Posted at 11:05 PM (CST) by & filed under Bill Holter.

Dear CIGAs,

I finished my last writing with the question “will we still have the rule of law?” and commented what a can of worms this topic is. While I knew the question of the rule of law would certainly come up later this year, I had no idea how quickly! Normally forensic logic is a process of “connecting dots”, in this instance the “dots” are more like one giant blob of crap covering the page entirely. On many previous occasions we have seen election fraud, market riggings and bogus economic reports, the corruption is now no longer contained or done in secret… it is done in public. Maybe so the public can “see it”? Let’s take a look at “law”.

We have heard stories where the police are confiscating cash during traffic stops where the driver/passenger then has to prove “how or where” they got the money. In many cases, even after proof is delivered …the money is not returned. We also have recently seen where Oklahoma troopers/officers have technology to swipe debit cards and clear balances because “you might buy drugs or commit a crime” with that cash. Does this scare you? It should!

A week or so back, we heard of Bill Clinton meeting with Attorney General Loretta Lynch on an airport tarmac. Within a week, James Comey (who turns out to have many past trails crossing the Clinton’s path)

http://21stcenturywire.com/2016/07/13/fbi-director-comey-board-member-of-clinton-foundation-connected-bank-hsbc/ recommended no charges for Hillary’s mishandling of classified information. This was the ultimate George Carlin joke, “it’s a big club and you ain’t in it”! The average Joe now knows because he has seen with his own eyes, the law does not pertain to the elite …but it and then some does pertain to you. While on the subject of public servants, I believe the breakdown in the rule of law truly reared its ugly head upon the death of Justice Antonin Scalia. How is it possible that an autopsy was mandatory for “Prince” but not for a Supreme Court Justice? Another public servant, Supreme Court Justice Ginsberg recently badmouthed Donald Trump in a very public fashion. “Impartiality”?

Of course we have seen some bad shootings. Two recently where blacks were shot and killed by police, which in turn was followed by police being shot or shot at in Georgia, Tennessee and Dallas. (Where was the media for LaVoy Finicum?). Next up will apparently be this Friday as information has surfaced that a list of protests will occur in three dozen major U.S. cities.

http://offgridsurvival.com/majorcivilunrest-blmpantherschaos/. There are also rumors of more than 10,000 being bussed in to protest the Republican convention for what is being called the “summer of chaos”. This, courtesy of the globalists and of course George Soros.

The rule of law has not solely been repealed within the U.S.. The world court in Hague recently ruled the Chinese have no claim to occupied islands

http://www.bloomberg.com/news/articles/2016-07-12/china-no-historic-right-to-south-china-sea-resources-court-says. To this I was quite surprised because many rulings and treaties after WWII clearly void Japanese claim to any and all of them. Now we will wait to see how this progresses. I would assume the Chinese will take the attitude of ignoring the ruling entirely with a stance of “we are here, come and take it”. Mr. Putin has and is clearly preparing to stand with China. No matter what happens, it cannot be good. It will either be war, or the U.S. loses more face and credibility. Because this ruling will force action, it is no doubt a step forward in strength and resolve by China and a step backward for the U.S..

The important thing to take from this writing is the fact that the previous “de facto” lack of law has now become “public” and in your face REAL! The mayor of Atlanta even mentioned the “National Guard” in passing yesterday. Please understand this, once the National Guard is called out anywhere …they will be called out everywhere. What was unthinkable will become the new normal. This will be your beginning to martial law which will sweep the country very rapidly.

I have said all year long, I believed the odds of having a November election were slightly less than a coin flip. I will now update that as I believe the odds have risen to somewhere between 65-70% …no election. Am I wrong? I believe we will very soon see. We will see the aftermath of protests this coming Saturday morning and also see whether or not the Republican convention is completed.

I know that many are very opposed to “guns” and believe the world would be a safer place without them, I personally do not understand the logic. I would only point out, there are no atheists in a foxhole and no anti-gun advocates when there are no police and you are the only one without a gun. The rule of law has and is breaking down …and doing so in very public fashion. We are facing societal breakdown right in the face and unfortunately this will play right into globalist hands. You see, the mass of “helpless” will BEG for safety and security in lieu of liberty. For years “safety and security” have been offered in the place of liberty. The next six months are extremely crucial for the direction of our country and the world. Sadly, for many it will mean a choice between liberty and death …”safety be damned’!

Standing watch, locked and loaded.

Bill Holter
Holter-Sinclair collaboration
Comments welcome bholter@hotmail.com

Posted at 8:12 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Free of Friday? Below is a list of places to vent anything and everything. Sorry, Angel is not for rent.

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Day of Rage Protests and Chaos planned by Activist Groups on Friday, July 15th
July 12, 2016 Robert Richardson

A group claiming to be the hacktivist group Anonymous, along with a number of other radical activist groups, is calling for a nationwide day of protesting on Friday, July 15th. Day of Rage protests are being planned by various groups in dozens of major cities throughout the country and police are gearing up for some major problems.

The hacktivist group released the following video to their followers; I warn you though there are some very graphic and disturbing scenes in the video.

Day of Rage Protests across America

While the group claims the protests will be peaceful, during the last week multiple police officers have been attacked, shot, and even murdered throughout the country. Major cities have had their highways shut down, and transit systems have had to reroute buses and traffic after these groups took over major roadways.

The media will tell you these people are peaceful, but as we have been reporting all week, and as you will see in the video below, at these so-called peaceful protests the leaders of these groups are calling for violence.

