Posted at 11:53 AM (CST) by & filed under Jim's Mailbox.

Jim

Nobody knows what DC will do but John makes a good argument that they may do your QE to infinity rather than a bail-in. In any event, we have been out of the system for years.

My best as always,
CIGA Richard M

Embry added: “I find it interesting that they appear to have bailed out Banco Espirito in Portugal this week because there had been some suggestion that this was going to be a bail-in scenario. I believe things are so precarious that everything will be bailed out in order to avert another Lehman moment, which really got things rolling in 2008.

Click here to read the full article…

 

Jim,

This announcement was released on 4:41pm Friday just before the long holiday weekend followed by the sound of crickets in terms of mainstream media coverage.

CIGA Tom

Minister of Finance underscores the importance of ensuring Canada’s financial system remains strong
August 1, 2014 – Ottawa, Ontario – Department of Finance

Finance Minister Joe Oliver today launched a public consultation on a key element of the Government’s comprehensive risk management framework for Canada’s domestic systemically important banks. The proposed regime is aimed at ensuring:

that taxpayers are protected from having to bail out a systemically important bank in the highly unlikely event of such an institution running into difficulty; and,

that Canada’s financial system remains strong by clarifying that banks’ shareholders and creditors are responsible for bearing losses, thereby giving them stronger incentives to monitor the bank’s risk-taking activities.

More…

Jim,

The MSM is lying to us. This 2012 BBC report suggests that Ebola IS airborne. The original scientific study showed…

"6Contact exposure is considered to be the most important route of infection with EBOV in primates7, although there are reports suggesting or suspecting aerosol transmission of EBOV from NHP to NHP8, 9, 10, or in humans based on epidemiological observations11.

More…

CIGA Alex

 

Dear Jim,

Hang on to your hats – it’s getting very serious

On Fox Business Stewart Varney just interviewed a trader from the Chicago Mercantile Exchange. He projects thru the last half of this year Japan will see their economy SHRINK 6%. Their bonds presently have an interest rate 1/2 of 1%.

This is very bad for Japan and also the rest of the world including the US. It certainly starts to look like the pace is picking up and the unwinding is getting out of control.

CIGA Larry

 

Jim,

In case you’re not yet aware, Canada has announced public consultation (closing SEP 12) on what the bail-in regime law/regulations should be.

http://www.fin.gc.ca/n14/14-099-eng.asp

Things that caught my attention in the consultation paper include:

1. Confirmation that the D-SIBs (domestic systemically important banks) consist of all six of Canada’s major banks.

2. The potential for considering a failed bank’s depositors’ insured accounts being separated into a separate company from the failed bank’s other assets while noting that none of the six are currently structured in a subsidiary-type legal organization (which, e.g., could facilitate insulating their brokerage businesses from the bank’s banking activities).

Best regards,
CIGA Bill

Posted at 11:47 AM (CST) by & filed under Bill Holter.

Bill Holter for Miles Franklin

Dear CIGAs,

"Money as we know it…will simply disappear".  Could this really happen?  I think that it can and believe that it will in some fashion.  This is a huge statement and one that certainly needs some explaining.  Before getting to this, I want to relate to you a couple of questions I received this past week and pass along a quote that is very pertinent, and in my opinion almost an exact roadmap to what we will soon experience.

  First, I was asked by a new client, "I don’t understand, if the markets and banks close, how will I sell my gold and who will have money to buy it?".  This is a good question with no set in stone answer because once panic sets in there will be so many parts literally moving at the speed of light.  Let’s look at a couple of historic events to get a little bit of perspective.  After Archduke Ferdinand was shot in 1914, World War I commenced and our (U.S.) stock market was closed for nearly 6 months.  Money in the U.S. back then was either gold coin or "dollars" which were receipts for gold coin, "money" still circulated even though the stock market was closed.  Stocks circulated privately between individuals as certificates were signed over from one party to another in exchange for a real item or a service.

  Another historic event was back in May of 1931 when the Austrian bank Credit Anstalt failed.  This was a black swan event in a series that led to many banks around the world folding and what drove the U.S. and world economy deeper into depression.  A description of the affair after the fact by Lord Revelstoke (Barings Bank) was; "It was amazing, how, in a fortnight, the credit system we had spent decades building……collapsed".  Our banking system saw many failures and was closed for a time but again, money remained and still changed hands.  But remember, "money" was different back then, it was "real" whereas today it more resembles Monopoly money.

  Back to the original question, "how will I sell my gold and to whom"?  Gold (and silver) "ARE" money themselves.  They are a store of value, they have "worth" on their own as opposed to dollars, euros, yen or any other paper currencies.  The paper currencies have "value" because a government "says" it has value and enforces what they say with legal tender laws.  Gold and silver need not be "sold" for currency, they may instead be exchanged for goods or services during a time of stress.  Actually, the part of the question that asks "who will have the money to buy it?" can be answered in one word, "you".  YOU will have the "money" that may be retained or "spent" at your discretion, worrying about who will accept it during a crisis and after is not necessary.

More…

Posted at 3:57 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

Hit the pension funds to build the highways. This is a can that is reaching the end of the road.

