Posted at 12:58 PM (CST) by & filed under Bill Holter.

Dear CIGAs,

For more than three years we have watched the COMEX very closely. The initial clue to begin watching were the waterfall events where the amounts of paper gold and silver sold simply dwarfed what was being mined. I have said many times after the smackdowns, “first, no one has this much (gold or silver), second, no trader would ever sell in this fashion and destroy the price he will receive for the sale. Clearly the sales were done to affect price downward”. Each time I have written on this topic and suggested it would ultimately end with a delivery default I have been trolled. It looks very much like we will soon find out a default of delivery is not only possible but highly probable.

Starting with gold, last month (May) saw 221,000 ounces stand for delivery. This amount actually grew during the month which is highly unusual as the amount standing has ALWAYS dropped during delivery periods, this is the first time to my knowledge that the amount standing actually increased. For comparison, May 2015 delivered only 2,500 ounces. Looking back at June of 2015, the amount standing on first notice day was 509,000 ounces. The final amount delivered was 295,000. As I have written and questioned before, who would fully fund their account 100% to take delivery …and then “go away”? The answer of course is someone willing to accept a “premium” as a bribe to not take delivery.

This June as you know does look to be quite interesting. The initial amount standing was 49.119 tons or over 1.5 million ounces. The amount dropped on day two by about 4 tons but has since gained back nearly all of it to stand at 49.11 tons. (If I am not mistaken, this month is the largest month of gold contracts ever standing for delivery.) Over 40 tons have already been served so we know these longs could not be persuaded to “go away”. We have seen no evidence of delivery for March, April or May. If we add these together with June, we have 65.813 tons standing with only 51.12 tons of registered gold.

My point is this, someone very real and very big is standing for gold. This “someone” would not be bribed to go away last month and does not look like they will go way this month! Who is this long who all of a sudden cannot be bribed to stand down? As you know, I have speculated the Chinese (and Russia) have been positioning themselves to abandon the dollar as the reserve currency. I theorized nearly two years ago it was the Chinese who held the long month after month and rolled them …until they won’t and then demand delivery. I still believe this is the case as the open interest in silver has stayed so high, only pockets as deep as a sovereign could have sustained the losses. It also needs to be said again, no market has ever seen open interest expand to all time record highs …while the price was plumbing multi year lows. A reconciliation will come at some point, either open interest needs to be washed out or price skyrockets, one or the other.

Looking specifically at silver, we have a true potential atomic bomb in the works for July. COMEX claims to have 22,482,000 ounces registered and available for deliver. This number is an ALL TIME low for “registered” ounces. To put this number in perspective, it is less than $400 million dollars and only about 10 days of global production. Also in perspective, customers have already withdrawn 12,244,000 ounces of silver in just the first 8 days of June! Finally, the real shocker is the July contract. First, the open interest for July of over 107,000 contracts is more than 50% of the entire open interest. This represents over 536 MILLION OUNCES! Do you realize this amounts to over 60% of total global production on just one bourse and in just one single month? Obviously there will not still be 536 million ounces standing for delivery by July 1st, but as it stands now there are contracts open to deliver 24 ounces for every 1 ounce registered for delivery.

So, is a delivery default here and now in June or July? I am sure I will hear “they will never default, they will cash settle”. “Cash settlement” IS default, please do not delude yourself into thinking it isn’t. If you believe cash settlement is OK, what will you think AFTERWARDS when your cash will not buy metal? There is no way to tell if it is here and now but it certainly looks possible. Something has definitely changed. The longs of the past who would stand on first notice day only to mysteriously disappear during the delivery period seem to have changed or …are now different entities. It is clear by looking at past deliveries and current inventories that COMEX is not meant to be a major delivery hub. It has been “used” to “price” gold even though very little real metal changed hands. I believe this is about to change as actual gold being traded will become the pricing mechanism. The about face in the price action over the last six months and now the amounts standing tell you something very big is afoot. We already know that physical metal has been moving from West to East for years. I believe we are about to find out the pricing mechanism itself is being moved from West to East. Stay tuned!