Do these people sound like peaceful protesters?

List of Cities where Day of Rage Protests will be Taking Place

Below is a list of cities that already have planned protests, we advise anyone in these areas to stay as far away as possible. There are a number of groups out there that are trying to use recent event to spread chaos throughout the country. This is no longer about police shootings, civil rights, or any of the other phony excuses they are using to terrorize these cities; this is about creating chaos and bringing the system to its knees.

Please Stay Alert!!! We have no way of knowing how serious these threats are, these groups have made similar threats in the past and nothing came of them, but with everything that has happened over the last week and with the Republican and Democratic Conventions coming up I think there is at least a reason to be concerned.

Please be careful if you live in these cities, and you may want to consider getting out of town on Friday:

Phoenix: 5:00PM (EASTLAKE PARK, 1549 E Jefferson St , Phoenix, AZ 85034)

Tuscon: 5:00PM (CATALINA PARK, 900 N 4th Avenue, Tucson, AZ 85705)

Little Rock: 6:00PM (OUTSIDE STATE CAPITOL BUILDING, Dr Martin Luther King Jr Dr., Little Rock, AR 72201)

San Francisco: 4:00PM (CIVIC CENTER PLAZA, 355 Mcallister St, San Francisco, California 94102)

Oakland: 4:00PM (FRANK OGAWA PLAZA, 1 Frank H Ogawa Plaza, Oakland, CA 94612)

Los Angeles: 4:00PM (LEIMERT PLAZA PARK, 4395 Leimert Blvd., Los Angeles, CA 90008)

Denver: 5:00PM (CIVIC CENTER PARK, 100 W 14th Ave Pkwy, Denver, Colorado 80204)

Washington DC: 7:00PM (OUTSIDE WHITE HOUSE, 1600 Pennsylvania Ave NW, Washington, DC 20500)

Atlanta: 7:00PM (OLD DECATUR COURTHOUSE, 101 E Court Sq, Decatur, GA 30030)

Tampa: 7:00PM (OUTSIDE HILLSBOROUGH COURTHOUSE, 800 E Twiggs St, Tampa, FL)

Orlando: 7:00PM (LAKE EOLA PARK, 195 N Rosalind Ave, Orlando, Florida 32801)

Miami: 7:00PM (GWEN CHERRY PARK, NW 71 St., Miami, Florida, 33147)

Chicago: 6:00PM (RICHARD J DALEY CENTER, 50 W Washington St, Chicago, Illinois 60602)

Des Moines: 6:00PM (IOWA STATE CAPITOL, 1007 E Grand Ave, Des Moines, IA 50319)

New Orleans: 6:00PM (LAFAYETTE SQUARE, New Orleans, LA 70130)

Baltimore: 7:00PM (201 E Pratt St, Baltimore, MD 21202)

Boston: 7:00PM (MASSACHUSETTS STATE HOUSE, 24 Beacon St, Boston, MA 01233)

Detroit: 7:00PM (Campus Martius Park, Detroit, Michigan 48226)

Lansing: 7:00PM (STATE CAPITOL BUILDING, Capitol Avenue at Michigan Avenue, Lansing, MI 48933)

Ann Arbor: 7:00PM (THE DIAG, Burns Park, Ann Arbor, MI 48109)

Minneapolis: 6:00PM (MINNEAPOLIS URBAN LEAGUE, 2100 Plymouth Ave N, Minneapolis, MN 55411

St. Louis: 6:00PM (GATEWAY ARCH, St. Louis 63102)

Carson City: 4:00PM (NEVADA STATE CAPITOL BUILDING, 101 N Carson St, Carson City, Nevada 89701)

Manhattan, NY: 7:00PM (TIMES SQUARE, Manhattan, NY, 10036)

Newark: 7:00PM (NEWARK CITY HALL, 920 Broad Street, Newark, New Jersey 07102)

Durham: 7:00PM (200 E. Main St. Durham, North Carolina)

Columbus: 7:00PM (GOODALE PARK, Columbus, Ohio 43215)

Cleveland: 7:00PM (CLEVELAND PUBLIC LIBRARY, 325 Superior Ave E, Cleveland, Ohio 44114)

Portland: 4:00PM (PIONEER COURTHOUSE SQUARE, 701 SW 6th Ave, Portland, Oregon 97204)

Philadelphia: 7:00PM (LOVE PARK, 1599 John F Kennedy Blvd, Philadelphia, Pennsylvania 19102)

Pittsburgh: 7:00PM (PITTSBURGH CITY-COUNTY BUILDING, 414 Grant St, Pittsburgh, Pennsylvania 15219)

Nashville: 6:00PM (801 Broadway Nashville, TN 37203 Estes Kefauver Federal Building)

Memphis: 6:00PM (Health Sciences Park Memphis, TN)

Austin: 6:00PM (TEXAS STATE CAPITOL, Outside South Gate-11th and Congress Ave.)

Salt Lake City: 5:00PM (SALT LAKE CITY COMMUNITY COLLEGE, 4600 S Redwood Rd, Salt Lake City, Utah 84123)

Seattle: 4:00PM (QUEEN ANNE BAPTIST CHURCH, 2011 1st Ave N, Seattle, Washington 98109)

Milwaukee: 5:00PM (DINEEN PARK, Milwaukee, Wisconsin)

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Jim Sinclair’s Commentary

Are you crazy? Of course screw the people and save the banks. This is the New Normal!