How is Congress paying for the short-term Highway Trust Fund fix?
August 1, 2014, 10:54 AM

Congress is providing $11 billion to prevent a 28 percent reduction in federal highway and mass transit spending at the peak of the summer construction season. The Senate passed a House-written bill to augment federal gasoline and diesel fuel taxes for keeping the federal Highway Trust Fund solvent through next May. The bill raises the money through:

– Pension "smoothing." Raises $6.4 billion by allowing companies to reduce the amount that they contribute to their pension funds now and make up for it later. Since pension contributions are tax deductible, companies would owe more tax revenue in the next few years as more of their earnings are taxed. But in the later years, they would be able to claim higher deductions from larger contributions to their pension funds, costing the government revenue. Over time, the pension measure doesn’t raise revenue. But over the next 10 years – the time frame used to estimate the cost of legislation – it does. Critics warn it could cost taxpayers in the long run if federally insured pension plans can’t meet their obligations and the government’s Pension Benefit Guaranty Corp. has to cover them.

– Customs user fees. Raises $3.5 billion by extending for one year – through 2024 – various user fees paid to the Customs Service for goods, vehicles and people entering the U.S. Critics say it’s a gimmick that allows lawmakers to spend the money now and not pay it back for 10 years.

– Leaking underground storage tanks. Transfers $1 billion from an overfunded trust fund established to pay for cleaning up sites fouled by pollution from leaking underground storage tanks, including those at gas stations. Most problem sites have been cleaned up and the leaking tanks fund runs a surplus of about $200 million a year.

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Jim Sinclair’s Commentary

There are two sides to sanctions – geopolitical pressure and self injury.

Russia sanctions risk British jobs, warns JCB boss
By Ben Wright
9:00PM BST 03 Aug 2014

One of the UK’s most influential businessmen has hit out at European Union and US sanctions against Russia, claiming that they are ill-conceived and may result in the loss of British jobs.

Lord Bamford, chairman of JCB, said it was “absurd” that his company, a major exporter to Russia and the market leader for construction equipment there, would be hurt by sanctions “coming out of Brussels”. He added that the decisions being made by EU diplomats could put “British jobs at risk”.

Lord Bamford’s comments come days after EU governments decided to impose further economic sanctions against Russia after the downing of Malaysia Airlines flight MH17 in eastern Ukraine last month.

In the latest escalation of the worst tensions between the West and Moscow since the Cold War, the sanctions are aimed at Russia’s oil industry, defence, dual-use goods and sensitive technologies. However, there are growing fears that the sanctions will have knock-on repercussions for the European companies and the region’s economy.

Lord Bamford said: “Russia is a very important market for JCB and has been for more than 30 years. It appears that JCB is going to be affected by the decision to impose sanctions, but to what extent we are unable to say at the moment.

“We ship both machines and spare parts to Russia and are the market leader for construction equipment in the country. If sanctions restrict sales of machines and spare parts, there will be obviously be a major impact on JCB, which could put hundreds of British jobs at risk.

“It seems absurd that a leading UK exporter, successfully selling machinery to construction companies and farmers in Russia, could be affected so dramatically by EU sanctions coming out of Brussels.”

More…

Sovereign Man
August 4, 2014
Kiev, Ukraine

There’s nothing more permanent than a temporary government measure, as the old saying goes.

I was reminded of it when I came back to Kiev over the weekend and that the Ukrainian government imposed a series of “temporary” taxes to help the war effort.

And boy does this government need money.

According to both Ukrainian and Russian news sources, several hundred solders were left without weapons or ammunition and crossed the border into Russia.

The Ukrainian news suggests that this was a forced withdrawal after being routed by rebel forces. The Russian news suggests that the troops were seeking asylum, no doubt tired of war.

So the Ukrainian government is in a hurry, trying to raise at least $1 billion (a lot of money here).

They’ve jacked up wage taxes, natural resource taxes, and even taxes on farming exports.

But even if they collect the money they’re aiming for, Ukraine and its government are in a serious pinch.

For the last few months, even before the turmoil began, Ukraine has been in an inflationary cycle. Both retail and asset prices were spiraling higher.

Now they’ve entered a stagflationary period. The currency has gone into freefall. Unemployment is rising. The economy is contracting (6% by phony government estimates). And inflation is a whopping 19%… and rising.

These people are getting abused. And the worst is yet to come.

The banking system is borderline insolvent. The head of the local Citigroup branch here said that the non-performing loan ratio in Ukraine is as high as 40%.

And potentially up to 4% of all bank assets are now locked down in Crimea, which may or may not even be part of Ukraine any longer.

If the banking system collapses (and many here suspect it will), this place will become unglued. Asset prices will collapse, yet retail prices will surge even higher.

I can already see it on the street; so many businesses have closed. Hopeless unemployed youths are now roaming the city or joining the war effort.

And the entire populace has been mobilized to support the fight.

Of course, it’s pretty damn easy to cheer on the bloodshed when it’s not your blood. War can seem glorious when you only have to read about it in the newspapers.

There’s so much more I need to tell you about—the only way for me to capture this was in another podcast, probably the most emotional I’ve ever done.

