measure doesn’t pass this should be bearish for gold, and the clear breakdown during Friday’s trading session indicates that speculators are piling on the short side in anticipation of this development.

I agree with them and I agree with the trade, but the story is a little more complicated than that. For starters, the bearish sentiment is coming at a time when gold’s downtrend has been intact for several years, and it is a sign that we are much closer to a bottom than to the top.

Second, while there has been much attention being placed on the Swiss Referendum is a small part of a much larger story, which is that gold is becoming a more important part of the financial system given a growing global mistrust of fiat currencies and paper gold or claims on gold. This fact’s visibility, while hidden by the main stream media, is becoming obvious to those who are paying attention.

2014 has been a big year for this, and here are a few examples.

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Jim Sinclair’s Commentary

These are preliminary results, but so far the surprise is 22% voted for gold in light of the huge campaign by the banksters to block this cry for monetary freedom.

Swiss Reject SNB Gold Initiative, SRF Projections Show
By Catherine Bosley Nov 30, 2014 10:07 AM ET

Swiss voters rejected a referendum requiring their central bank to hold a portion of its assets in gold, a measure its President Thomas Jordan termed an “invitation to speculators” that could have hamstrung the economy.

The “Save Our Swiss Gold” proposal stipulating the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold and never sell any bullion was voted down by 78 percent to 22 percent, according to projections by Swiss television. Polls had forecast the initiative’s rejection. Two other initiatives on tax privileges for foreign millionaires and immigration limits also were rejected.

SNB policy makers warned repeatedly that the measure, which also required the 30 percent of central bank gold stored in Canada and the U.K. to be repatriated, would have made it harder to keep prices stable and shield the central bank’s cap on the franc of 1.20 per euro. That minimum exchange rate was set three years ago, with the SNB pledging to buy foreign currency in unlimited amounts to defend it.

“The key word is relief, but it’s not a reason to crack the champagne corks yet,” said Janwillem Acket, chief economist at Julius Baer Group Ltd. in Zurich. Due to the rejection, “the SNB has more options and fewer constraints on monetary policy,” he said.

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Jim Sinclair’s Commentary

Printing paper.

Ponzi: Treasury Issues $1T in New Debt in 8 Weeks—To Pay Old Debt
November 28, 2014 – 2:37 PM

The Daily Treasury Statement that was released Wednesday afternoon as Americans were preparing to celebrate Thanksgiving revealed that the U.S. Treasury has been forced to issue $1,040,965,000,000 in new debt since fiscal 2015 started just eight weeks ago in order to raise the money to pay off Treasury securities that were maturing and to cover new deficit spending by the government.

During those eight weeks, Treasury took in $341,591,000,000 in revenues. That was a record for the period between Oct. 1 and Nov. 25. But that record $341,591,000,000 in revenues was not enough to finance ongoing government spending let alone pay off old debt that matured.

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The Treasury also drew down its cash balance by $45.057 billion during the period, starting with $126,568,000,000 in cash and ending with $81,511,000,000.

The only way the Treasury could handle the $942,103,000,000 in old debt that matured during the period plus finance the new deficit spending the government engaged in was to roll over the old debt into new debt and issue enough additional new debt to cover the new deficit spending.

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Posted at 6:28 PM (CST) by & filed under Jim's Mailbox.

Jim,

I guess the who is right question will be settled. Are the Western banksters and central planners right when they claim gold is not money it just is a metal, or the East who are attempting to corner all the gold in the world correct, when they place gold at the center of the economic system? One will be right and the other wrong.

CIGA Larry

India scraps restrictions on gold imports

India has scrapped controversial restrictions on gold imports that have triggered a spike in smuggling and crippled the country’s jewellery industry.

On Friday the Reserve Bank of India reversed rules that force agencies importing the precious metal to set aside a fifth of all shipments for re-export, reports Avantika Chilkoti in Mumbai.

The restrictions were put in place in the middle of last year as a currency crisis swept through emerging markets and the Reserve Bank of India scrambled to control the current account deficit.

The move comes despite the recent increase in gold imports.

Official data show gold imports reached 106.3 tonnes, or $4.2bn, this October, almost four times the shipments in the same period a year earlier.

India overtook China to regain its position as the world’s largest consumer of gold in the third quarter of this year, according to the World Gold Council, with demand reaching 225 tonnes in the three-month period.

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