In the euro zone’s latest crisis, Italy is torn between saving the banks or saving its people
Quartz‎

Italy’s leaders are caught in a bind. The UK’s June vote to leave the European Union set off shockwaves across the bloc, which in turn exposed …

More news for FALL OF ROME In the euro zone’s latest crisis, Italy is torn between saving the banks or saving its people The nonnas aren’t happy. (Reuters/Alessandro Bianchi) SHARE WRITTEN BY Cassie Werber OBSESSION United States of Europe 6 hours ago Italy’s leaders are caught in a bind. The UK’s June vote to leave the European Union set off shockwaves across the bloc, which in turn exposed long-simmering weaknesses in Italy’s banks—possibly leading to the euro zone’s next crisis. The country’s biggest banks’ share prices, which were already under pressure, plummeted after the Brexit vote. Many are carrying too much bad debt that cannot be recouped. The Italian government, which has been dragging its feet on reforming its sickly financial system (paywall), might now need to step in and forestall an institutional failure that would be disastrous for the economy. But if Italy bails out the banks, it could to drag tens of thousands of ordinary Italians into the mess, too.

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Jim Sinclair’s Commentary

Not to worry, lower rates will not stimulate borrowing.

Bill Gross: The Economy Needs Credit Creation to Multiply Growth
By Surbhi Jain  | Jul 12, 2016 7:45 am EDT

Bill Gross stressed the importance of credit creation

In his Investment Outlook for July 2016, Bill Gross highlighted the importance of credit creation as the growth multiplier in the economy. Gross sees effective credit creation and velocity as the solution to current economic stagnation.

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Bill Gross has an interesting analogy

To draw home his point, Gross etched out this very interesting analogy between the economy and a game of Monopoly. He likened the $200 that players collect every time they pass “Go,” to new credit creation in the economy. According to Gross, this credit is essential for the “ongoing health of our finance-based economy. Without new credit, economic growth moves in reverse and individual player ‘bankruptcies’ become more probable.”

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The US (SPY) (QQQ) (IWM) Fed, the Bank of Japan (EWJ), and the European Central Bank (FEZ) (VGK) have all been printing enough money in the aftermath of the financial crisis of 2009 to keep their respective economic engine moving and translating to growth. The Fed alone has printed about $4 trillion in new money. However, what remains critical is whether new money has effectively translated to growth in the economy. The above table shows how recent increases in money supply, as gauged by M2, haven’t effectively translated to stock market growth in the developed market economies.

This is where credit creation becomes vital.

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Jim Sinclair’s Commentary

I think the sheep are waking up.

“Panic Buying of Food in New Jersey?”
Tuesday, July 12, 2016 6:17

“Supermarkets in northeastern New Jersey are literally swamped with customers tonight, so much so that in some locations like Hoboken, lines are literally around the store to get it! It is a rather unusual situation since there are no closures or shortages of any kind, so SuperStation95 sent one of our intrepid editors, Chris Rivera, to ask what- if anything- is going on?  He reports below:

“ShopRite in Hoboken, NJ is one of the largest supermarkets in Hudson County, and certainly the largest in this upscale, preppie, city of one square mile. Situated on the western side of the mighty Hudson River, one can see the entire New York City Skyline from just about everywhere in Hoboken.  It’s a beautiful city.

So what is it that is causing lines out the door and wrapping around supermarkets in town? Despite the huge parking lot, I had to find street parking to head over to the ShopRite. I found a space about a block away. As I approached, I could see lots of typical Hoboken folks, chatting with each other as they patiently wait to get inside. I asked a few, why the big lines? 

“Banks in Italy are collapsing” said Margarie Sytola. ”People can’t get money to buy food, the ATM’s are all out of cash.” I asked her why a banking issue in Italy would send her to the supermarket in Hoboken, NJ and she snapped back “The world is connected. What happens in Europe eventually happens here. I’m not going to be one of the people caught with nothing if the banks close.”

Jeff Charles, a nearby shopper who overheard our conversation, chimed-in. ”The banks never stopped gambling with our money after they were bailed out in 2008″ he said. ”The oldest bank in Italy, been in business since the year 1472, is going under. If a bank that old is going under, the rest don’t stand a chance” he said.

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Jim Sinclair’s Commentary

I stopped teaching it because:

As central banks buy nearly everything, technical analysis is a fraud
Submitted by cpowell on Tue, 2016-07-12 17:10.
1:07p Tuesday, July 12, 2016

Dear Friend of GATA and Gold:

Zero Hedge today reports the latest findings by Citigroup market analyst Matt King, who has determined that stock markets keep going up because selling in emerging markets has been more than offset by “a surge in net global central bank asset purchases to their highest since 2013.”

Soon, perhaps, central banks will have purchased nearly everything to maintain asset prices and prevent markets from functioning, thereby enveloping the world in “financial repression.” Or, as a high school graduate remarked at GATA’s Washington conference in 2008, “There are no markets anymore, just interventions”:

http://www.gata.org/node/6241

So what are the “technical analysts” among the financial letter writers really analyzing? Not markets but their own gullibility or that of their subscribers.

Zero Hedge’s report on King’s findings is headlined “The ‘Mystery’ of Who Is Pushing Stocks to All-Time Highs Has Been Solved” and it’s posted here:

http://www.zerohedge.com/news/2016-07-12/mystery-who-pushing-stocks-all-…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org

Posted at 7:05 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

For the uninformed, the desirability of gold hinges upon the return on investment as compared to bond yields.