Come listen for yourself:

http://www.sovereignman.com/podcast/podcast-014-dulce-et-decorum-est-pro-patria-mori-14818/

Until tomorrow,
Simon Black
Senior Editor, SovereignMan.com

Ukrainian troops cross into Russia to avoid fighting, talks underway
BY NATALIA ZINETS AND RICHARD BALMFORTH
KIEV Mon Aug 4, 2014 12:53pm EDT

(Reuters) – Ukraine said on Monday it was in talks with Moscow over the return of 311 Ukrainian soldiers and border guards who had been forced by fighting with separatists to cross into Russia, but Russian border authorities said the troops were seeking asylum.

Both sides seemed set to use the fate of the troops to score propaganda points as Ukrainian government forces extended steady gains it has made against the pro-Russian separatists since a Malaysian airliner was downed over a rebel-held area on July 17.

Ukrainian defence spokesman Andriy Lysenko said a group of soldiers and border guards, who had been caught between the Russian border to the east and rebel positions in the west, had crossed into Russia in the early hours of Monday.

He put their number at 311, telling a news briefing they had retreated into Russia for safety reasons after helping their comrades break through rebel lines.

Kiev, he said, was now negotiating with Russian authorities for their return.

More…

Jim Sinclair’s Commentary

The only reason for firm car sales is very soft loans.

GM unit gets subpoena over subprime auto loans
WASHINGTON Mon Aug 4, 2014 12:33pm EDT

(Reuters) – The U.S. government is investigating General Motors Co’s (GM.N) auto financing arm over subprime auto loans it made and securitized since 2007, the company disclosed on Monday.

General Motors Financial Co Inc said it was served with a subpoena from the Department of Justice directing it to turn over documents related to underwriting criteria.

The subpoena, which the company said was in connection with an investigation into possible violations of the civil fraud law FIRREA, also asked for information on the representations GM made about the criteria when the loans were pooled into securities.

Financial services firms have paid billions of dollars to resolve investigations under FIRREA into questionable mortgages pooled into securities in the run-up to the financial crisis. The new subpoena could be one of the first public acknowledgements that investigators are also looking at the securitization of subprime auto loans.

FIRREA, the Financial Institutions Reform, Recovery and Enforcement Act, allows the Justice Department to sue over fraud affecting a federally insured financial institution.

Separately, regulators have brought some recent cases against auto lenders over allegations of discrimination.

More…

Lebanese army advances in border battle with Islamists
BY ALEXANDER DZIADOSZ
OUTSKIRTS OF ARSAL Lebanon Mon Aug 4, 2014 1:14pm EDT

(Reuters) – The Lebanese army advanced on Monday into a border town attacked by Islamists at the weekend in the most serious spillover of the three-year-old Syrian civil war into Lebanon, and the Beirut government said the deadly assault would not go unpunished.

With army reinforcements arriving in Arsal, Prime Minister Tammam Salam, a Sunni Muslim, said there could be no political deal with gunmen identified as members of the Nusra Front and the Islamic State, which has seized parts of Syria and Iraq.

"The only solution proposed today is the withdrawal of the militants from Arsal and its environs," said Salam, the most senior Sunni in the Lebanese government.

Flanked by the rest of the cabinet, Salam accused the militants of seeking to "move their sick practices to Lebanon".

"We confirm that the attack on Lebanese national dignity will not go unpunished," he said.

Lebanon, still rebuilding from its own 1975-1990 civil war, has been buffeted by violence linked to the Syrian conflict, including rocket attacks, suicide bombings and gun battles.

But this was the first major incursion by hardline Sunni militants who have become leading players in Sunni-Shi’ite violence that has unfolded across the Levant, destabilising Lebanon by inflaming its own sectarian tensions.

More…

Jim Sinclair’s Commentary

Sanctions are going to hurt Europe big time.

Russian sanctions crushing German business
Published time: August 01, 2014 11:20

The West is tightening the financial screws on Moscow, but German companies are already feeling the kickback of a slowing Russian economy and weakening ruble.

Russia is Europe’s third-largest trading partner, so a spluttering Russian economy, exacerbated by the Ukraine crisis, is seriously affecting German companies. In 2013, Germany exported 36 billion euro worth of goods to Russia.

A higher value ruble and inflation risk consumer spending in the region, and are cutting German involvement in the market accordingly.

German sports retailer Adidas lowered financial targets for the next two years, citing conditions in Russia as a major stumbling block.

“The recent trend change in the Russian ruble as well as increasing risks to consumer sentiment and consumer spending from current tensions in the region point to higher risks to the short-term profitability contribution from Russia/CIS,” the company’s financial outlook said.

More…

Chinese Gold Demand 1063 MT YTD
Total Chinese Reserves Reach 15,000 Tonnes
Published: 04-08-2014 20:32

For ten days I’ve been on vacation without internet, hence I missed one week to report on withdrawals from the Shanghai Gold Exchange (SGE) vaults. Here is a quick overview of what happened in the Chinese gold market in week 29 and 30.

In week 29 (July 14 -18) 32 metric tonnes were withdrawn from SGE vaults and in week 30 (July 20 – 25) 33 tonnes were withdrawn. Both lower than the year to date average of 35.4 tonnes, but higher than the five week moving average trend (5 WMA). In total 1063 tonnes has been withdrawn year to date. The premium on gold at the SGE is still hovering around zero. 