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome

Posted at 12:56 PM (CST) by & filed under In The News.

To help save the economy, the Government will announce next month that the Immigration Department will start deporting seniors (instead of illegals) in order to lower Social Security and Medicare costs.

Older people are easier to catch and will not remember how to get back home.



Jim Sinclair’s Commentary

Do you get a feeling that someone really wants war this year?

U.S. Carrier’s Moves Send Message to Russia
Tamer El-Ghobashy

ABOARD THE USS HARRY S. TRUMAN—This 20-story-tall aircraft carrier with a crew of 5,000 made an unplanned diversion from the Gulf to the eastern Mediterranean last week—a quick pivot intended to send a clear message to Russia.

The massive ship serves as a launching point for a near-constant barrage of airstrikes on Islamic State targets in Iraq and Syria. Since November, it has accounted for a little more than half of the total sorties flown over those two countries by the U.S. military.

Rear Adm. Bret Batchelder, the highest-ranking officer on the carrier, told visiting reporters this week that moving the “capital ship” of the U.S. Navy from the Gulf through the Suez Canal is a flexing of muscle meant to reassure North Atlantic Treaty Organization allies of the American commitment to maintaining the balance of naval power in the Mediterranean.

“It is a demonstration of capability. That’s for sure,” he said. “There are undoubtedly folks who are watching that and this is just a graphic representation of what we’re capable of.”

The repositioning of the USS Harry S. Truman provides a window into American military strategy at a time when Russia has asserted itself aggressively in the region, using its navy and air force to turn the tide of the five-year Syria conflict in favor of President Bashar al-Assad.



Jim Sinclair’s Commentary

Now the key question is what does the Fed model show. I suspect the opposite.

What happens when the model junkies see their beloved predictors disintegrate?

WSJ Survey: Economists Sharply Lower Estimates of Job Growth in the Next Year
Forecasters see U.S. adding 155,000 jobs a month in next 12 months, down from 180,000 in May poll
By Josh Zumbrun
June 9, 2016 10:00 a.m. ET

The job gains of recent years, when the economy routinely added more than two million jobs annually, may be a thing of the past.

Forecasters have sharply lowered their expectations for job growth in the coming year after employers added just 38,000 jobs in May, according to The Wall Street Journal’s latest survey of academic, business and financial economists.

They now expect the economy will add about 155,000 jobs a month over the next year, a pace of about 1.9 million annually. That is the third consecutive month of lowered expectations for the jobs outlook. Their estimates fell from about 180,000 in May, 185,000 in April and 190,000 in March.

If their forecast proves correct, it would be the worst year for job growth since 2010.

“The economy right now is navigating this period where there’s going to be lower growth overall and lower profit margins,” said Brian Bethune, an economist at Tufts University.

The economy has posted steady job growth for most of the past six years, even though overall economic output as measured by gross domestic product was growing more slowly than expected. Both measures are expected to be slower in the year ahead.

That deterioration in the labor market is likely to keep the Federal Reserve on hold when officials gather next week. Many economists earlier had expected the central bank to raise interest rates in June, but now about 52% believe they will wait until July and 30% until September.

In addition to the weaker labor market, many economists are worried about what could happen if the United Kingdom votes to leave the European Union on June 23. Such a decision, known as Brexit, from British voters could cause an unraveling of many trade arrangements and jolt financial markets.


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

Jim Sinclair’s Commentary

Everything that seems smart may or may not be.

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

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

Herein is the ultimate black swan.



Jim Sinclair’s Commentary

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

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

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

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

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



Bill Holter’s Commentary

A very good explanation of China and silver.

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


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


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

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

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

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

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

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


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

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

Dear Friend of GATA and Gold:

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

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

The prospectus provides a few interesting and even amusing details:

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

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

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

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

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

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

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

Dear CIGAs,

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

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

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

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

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

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

What comes next when both start to misfire badly?

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

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

Jim Sinclair’s Commentary

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

Panama Papers Show How Rich United States Clients Hid Millions Abroad

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

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

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

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

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

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


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

Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

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

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


Jim Sinclair’s Commentary

From our friend down under, Dismal Dave.

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