More clearly, if bonds yield 2% and inflation is reported at 1%, then you are making 1% per year on your money.

However, if bonds yield only 1% and inflation is pegged at 2%, then you are losing 1% every year.

Many don’t look at this variable.

Now we all know that inflation is much greater than what the government reports (if you do any shopping).

Just imagine if the inflation genie rears its head (or the government reports more accurately), and we get inflation numbers around 5% or higher. Then 5% inflation, less 1% bond rates, yields a negative return of 4% on your savings.

That is the scenario when gold REALLY shines.

People would do well to begin focusing on this concept, not just on speculative activity or adverse political events.

Gold will no longer have a “cost of carry” with inflation higher than yields.

But harboring cash, savings deposits, bond investments, and dividend paying stocks will certainly have a high “cost of carry.”

CIGA Wolfgang Rech

Gold Is Just Getting Warmed Up: UBS Analyst
Wednesday July 13, 2016 15:08

It’s been a stellar six months for gold investors. The yellow metal has surged 28 percent year-to-date, its best first half of the year since 1974. And now there are signs that the rally is just getting started.

That’s the assessment of analysts from UBS and Credit Suisse, who see gold entering a new bull run. According to UBS analyst Joni Teves, gold could climb to $1,400 an ounce in the short term on macroeconomic uncertainty, dovish monetary policy and lower yields.

“These factors,” Teves writes, “justify strategic gold allocations across different types of investors” and should encourage hesitant investors to participate.

Already-low bond yields around the globe have fallen even further in Brexit’s wake, many of them hitting fresh all-time lows, including yields in the U.S., U.K., Germany, France, Australia, Japan and elsewhere. For the first time ever, Switzerland’s entire stock of bond yields has fallen below zero, with the 50-year yield plunging to negative 0.03 percent on July 5.

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Jim/Bill,

When you can longer convince people that gold is a bad investment, you attempt to re-direct their attention elsewhere.

In this case… diamonds.

Talk about an investment fraught with pitfalls!

-Notorious for their exorbitant premiums when you buy, and exorbitant discounts when you sell.

-Extreme difficulty in determining the quality of the product (color, clarity, carat weight, etc)

-Highly subject to geographical and political hazards

Always remember, never believe what the Street tells you.

CIGA Wolfgang Rech

Diamonds Seen as ‘Next-Best’ Commodity After Gold Rally: Chart
Joe Deaux
July 13, 2016 — 10:23 AM EDT

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Commodity investors concerned that gold’s rally will sputter may want to consider another luxury item: diamonds. With odds of a U.S. rate hike creeping higher and long positions in bullion soaring, “it may make even more sense to look at a next-best commodity exposure such as diamonds, where there has been limited investor flow and presumably less downside in case the bear case unfolds,” Citigroup Inc. analysts including Barry Ehrlich said in a note. The bank recommends shares of Alrosa, the world’s largest rough-diamond producer.

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Posted at 10:29 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

I have seen this explode before. Why not now under an economy that has by passed both groups, globally.

There is a 1% everywhere. This 1% only sees one color – green.

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Jim Sinclair’s Commentary

Spot on Ed.

“In the aftermath of the Brexit vote there is an increasing fear of other dominoes falling within the heart of the EU – the eurozone” — Societe Generale’s Albert Edwards

Albert Edwards: Brexit Is Old News, Time To Worry About Italy
Monday, July 11, 2016

There are symptoms and there is core causation to economic events. There are excuses and their area reasons why financial events unfold the way they do. Societie Generale’s Albert Edwards thinks investors need to keep their eye on the ball. Stop bemoaning Brexit. There are bigger fish to fry and issues to tackle, some of which could dramatically impact the economy and markets going forward, he wrote in a July 8 report titled “Brexit is a symptom, not the cause of our problems, but who’s next Italy?” The report comes just days after he said Brexit was an issue in the rear view mirror and pointed to other issues to focus on.

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Take emotion out of the Brexit analysis and see the real economic issues

Edwards looks at the 2008 financial crisis and says it was not Lehman Brothers that was causation. Lehman was a symptom of an economic engine already in decline. Likewise there is Brexit, an issue he notes has been accompanied by some of the most emotional ranting he’s seen – on both sides of the argument, including his own. Brexit will be used as an excuse for all sorts of economic ills, but it is only a symptom, a benchmark for a larger trend.

When he takes off the emotional hat, he says the real issue is the continued dismantling of the European Union that is upon which savvy investors should focus. There is a game of dominoes being played out and Brexit was just the latest move in a trend.

“In the aftermath of the Brexit vote there is an increasing fear of other dominoes falling within the heart of the EU – the eurozone,” Edwards wrote. “Italy is bleeping very loudly on most people’s radars with its banking crisis and impending referendum seen as leaving the country on a knife-edge.”

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Military Robotics Makers See a Future for Armed Police Robots
BY PATRICK TUCKER
JULY 11, 2016

As military-grade robotics get cheaper and more capable, someone will arm them and put them on American streets.

Robot-maker Sean Bielat says he’s fine with the Dallas Police Department’s apparently unprecedented use of a police bomb-disposal robot to kill a gunman on Thursday. “A robot was used to keep people out of harm’s way in an extreme situation,” said Bielat, the CEO of Endeavor Robotics, a spinoff of iRobot’s military division. “That’s how robots are intended to be used.”

Joergen Pedersen, the CEO of RE2 robotics and the chairman of the National Defense Industrial Association’s robotics division concurred. “If these robots are used in manners for which they were unintended, we would expect that the officers who are there to keep citizens and themselves safe would use good judgment where the application of lethal force is a last resort,” he said.