More…

Patient in NYC being tested for Ebola at Mount Sinai Hospital
By TINA SUSMAN

New York’s Mount Sinai Hospital was performing tests Monday on a patient who had traveled recently in West Africa, where an Ebola outbreak has killed hundreds of people, after he arrived at the emergency room with symptoms of the disease.

The hospital said in a statement that he had a high fever and gastrointestinal symptoms when he came to the emergency room in the early hours of Monday. He was put in isolation until test results are back.

"The patient had recently traveled to a West African country where Ebola has been reported," the hospital said. "The patient has been placed in strict isolation and is undergoing medical screenings to determine the cause of his symptoms. All necessary steps are being taken to ensure the safety of all patients, visitors and staff.

"We will continue to work closely with federal, state and city health officials to address and monitor this case, keep the community informed and provide the best quality care to all of our patients."

An Ebola outbreak in four West African countries has killed hundreds of people and sickened more than 1,000, including two American aid workers in Liberia. One of them, Dr. Kent Brantly, was flown back to the United States on Saturday and is being treated at Emory University Hospital in Atlanta. The other, Nancy Writebol, is expected to be brought to Atlanta on Tuesday.

More…

Posted at 1:00 PM (CST) by & filed under Jim's Mailbox.

Jim,

I am sure there is no significance in the fact that the US debt has risen over $7trillion since "O" took office.

CIGA Larry

$7,060,259,674,497.51–Federal Debt Up $7 Trillion Under Obama
August 4, 2014 – 4:04 AM
By Terry Jeffrey

(CNSNews.com) – The total federal debt of the U.S. government has now increased more than $7 trillion during the slightly more than five and a half years Barack Obama has been president.

That is more than the debt increased under all U.S. presidents from George Washington through Bill Clinton combined, and it is more debt than was accumulated in the first 227 years of this nation’s existence–from 1776 through 2003.

The total federal debt first passed the $7-trillion mark on Jan. 15, 2004, after President George W. Bush had been in office almost three years.

More…

Posted at 11:49 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Coming soon to bank you use.

BES shareholders brace for ‘bail in’
By Peter Wise in Lisbon

Regulators are preparing to inject up to €4bn into Banco Espírito Santo as part of a government-backed rescue that is expected to penalise shareholders and bondholders but spare taxpayers most of the burden of bailing out the distressed Portuguese lender, according to people familiar with the situation.

Carlos Costa, governor of the Bank of Portugal, was expected to make a statement on the rescue late on Sunday.

Lisbon is expected to use a small bank resolution fund financed by the Portuguese financial sector as a vehicle to acquire BES. It would then be recapitalised and sold to private investors after its toxic assets were removed to a separate “bad bank”, Luís Marques Mendes, a former leader of the governing Social Democrat party, told Portuguese television.

EU regulators have promised a tougher stance on mismanaged lenders, and a bail-in for BES shareholders and bondholders would demonstrate that they are ready to protect taxpayers from bearing the cost of bank rescues before legislation on the issue comes into force at the end of 2015.

Pedro Passos Coelho, prime minister, has also pledged that Portugal’s taxpayers will not be called on to bail out failing banks.

A rapid intervention to rescue BES has become increasingly probable since Wednesday when the lender reported a first-half net loss of €3.58bn and impairments totalling €4.25bn. The record loss wiped out the bank’s capital buffers, dangerously weakened its solvency ratios as its share price plummeted.

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Jim Sinclair’s Commentary

There is light at the end of this manipulative tunnel.

Mining Stocks Climb Into Top 10 Of IBD Industry Ranks
By SCOTT STODDARD, INVESTOR’S BUSINESS DAILY
Posted 08/01/2014 06:03 PM ET

Gold and silver miners have risen into the upper echelon of IBD’s industry ranks in recent weeks amid a pickup in profit growth.

The Mining-Gold/Silver/Gems industry stood at No. 7 out of 197 as of Friday’s IBD. That’s up from No. 26 six weeks ago.

Also, the broader mining sector was ranked fifth out of 33.

As a whole, the 50-stock group is up 29% this year, easily outpacing the S&P 500′s 4% gain.

Agnico Eagle Mines (NYSE:AEM) leads the industry with a Composite Rating of 96. However, the stock fell sharply Thursday after the company announced profit of 28 cents per share in the second quarter, rebounding from a loss of 3 cents in the same period last year but below Wall Street estimates.

Revenue for the period jumped 30% to $437.8 million, accelerating from the prior quarter’s 17% gain and the biggest increase in 13 quarters. The stock is getting support at its 10-week moving average for the first time since it broke out of a cup-with-handle base in mid-June.

While that technically puts Agnico in a secondary buy range, investors should be cautious with the market in weak condition and the severe selling last week in Agnico shares.

More…

Missing Soldier Killed in Battle, Israel Confirms
By STEVEN ERLANGER and JODI RUDORENAUG. 2, 2014

JERUSALEM — The Israeli military said early Sunday morning that an officer thought to have been captured by Palestinian militants during a deadly clash Friday morning, which shattered a planned 72-hour cease-fire, was now considered to have been killed in battle.