On Sunday, speaking to Face the Nation, Dallas Mayor Mike Rawlings blessed the operation. “The chief had two options and he went with this one. I supported him completely because it was the safest way to approach it,” he said.

But some ethicists are worried.

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Jim Sinclair’s Commentary

Egon von Greyerz paints a very dire picture of where the world is headed. Not the kind of image you would want for you and your family. If you expect to survive at all you need to prepare. There is no turning around. The course was set many, many years ago and it will not be changed.

DANGER: The World Is Now On The Verge Of The Largest Destruction Of Wealth In History

With the price of gold and silver surging once again, today the man who has become legendary for his predictions on QE, historic moves in currencies, and major global events, warned King World News that we are now on the verge of the largest destruction of wealth the world has ever seen.

(King World News) Egon von Greyerz:  “Investors worldwide have never faced risk of the magnitude that the world is now exposed to. But sadly, very few are aware of this unprecedented risk. For the ones who understand risk and take the right decisions, it will “lead to fortune.” Only very few will choose that route. Instead, most investors will continue to live in the hope that current trends will go on forever, but sadly these people will end up “in shallows and in miseries.”…

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Jim Sinclair’s Commentary

Regardless of what the financial TV talking heads want to communicate to you, gold is off on assumptions of higher rates due to pristine, truthful, honest economic figures from our beloved leaders’ munchkins. All Hail the BLS!

Headline Month-to-Month Payroll and Unemployment Data Are Rubbish, Heavily Skewed by Inconsistent and Not-Comparable Seasonal Adjustments

–Mr. John Williams

Jim Sinclair’s Commentary

I am sure China only made a small navigation error. After hearing this news they are packing their bags and in a hurry to leave the Island.

Beijing’s South China Sea Claims Rejected by Hague Tribunal
By JANE PERLEZ JULY 12, 2016

BEIJING — An international tribunal in The Hague delivered a sweeping rebuke on Tuesday of China’s behavior in the South China Sea, including its construction of artificial islands, and found that its expansive claim to sovereignty over the waters had no legal basis.

The landmark case, brought by the Philippines, was seen as an important crossroads in China’s rise as a global power and in its rivalry with the United States, and it could force Beijing to reconsider its assertive tactics in the region or risk being labeled an international outlaw. It was the first time the Chinese government had been summoned before the international justice system.

In its most significant finding, the tribunal rejected China’s argument that it enjoys historic rights over most of the South China Sea. That could give the governments of Brunei, Indonesia, Malaysia, Taiwan and Vietnam more leverage in their own maritime disputes with Beijing.

The tribunal also said that China had violated international law by causing “irreparable harm” to the marine environment, endangering Philippine ships and interfering with Philippine fishing and oil exploration.

“It’s an overwhelming victory. We won on every significant point,” said the Philippines’ chief counsel in the case, Paul S. Reichler.

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More cracks appear in fragile European Union
By Cory Schouten MoneyWatch July 12, 2016, 5:00 AM

With investors still trying to digest the global economic impact of “Brexit,” fears are growing about another potential fault line in the European Union: Italy’s banks.

Italian lenders are carrying some $400 billion in troubled loans, or about 20 percent of the country’s gross domestic product. That is leading some banking industry executives and economists to call for swift European intervention in Italy to avoid a banking crisis that could spread across the continent, feed into political unrest and depress global markets.

Italy’s weak economy — the country’s public debt stands at about 130 percent of GDP — and sagging productivity, coupled with Europe’s growth-stunting austerity policies, have done no favors for Italian banks. An index of Italian banking stocks has tumbled 30 percent since Brexit, as fearful investors flee the sector. Also hampering profitability are historically low interest rates and a glut of bank branches, analysts say.

Complicating any plans by Italy’s government to rescue individual banks is that European banking regulations limit the country’s ability to recapitalize its banks using taxpayer money. A bailout, though no panacea for the Italian economy, could stabilize the banking system as it works through the remnants of the global financial crisis. But the European Central Bank requires investors to accept severe losses — a so-called “bail-in” amounting to 8 percent of banks’ liabilities — before the government can invest taxpayer money.

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Jim Sinclair’s Commentary

The greatest con job in the history of man.

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July 1, 2016
Santiago, Chile

[Editor’s note: Check out Simon's video podcast of today’s Notes.]

In the late 12th century while the rest of Europe was choking on feudalism, Venice was rapidly becoming the most advanced power on the continent.

At that point Venice had already created a free society where anyone, regardless of origin or class, could work hard and prosper. It was truly the America of its day.

The Venetians were very forward thinkers. They established a very crude type of limited partnership called a commenda that formed the basis for the modern corporation.

And starting in the late 1100s, the Venetian government began issuing a unique type of sovereign debt called prestiti. 

Prestiti were among the earliest form of institutionalized government bonds.

And in their incredible book A History of Interest Rates, authors Sydney Homer and Richard Sylla show these Venetian government bond yields ranged between 5% and 22% for several centuries.

This set the standard for government bonds for the next eight centuries

When the first Dutch bonds were issued in 1517, almost 500 years ago, yields were roughly 20%.

And over the last several centuries, government bond yields around the world typically stayed in a range between 5% and 15%.

That’s the real long-term average… the range that you could consider ‘normal’ for government bonds.

Yet today’s government bond yields are near zero. And in many respects, less than zero.