The announcement came just hours after Prime Minister Benjamin Netanyahu vowed to continue Israel’s military campaign in the Gaza Strip as long as necessary to stop Hamas attacks, while suggesting a de-escalation of the ground war in Gaza may be near.

The case of the missing soldier, Second Lt. Hadar Goldin, 23, became the latest flash point in the conflict, prompting a fierce Israeli bombardment and calls from leaders around the world for his release. His disappearance came after Hamas militants ambushed Israeli soldiers near the southern border town of Rafah, at the start of what was supposed to have been a pause in the fighting.

As the death toll mounted Saturday to more than 1,650 Palestinians, many of them women and children, and images of homes, mosques and schools smashed into rubble filled the media, Mr. Netanyahu was under considerable international pressure, from Washington and Europe, to end the conflict. The United Nations warned of “an unfolding health disaster” in Gaza with little electricity, bad water and a lack of medical supplies.

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Jim Sinclair’s Commentary

For those who believe the COT figures, please consider this.

CFTC Charges J.P. Morgan Securities LLC with Repeatedly Submitting Inaccurate Large Trader Reports and Imposes a $650,000 Civil Monetary Penalty

Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against J.P. Morgan Securities LLC (JPMS), a wholly-owned subsidiary of JPMorgan Chase & Co. and a CFTC-registered Futures Commission Merchant (FCM), for submitting inaccurate reports to the CFTC relating to the required reporting of positions held by certain large traders whose accounts are carried by JPMS. The reporting violations occurred despite the CFTC notifying JPMS of numerous errors in its reports. The CFTC Order requires JPMS to pay a $650,000 civil monetary penalty to address its unlawful conduct.

The reports are known as the “large trader” reports and are used by the CFTC in order to evaluate potential market risks and monitor compliance with CFTC requirements.

CFTC Director of Enforcement Aitan Goelman commented: “The large trader reports are vital to the CFTC’s role in monitoring market behavior and are important to members of the public, many of whom rely on that information in forming trading strategies. Therefore, submission of accurate and reliable data to the CFTC is essential. The CFTC will be vigilant in enforcing these rules in order to ensure the integrity of the regulatory structure and to maintain transparency in the markets.”

The CFTC Order specifically finds that since at least 2012, the CFTC was notifying JPMS about errors in its large trader reports, which increased in frequency throughout the year. CFTC Regulations require FCMs to submit information on a daily basis for certain large traders, such as the number of open futures or options positions; the number of delivery notices issued or stopped; and the number of Exchange For Related Positions (EFRPs). In December 2012, the CFTC notified JPMS that the on-going problems were unacceptable. JPMS, relying on its third-party vendor that generated the reports for JPMS, assured CFTC staff that the problems would be resolved on or before the end of January 2013. However, JPMS continued to submit large trader reports that contained hundreds of errors throughout the period from February 1, 2013 to February 2014.

Accordingly, the CFTC Order finds that JPMS violated Section 4g(a) of the Commodity Exchange Act (CEA), 7 U.S.C. § 6g(a) (2012), and CFTC Regulation 17.00(a)(1), 17 C.F.R. § 17.00(a)(1) (2013), with respect to its large trader reporting of delivery notices and EFRPs in connection with futures positions.

In addition to imposition of the $650,000 civil monetary penalty, the CFTC ordered JPMS to submit a certified statement of compliance within 120 days of the entry of the CFTC Order stating that it has completed enhancements to its systems and procedures related to reporting of delivery notices and EFRPs, and has tested such systems and procedures to ensure that they now comply with the requirements of the CEA and CFTC Regulations.

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Jim Sinclair’s Commentary

Act and reaction is the formula for spreading economic war.

Russia Eyes Banning U.S. Chicken And Some European Fruit
By Brian Wingfield and Ilya Arkhipov Jul 29, 2014 12:21 PM ET

July 29 (Bloomberg) — The U.S. and the European Union may move as soon as today to impose tougher sanctions on Russia as Vladimir Putin’s government formulates its response to growing international pressure over the conflict in Ukraine. Ryan Chilcote reports on “In The Loop.” (Source: Bloomberg)

Facing tougher sanctions over Ukraine, Russia said yesterday it may ban imports of chicken from the U.S. and fruit from Europe and is investigating McDonald’s Corp. (MCD) cheese for safety.

Meanwhile, a Russian lawmaker has drafted legislation that might result in U.S. accounting firms such as Deloitte LLP and KPMG LLP being barred from doing business in his country.

While Russia and the U.S. have long sparred over agricultural trade, the actions fueled speculation they could be retaliatory. The 28-nation European Union and the U.S. plan to impose stiffer sanctions to punish Russian President Vladimir Putin’s government.

“It’s a troubling continuation/expansion of trade as a geopolitical tool,” Gary Blumenthal, president of World Perspectives Inc., a Washington-based agricultural consulting firm, said in a phone interview.

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Jim Sinclair’s Commentary

War can start by mistake when combatants and spies are in the same airspace.

U.S. official: Spy plane flees Russian jet, radar; ends up over Sweden
From Barbara Starr, CNN Pentagon Correspondent
updated 10:56 AM EDT, Sun August 3, 2014

Washington (CNN) — The Cold War aerial games of chicken portrayed in the movie "Top Gun" are happening in real life again nearly 30 years later.