This essentially means that investors who buy these government bonds are absolutely guaranteed to lose money if they hold to maturity.

This is absolutely insane. If you’re guaranteed to lose money, a bond is no longer a safe haven. It’s not even an investment anymore. It’s just pure insanity.

Barely a month ago I told you how the total size of all the government bonds around the world with negative yields had reached an astounding $10.4 trillion.

That’s an enormous figure. But what was really alarming was how fast the number is growing.

In February 2015, less than 18-months ago, there were $3.6 trillion worth of government bonds around the world that had negative yields.

A year later in February 2016, it had grown to $7 trillion.

By May, $9.9 trillion. Last month, $10.4 trillion.

But just in the last 30 days, the worldwide total of government bonds with negative yields grew $1.4 trillion in just one month to $11.7 trillion.

That’s astonishing. $11.7 trillion is larger than the GDP of China!

We’ve seen this movie before. It was only eight years ago that the financial system was engaged in the same kind of insanity.

Banks had spent years making massive home loans at ultra-cheap interest rates to borrowers with pitiful credit, in many cases with absolutely no money down.

Unsurprisingly, the old adage eventually came true: if you owe the bank $100,000 and can’t pay, you have a problem. If a million people owe the banks $100,000 and can’t pay, the banks have a problem.

Well, the subprime borrowers couldn’t pay, and the banks ended up with a huge problem.

The subprime housing bubble, in fact, almost caused an all-out collapse of the financial system.

Now here’s the important part: back then, the total size of the subprime bubble was ‘only’ $1.3 trillion.

Today’s negative interest rate bubble is NINE times the size of the 2008 subprime crisis.

Now, I don’t see a whole lot of difference between 2008’s subprime home loan borrowers, versus 2016’s subprime government borrowers.

Neither borrower has the financial means to repay its debts.

Back in 2008 the banks loaned money to subprime borrowers under the false premise that ‘home prices always go up.’

Today investors buy the bonds of subprime governments based on the false premise that ‘governments always pay their debts.’

Both assumptions are completely absurd and defy even the most cursory lessons of financial history.

History, in fact, teach us that anytime financial markets engage in such reckless, irresponsible behavior, a crisis almost invariably ensues.

Ask yourself a question: does it really make sense that woefully bankrupt countries (like Japan, with its national debt exceeding 1 QUADRILLION yen) are able to borrow money and issue bonds with negative yields?

Do we really expect that this subprime government bond bubble, whose rate of expansion is accelerating, can continue to get bigger and bigger without consequence forever?

Would you take your hard-earned savings and buy some bankrupt government bond where you’re guaranteed to lose money?

If not, then ask yourself one more question:

Whose money do you think the banks are using to buy these bonds?

Why, yours, of course.

Banks don’t use their own money to buy government bonds. They use your money.

So if you’re thinking, ‘big deal, I don’t own any of these government bonds,’ guess again. If you have money tied up in the banking system, you’re exposed.

The entire financial system is exposed, just like the entire financial system was exposed to the 2008 subprime crisis.

Look, no one has a crystal ball. This bubble could continue to expand for weeks, months, or even years.

But in the face of such complete insanity, it certainly makes sense to take some basic precautions to limit the impact on your own life.

Whenever you get in your vehicle, you know there’s a bunch of crazies out on the open road.

That’s no reason to panic or live your life in fear. Instead, we take some very basic precautions. We put on a seatbelt.

It’s pretty clear there’s a bunch of crazies in the financial system as well. So put on your seatbelt.

Consider, for example, holding some physical cash instead of keeping 100% of your funds in the banking system.

Own some real assets like gold and silver.

There are plenty of options available to reduce this risk. Just don’t ignore this bubble… because the bigger it becomes, the more severe the consequences when it burst

Enjoy your weekend, 

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Simon Black
Founder, SovereignMan.com

Posted at 9:30 AM (CST) by & filed under Jim's Mailbox.

Hi Jim and Bill,

Oklahoma sure gives the GOTS formula meaning in ways we didn’t expect.

CIGA TPJ.

“If you didn’t think we live in a Police State watch even part of this”

Posted at 3:26 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Gold loves negative interest rates.

Japan’s Gold Sales Jump Thanks to Abenomics Worries
By Aya Takada and Yumi Ikeda
July 11, 2016 — 9:01 AM MDT Updated on July 11, 2016 — 7:25 PM MDT

Tetsushi Kudo, a 50-year-old office worker, bought a one-ounce gold coin this month for the first time. With stocks slumping and zero percent interest on savings, he says it won’t be the last.

“I want to buy gold every year as a birthday present for my daughter,” Kudo said at a store in Tokyo’s posh Ginza district where he made the 162,000 yen ($1,600) purchase. “She will thank me for the gift when she grows up because gold will have value wherever she goes.”

Individual investors like Kudo drove a 60 percent jump in sales of the precious metal in June from May at Tanaka Holdings Co., the operator of Japan’s largest bullion retailer, as the yen’s rebound against the dollar made it more affordable. While Prime Minister Shinzo Abe’s ruling party scored a convincing victory in July 10 upper house elections, confidence in his economic policies is flagging. A July 2-3 Asahi newspaper poll showed 55 percent of those surveyed support a new direction versus 28 percent for maintaining course.