A U.S. Air Force spy plane evaded an encounter with the Russian military on July 18, just a day after Malaysia Airlines Flight 17 was downed by a suspected surface-to-air missile that Ukraine and the West allege was fired by pro-Russia rebels in eastern Ukraine.

The RC-135 Rivet Joint fled into nearby Swedish airspace without that country’s permission, a U.S. military official told CNN. The airplane may have gone through other countries’ airspace as well, though it’s not clear if it had permission to do so.

The U.S. plane had been flying in international airspace, conducting an electronic eavesdropping mission on the Russian military, when the Russians took the unusual action of beginning to track it with land-based radar.

The Russians then sent at least one fighter jet into the sky to intercept the aircraft, the U.S. official said Saturday.

The spy plane crew felt so concerned about the radar tracking that it wanted to get out of the area as quickly as possible, the official said. The quickest route away from the Russians took them into Swedish airspace. The U.S. official acknowledged that was done without Swedish military approval.

As a result of this incident, the United States is discussing the matter with Sweden and letting officials know there may be further occurrences where American jets have to divert so quickly they may not be able to wait for permission.

More…

G-20 Revolt? France Gets "Positive Reception" To Challenge US Bank Fines
Submitted by Tyler Durden on 08/03/2014 15:46 -0400

In recent weeks France has defied US demands not to build Mistrals for Russia, has questioned dollar imperialism and the Petrodollar, and has blasted the US banking regulator’s fines as "accelerating the decline of the dollar." So it is likely not a huge surprise that ahead of the G-20 meeting of world leaders later in the year, The FT reports, France has gathered support to challenge US regulators imposing heavy penalties on foreign banks.Berlin, London and Rome have backed Paris in its push to have its concerns about so-called US extraterritoriality discussed when leaders of the world’s top 20 economies meet hoping to bring "more proportionality" to bank fines. With allies like this…

As The FT reports, top regulators have been raising concerns about the impact of the long procession of fines on their efforts to strengthen banks’ finances.

France has gathered support to challenge US regulators imposing heavy penalties on foreign banks at a G20 meeting of world leaders later this year after the record $8.9bn fine levied on BNP Paribas last month.

Berlin, London and Rome have backed Paris in its push to have its concerns about so-called US extraterritoriality discussed when leaders of the world’s top 20 economies meet in Brisbane in Australia in November, according to French and other European officials.

“There should be co-ordination between regulators, as there should not be multiple jeopardy,”agreed one senior European official, who confirmed that there had been “informal discussions” about putting the issue of bank fines on the G20 agenda.

“It is an issue, but we have to be careful not to go into an area of saying ‘it is too much and we have got to lay off these guys’,” said the official, who added that the G20 could discuss how to bring more “proportionality” to bank fines.

French finance minister Michel Sapin sought support for France’s stance in recent meetings with Wolfgang Schäuble and Pier Carlo Padoan, his German and Italian counterparts, according to French officials. There was a “positive reception”, one said.

More…

Jim Sinclair’s Commentary

So many moves are afoot to distance the USD.

Eurasian Economic Union plans to adopt common currency unit
August 03, 23:15 UTC+4

MOSCOW, August 03, /ITAR-TASS/. The Eurasian Economic Union of Russia, Belarus and Kazakhstan might adopt it’s a common currency unit, the Rossiiskaya Gazeta newspaper writes in its Monday issue.

The daily cites Bembya Khulkhachiyev, director of the Eurasian Economic Union’s financial policy department, as saying that the Union was planning to make a wider use of the national currencies of the three member states with an eye to create a common payment system. If these tasks are solved successfully, the issue of a common currency unit might be raised, he said.

Currently, the Eurasian Economic Union, according to Khulkhachiyev, makes 50% of internal settlements in roubles, 40% – in U.S. dollars, eight to nine percent – in euros. The share of other currencies barely reaches one percent.

Processes of financial integration within the Eurasian Economic Union “are especially important now that the European Union and the United States have imposed sanctions against Russia’s financial sector – Sberbank, VTB, VEB, Gazprombank and Rosselkhozbank,” the Rossiiskaya Gazeta notes.

The three countries signed a Eurasian Economic Union Treaty in May 2014. The Union is to supersede the Common Economic Space of Belarus, Russia and Kazakhstan on January 1, 2015. Two more countries of the Commonwealth of Independent States (CIS), Armenia and Kyrgyzstan, have announced their plans to join the Union.

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Posted at 10:50 PM (CST) by & filed under Jim's Mailbox.

Jim,

One story after another spells doom for this world. It is difficult to imagine all these bad story will be resolved without a major world response.

CIGA Larry

Islamic State fighters seize Iraq’s biggest dam

Islamic State fighters seized control of Iraq’s biggest dam, an oilfield and three more towns on Sunday after inflicting their first major defeat on Kurdish forces since sweeping through the region in June.

Capture of the Mosul Dam after an offensive of barely 24 hours could give the Sunni militants the ability to flood major Iraqi cities, sharply raising the stakes in their bid to topple Prime Minister Nuri al-Maliki’s Shi’ite-led government.