Strong Yen

The yen’s 20 percent gain this year is a reflection of Japanese investors fleeing from overseas markets due to pessimism about global growth rather than confidence in their own economy. Gold sales more than tripled at Tanaka’s shops on June 24, when the Japanese currency jumped to an almost three-year high against the dollar after the U.K. decided to exit the European Union. Japan’s Topix stock gauge dropped the most in five years the day after the Brexit referendum, while 10-year sovereign bond yields tumbled further below zero.

“For investors, buying gold is similar to casting a no-confidence vote,” said Itsuo Toshima, 68, an investment adviser and former regional manager for the World Gold Council in Tokyo. “Gold is the unprintable currency, unlike the yen. The yen’s appreciation in spite of the adoption of the negative-rate policy has kindled skepticism about the policy’s benefits. It’s also led to investors seeking to protect their assets in case Abenomics fails.”

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Jim Sinclair’s Commentary

Mr. Stockman clearly defines the reality of the mechanism supposed to save the global financial world from decay, decline and eventual collapse. Rather it works to guarantee that equation.

Bernanke’s Black Helicopters Of Money
New York City, New York
July 11, 2016

Ben Bernanke is one of the most dangerous men walking the planet. In this age of central bank domination of economic life he is surely the pied piper of monetary ruin.

At least since 2002 he has been talking about “helicopter money” as if a notion which is pure economic quackery actually had some legitimate basis. But strip away the pseudo scientific jargon, and it amounts to monetization of the public debt—–the oldest form of something for nothing economics.

Back then, of course, Ben’s jabbering about helicopter money was taken to be some sort of theoretical metaphor about the ultimate powers of central bankers, and especially their ability to forestall the boogey-man of “deflation”.

Indeed, Bernanke was held to be a leading economic scholar of the Great Depression and a disciple of Milton Friedman’s claim that Fed stringency during 1930-1932 has caused it. This is complete poppycock, as I demonstrated in The Great Deformation, but it did give an air of plausibility and even conservative pedigree to a truly stupid and dangerous idea.

Right about then, in fact, Bernanke grandly promised during a speech at Friedman’s 90th birthday party that today’s enlightened central bankers—led by himself—-would never let it happen again.

Presumably Bernanke was speaking of the 25% deflation of the general price level after 1929. The latter is always good for a big scare among modern audiences because no one seems to remember that the deflation of the 1930’s was nothing more than the partial liquidation of the 100%-300% inflation of the general price level during the Great War.

In any event, Bernanke was tilting at windmills when he implied that the collapse of the US wartime and Roaring Twenties boom had anything to do with the conditions of 2002. Even the claim that Japan was suffering from severe deflation at the time was manifestly false.

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Jim Sinclair’s Commentary

As always, the best defense against the global uncertainty are gold and silver holdings. Compliments of CIGA Wolfgang.

Gold And Silver – Be Afraid, At The Very Least Be Wary
Jul 11, 2016 – 09:27 PM GMT
By: Michael Noonan

BREXIT opened a Pandora’s Box for the EU. Will the globalists shut it closed and then reseal it for generations to come? Something may be rotten in the state of Denmark, but the stench emitting from Brussels has been overpowering Europe. People in the Western world are being manipulated each and every day by the elite’s mainstream press with everything that can be construed as potentially negative that stems from BREXIT as a scapegoat.

The world is drowning in debt created by the central bankers and force-fed to states like a goose being fattened for foie gras. Always, always follow the money. Almost everything wrong in the world today can be traced to debt, debt that has been foisted upon states and people by bankers for the sole purpose of enriching only the shadow globalists. At the end of the day, the tab gets passed onto everyone else to pay. That is the sole purpose of the bail-outs and bail-ins. Nothing else, not even you, matters to the elites.

Where did all of the trillions and trillions of newly created “money” go? Back to repay the banks that loaned it out at interest. Greece is a perfect example. Where did most of the Greek bail-out money go? Not to the nation. Not to the state. Not to the people. Almost all of it went to repay the bank loans, and not from Greek banks, but from the elite’s IMF.

Britain voted to exit via a popular vote from the people, for those running the government had been vehemently opposed to leaving the European Union. The more pertinent question is, will Britain ever leave? A much lesser important question most have been asking is, what will be the effects of BREXIT? The outcome will be determined by the elites using their ubiquitous Problem-Reaction-Solution formula. If Britain does not leave, take that as your cue that it is game over for people and the NWO has won.

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Posted at 2:23 PM (CST) by & filed under Jim's Mailbox.

Jim and Bill,

I thought you both might be interested in this presentation by the CFA Institute Contemplating the End of Fractional Reserve Banking in Switzerland.

Although this initiative seems like a long-term positive, particularly if it spreads to other countries, how can the bankers let this pass unless a majority of the voters truly see the damage from all the debt? Passage would be very inhibiting to the life of a corporate banker, don’t you think?

Best regards,
CIGA Bob

Posted at 2:06 PM (CST) by & filed under In The News.

Bill Holter’s Commentary

Begging?

Deutsche Bank’s Chief Economist Calls For €150 Billion Bailout Of European Banks
by Tyler Durden

Jul 10, 2016 10:42 AM

The cards have been tipped, and it appears Italy’s Prime Minister may have been right.

In the aftermath of Brexit, much of the investing public’s attention has turned to Italian banks which are in desperate need of a bailout as a result of €360 billion in bad loans growing worse by the day (and not a bail-in, as European regulations mandate, as that would lead to an immediate bank run) to avoid a freeze and/or collapse of Italy’s banking sector. This has pushed stock prices – and default risk – on Italian banks to record levels. So far Italy’s bailout requests have mostly fallen on deaf ears, as Germany’s political leaders have resisted Renzi’s recurring pleas for a taxpayer funded rescue. However, as we have alleged, and as the Italian Prime Minister admitted last week, the core risk for Europe is not just the Italian banking sector but the biggest bank of all in Europe: Deutsche Bank.

Recall last Thursday, when speaking at a joint news conference with Swedish Prime Minister Stefan Lofven, Matteo Renzi said other European banks had much bigger problems than their Italian counterparts.

“If this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to one hundred,” Renzi said.

He was, of course, referring to the tens of trillions of derivatives on Deutsche Bank’s books.

Today, we got the most definitive confirmation yet that the noose is tightening not only around Italy, but Germany itself (where as we reported on Thursday, Europe’s Bank Crisis Arrives In Germany as €29 Billion Bremen Landesbank On The Verge Of Failure) when none other than David Folkerts-Landau, the chief economist of Deutsche Bank, has called for a multi-billion dollar bailout for European banks.

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Wall Street Monkeyshines — Look Ma, No Hands!
July 10, 2016
David Stockman

The boys and girls on Wall Street are now riding their bikes with no hands and eyes wide shut. That’s the only way to explain Friday’s lunatic buying spree in response to another jobs report that proves exactly nothing.

When the S&P 500 first hit 2130 back in May 2015, reported LTM earnings were $99.25 per share, and that was already down 6.4% from the cyclical high of $106 per share in September 2014. Thus, stocks were being valued at a nosebleed 21.5X in the face of falling earnings.

During the four quarters since then, reported LTM earnings have slumped by a further 12.3% to $87 per share. So that brings the “cap rate” to 24.5X earnings that have shrunk by 18% over the last six quarters. Wee!

You have to use the parenthetical because the casino is not capitalizing anything rational. It’s just drifting higher in daredevil fashion until something big and nasty stops it.

That something would be global deflation and US recession. Both are racing down the pike at accelerating speed.

Needless to say, when these lethal economic forces finally hit home, the puppy pile-up on Wall Street is going to be one bloody mess. But that’s the price you pay when you have destroyed honest price discovery entirely, and have transformed the money and capital markets into robo-machine driven venues of rank speculation.

Janet Yellen and the other 100 clowns who run the world’s central banks, of course, have no clue as to the financial doomsday machine they have enabled. Indeed, they apparently think efficient pricing and allocation of capital doesn’t matter.

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Jim Sinclair’s Commentary

I love Mr. Williams’ comments on the employments figures.

- Headline Month-to-Month Payroll and Unemployment Data Are Rubbish, Heavily Skewed by Inconsistent and Not-Comparable Seasonal Adjustments
- Private Surveying Shows Plunging Employment Circumstances Last Seen During the 2009 Economic Collapse – June 2016 Unemployment Rates: U.3 Rose to 4.9%, but U.6 Notched Lower to 9.6% and the ShadowStats-Alternate Rate Eased to 22.9%
- The Fed Will Not Buy These Numbers, Legitimately
- Annual M3 Growth Jumped to 4.5% in June 2016, from 4.3% in May; While the Monetary Base Shrank a Bit

“No. 819: June Employment and Unemployment, Money Supply M3″
PDF: http://www.shadowstats.com

 

Jim Sinclair’s Commentary

This picture from Mr. Celente speaks to many things including the age (how old you are) for trading gold as a commodity, not insurance.

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Bill Holter’s Commentary

What used to be good and positive is now bad and negative… faith in God, being productive, being a patriot, respecting the Constitution and the Rule of Law that flows from it all, according to our political leaders, make us dangerous, negative citizens. What they really mean is that people who seek the truth and do not accept political correctness have figured out that politicians get to define what is or is not politically correct and they always define it as something that hides their unlawful behavior and benefits them and their objective of global governance.
–Marilyn M. Barnewall

FIRST THE BANKS WERE TOO BIG TO FAIL, NOW HILLARY IS TOO BIG TO JAIL
By Marilyn MacGruder Barnewall
July 10, 2016
NewsWithViews.com

…and what happened in the beautiful city of Dallas, Texas, is an apt reflection of what happens when a nation loses its Rule of Law.

We have Hillary Clinton with a lifelong record of lies, surrounded by criminals and conduct that makes her own involvement questionable. We have Bill Clinton who is one of the worst womanizers ever born and a man who has been involved with the Bush cabal since the 1980s… a man guilty of perjury and other felonies, a man who pardoned some of the biggest criminals in the world… like Marc Rich, a world class money launderer (after Rich’s wife contributed a quarter of a million dollars).

We have an Attorney General under the Clinton Administration that sends Army tanks to kill women and children in David Koresh’s Waco headquarters. That same Clinton Attorney General’s office on August 22, 1992 sent FBI agents to Idaho where they killed a totally innocent woman named Vicki Weaver. She had her baby in her arms while standing at the front door of her home. The FBI shot and killed a young boy, too – the son of the Weavers. The agent who shot Vicki was promoted, as I recall.

We had a Secretary of State whose greatest achievement during her term of office was a total lack of achievement of anything positive and a trail filled with apparent errors and missteps. The information about Benghazi is pretty clear and Congressman Trey Gowdy’s Investigative Committee did a good job of identifying evidence the mainstream media refuses to publish – but no legal action is taken. Welcome to the world of how the social order works when tyranny rules and the Rule of Law is trashed. Gowdy, a very popular Congressman from South Carolina, then announces he will not run for re-election. Gee, I wonder why.

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