Islamic State, which sees Iraq’s majority Shi’ites as apostates who deserve to be killed, also seized the Ain Zalah oil field, adding to four others already under their control, and three towns.

They faced strong Kurdish resistance only at the start of their latest offensive when taking the town of Zumar. The Islamists then hoisted their black flags there, a ritual that usually precedes mass executions of their captured opponents and the imposition of an ideology even al-Qaeda finds excessive.

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Posted at 12:12 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Beef, Chief Canine Officer and #1 Assistant.

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Jim Sinclair’s Commentary

OTC derivatives do their dirty business one more time.

Argentina blames US for debt woes, denies default
By Paula Bustamante

Buenos Aires (AFP) – Argentina blamed the United States for the legal battle that forced it to miss a debt payment and, despite ratings agencies’ declarations to the contrary, denied being in default.

Ratings agency Fitch declared Argentina in "restrictive default" Thursday after 11th-hour talks failed to resolve the country’s dispute with two US hedge funds that refuse to accept a write-down on their Argentine bonds.

Fitch’s label echoed the "selective default" declared Wednesday by Standard & Poor’s. Both terms indicate that Argentina has defaulted on one or more of its financial commitments but continues to meet others.

US District Judge Thomas Griesa has blocked Argentina from paying its "exchange creditors" — those who agreed to take a 70-percent write-down after the country’s 2001 default — without also paying two American hedge funds that took it to court demanding full payment.

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Jim Sinclair’s Commentary

Surprise to MSM and FTV who called up to 300,000.

Economy adds 209,000 jobs in July; unemployment rate edges up to 6.2 percent
By Ylan Q. Mui August 1 at 8:42 AM

For six straight months, the U.S. economy has added more than 200,000 jobs, according to government data released Friday morning, the longest streak since the mid-’90s.

The Labor Department reported 209,000 net new jobs were created in July, though the unemployment edged up slightly to 6.2 percent. The report was the latest in a string of upbeat data suggesting the country’s economic recovery has shifted into the next gear.

The industries hiring the most workers were professional and business services, as well as manufacturing and construction. That dovetailed with a private estimate of job growth earlier this week indicating broad-based improvement in the labor market. That analysis, by human resources firm ADP, showed both larger corporations and smaller businesses were adding workers.

Still, the government data revealed that progress in several trouble spots in the job market stalled in July. The ranks of part-time workers who would like more hours was essentially unchanged at 7.5 million in July after spiking the previous month. The number of people out of work for six months or more also barely budged at 3.2 million, representing about one-third of the unemployed. And the size of the nation’s workforce held pretty much steady at 62.9 percent.

Federal Reserve Chair Janet Yellen has cited those indicators as potential signs that the job market is weaker than the official hiring and unemployment numbers suggest. In an official statement released Wednesday, the central bank acknowledged the broad gains in employment but included a caveat.

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Jim Sinclair’s Commentary

You have to feel for the victim of Ebola, but transporting him to the US is a major roll of dice.

Ebola patient coming to U.S. as aid workers’ health worsens
BY JULIE STEENHUYSEN AND COLLEEN JENKINS
CHICAGO/WINSTON-SALEM N.C. Fri Aug 1, 2014 10:40am EDT

(Reuters) – A U.S. aid worker who was infected with the deadly Ebola virus while working in West Africa will be flown to the United States to be treated in a high-security ward at Emory University Hospital in Atlanta, hospital officials said on Thursday.

The aid worker, whose name has not been released, will be moved in the next several days to a special isolation unit at Emory. The unit was set up in collaboration with the U.S. Centers for Disease Control and Prevention.

CDC spokeswoman Barbara Reynolds said her agency was working with the U.S. State Department to facilitate the transfer.

Reynolds said the CDC was not aware of any Ebola patient ever being treated in the United States, but five people in the past decade have entered the country with either Lassa Fever or Marburg Fever, hemorrhagic fevers similar to Ebola.

News of the transfer follows reports of the declining health of two infected U.S. aid workers, Dr. Kent Brantly and missionary Nancy Writebol, who contracted Ebola while working in Liberia on behalf of North Carolina-based Christian relief groups Samaritan’s Purse and SIM.

CNN and ABC News reported that a second American infected with Ebola was to be flown to the United States. CNN identified the U.S.-bound patients as Brantly and Writebol. Reuters could not independently confirm the reports.

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Jim Sinclair’s Commentary

No, it is not.

If it’s not OK to spy on senators, is it still OK to spy on citizens?
By Ashe Schow | July 31, 2014 | 1:08 pm

Central Intelligence Agency Director John Brennan admitted Thursday that agency officials acted improperly when they hacked Senate computers,according to the Associated Press.

Dean Boyd, a spokesman for the CIA, said, the officials “acted in a manner inconsistent with the common understanding reached between [the Senate Select Committee on Intelligence] and the CIA in 2009.”

Brennan is now apologizing to senators, including Dianne Feinstein, D-Calif., who accused the CIA earlier this year of possibly violating the Constitution.

“The director … apologized to them for such actions by CIA officers as described in the [Office of Inspector General] report,” Boyd added.

Brennan had initially denied the notion that the CIA was spying on members of Congress, telling NBC host Andrea Mitchell in March that “nothing could be further from the truth.”

At issue is the fact that in January, the CIA hacked into computers used by staffers on the Intelligence Committee to remove documents relating to the committee’s review of government torture policies under President George W. Bush.

The situation brings up another question for civil liberty-minded Americans: Why can’t innocent Americans get the same agreement with the CIA – or the National Security Agency – that the Intelligence Committee received?

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US Manufacturing PMI Misses By Most In 11 Months, Employment Plunges, Blames Russia & Gaza
Tyler Durden on 08/01/2014 09:54 -0400

US Manufacturing PMI in July dropped to 3-month lows at 55.8, missing expectations by the most since Augiust 2013 as employment growth moderated to its slowest in 13 months. The ‘excuse’ this time – Russia and Gaza.

PMI tumbled…

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and employment plunged…

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Don’t worry, we have an excuse for that:

“The one area of concern is the slacking pace of employment growth signalled by the survey, which suggests companies have become increasingly cautious about taking on new staff given growing uncertainties, such as the escalating situations in Russia and Gaza.

“With overseas worries likely to hit demand in key export markets, and exports having already stagnated in the past two months, overseas trade looks likely to continue to act as a drag on the US economy.“

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The West’s Reckless Rush Towards War with Russia
We’re taking big risks for unclear reasons
by Chris Martenson
Thursday, July 31, 2014, 10:54 AM

For reasons that have no rational explanations at this time, the US and Europe have embarked on a concerted program to demonize Putin, ostracize Russia, and bring the world as close to a major conflict as it’s been since the Cold War, a time hardly memorable to many in the current crop of our elected officials.

Within hours of the MH-17 plane crash, the United States pinned the blame on Russia generally, and Putin particularly. The anti-Putin propaganda (and if there were a stronger term I’d use it) has been relentless and almost comically over-the-top (see image above, and those below).

The US and the UK in particular, are leading the charge. Indeed, the UK’s Daily Mail managed to crank out an article on the MH-17 affair within just a few hours on the very same day it occurred with this headline:

The blood on Putin’s hands…

Jul 17, 2014

The world may have averted its gaze towards Israel and Gaza, but this week the rumbling warfare in eastern Ukraine has been erupting into something growing daily more dangerous.

Meanwhile the Russian bear, still pretending to be an innocent party despite blood dripping from its paws, has begun stealthily rebuilding its forces on the border.

Now we may well have witnessed the kind of shocking event that happens when heavy armaments are placed in the hands of untrained and desperate militias.

That’s really an amazing piece of journalism to have managed to have figured out the who, the what and the why of a major catastrophe without the benefit of any evidence or investigation.  One wonders who the author’s source was for obtaining what have become very crisp talking points that both the US and Europe are echoing as they exert increasing pressure on Russia?

Nearly two weeks later, neither the US nor Europe has provided substantial evidence of any sort to support their assertions that Ukrainian separatists and/or Russia are to blame for the MH-17 catastrophe. There’s literally been nothing.

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Gaza Cease-Fire Collapses; Israeli Soldier Is Captured
By ISABEL KERSHNER and FARES AKRAM

JERUSALEM — A newly reached cease-fire in the Gaza conflict quickly collapsed on Friday as the Israeli military announced that two soldiers had been killed and a third apparently captured by Palestinian militants who emerged from a tunnel near Rafah in the southern Gaza Strip.

Gaza health officials said 35 Palestinians had been killed and more than 100 wounded as Israeli forces bombarded the area. Palestinian witnesses said by telephone that Israeli tank shells had hit eastern Rafah as residents returned to inspect homes they had evacuated.

Each side accused the other of violating the 72-hour truce, which disintegrated in less than two hours.

Hamas, the dominant militant group in Gaza, said in a statement that Israel’s announcement about the capture of an Israeli soldier was intended “to cover up the barbaric massacres, especially in Rafah.”

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Posted at 11:19 AM (CST) by & filed under Jim's Mailbox.

Jim,

Another bad day for the Cabal.  Everywhere Kerry goes he faces failure.  Other than another photo op, I’m not sure why Kerry went to India since WTO issues do not fall within a Secretary of State’s preview.

Since the earlier 1960′s trade negotiations are the responsibility of the US Office of Trade Representative, which is a cabinet position reporting directly to the President.

The India trip is just another example of Kerry’s need for the spotlight. In contrast note how focused Russia FM Lavrov is.

CIGA Craig

India says WTO deal not dead, can sign in September if concerns addressed
By Manoj Kumar and Tom Miles
NEW DELHI/GENEVA Fri Aug 1, 2014 11:25am EDT

(Reuters) – India is willing to sign a global trade deal, which it has torpedoed, if other World Trade Organization members can agree to its parallel demand for concessions on stockpiling food, senior officials in New Delhi said on Friday.

The deadline to sign the WTO pact to ease worldwide customs rules lapsed at midnight in Geneva on Thursday after India demanded that the group also finalise an agreement giving it more freedom to subsidise and stockpile food grains than is allowed by WTO rules.

It was not immediately clear if the latest comments by Indian officials would open a window for the deal to be resurrected.

In Geneva, a trade diplomat from a developing nation said: "The trust that countries have in what India says is going to be significantly diminished."

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