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

Jim Sinclair’s Commentary

Politically good for Israel and negative to our intention of freezing Israel out on the Iran deal.

King Salman of Saudi Arabia pulls out of US talks on Iran
Barack Obama hoped to use summit at White House and Camp David to reassure Saudi monarch about nuclear deal with Iran
Ian Black Middle East editor
Monday 11 May 2015 07.08 EDT Last modified on Monday 11 May 2015 07.42 EDT

King Salman of Saudi Arabia has withdrawn from a carefully orchestrated summit with the US that President Barack Obama hoped would assuage Gulf anxieties about the conclusion of a nuclear agreement with Iran.

The monarch had been expected to join other heads of state from the six Gulf Cooperation Council countries at an unprecedented meeting at the White House and a day of talks at the presidential retreat at Camp David. Now the only leaders attending will be the emirs of Qatar and Kuwait.

The deal with Iran, Saudi-led attacks on Houthi rebels in neighbouring Yemen and the crises in Syria and Iraq made for a difficult and crowded agenda.

The summit, scheduled for Wednesday and Thursday, follows months of tension and intensive US diplomacy designed to persuade Riyadh and its neighbours that Washington is not abandoning its Gulf allies in order to normalise relations with Tehran.

Salman will be represented instead by the newly appointed Saudi crown prince, Mohammed bin Nayef, the darling of western countries and the first of the younger generation of Saudi royals to look likely to ascend the throne. The king’s son and Saudi defence minister, Mohammed bin Salman – who is running the campaign of air strikes in Yemen – will also be there.

Obama had been expected to make a renewed effort to help the GCC states create a regional defence system to guard against Iranian missiles. The Saudis and others appear to accept that a nuclear agreement is inevitable but are keen to extract guarantees that their interests will not be harmed by it, diplomats say.

More…

 

Jim Sinclair’s Commentary

I would like to be a fly on the Wall in the room these conversations will take place.

US Secretary of State Kerry traveling to Russia, set to meet Lavrov, Putin
Published time: May 11, 2015 12:17
Edited time: May 11, 2015 14:10

US Secretary of State John Kerry is planning a trip to Sochi on Tuesday, where he is expected to meet Russian President Vladimir Putin and Foreign Minister Sergey Lavrov. The three men are to discuss the situation in Ukraine, Yemen, Iraq and Syria.

The trip has been confirmed by Russian and US officials.

"This trip is part of our ongoing effort to maintain direct lines of communication with senior Russian officials and to ensure US views are clearly conveyed," State Department spokeswoman Marie Harf said in a written statement.

Russia’s Foreign Ministry said that Moscow is ready for the dialogue with Washington.

Russia is "open for cooperation [with the US] on the basis of equality, non-interference in internal affairs, and taking Russian interests into account without attempts to pressure us,“ the ministry said in a statement.

Earlier, RIA Novosti news agency quoted a Russian diplomatic source as saying that Kerry’s arrival was "very symbolic,” since the top US diplomat had canceled the trip several times.

This will be Kerry’s first visit to Russia since the outbreak of the crisis in Ukraine in November 2013.

Lavrov and Kerry met last in March during the Iran nuclear talks in Switzerland’s Lausanne, where several world leaders were working hard to hammer out a final decision on Iran’s nuclear program before a looming deadline of March 31.

More…

Jim Sinclair’s Commentary

World Bank and IMF – here starts the competition.

India announces first BRICS Bank President
May 11, 2015, 10:12 am

Ahead of the 7th BRICS Summit in Russia, the Indian government on Monday announced the appointment of Indian banker Kundapur Vaman Kamath as president of the $100 billion New Development Bank being set up by the BRICS. Kamath has earlier worked with the Asian Development Bank and was the FORBES ASIA’s 2007 Businessman of the Year.

The BRICS Bank launched last year will fund infrastructure projects in Brazil, Russia, India, China and South Africa, and challenge the dominance of the Western-led World Bank and the IMF.

The bank is likely to be operationalised within one year, Finance Secretary Rajiv Mehrishi said.

Russian Finance Minister Anton Siluanov will become the bank’s first Chairman of the Board of Governors, while the first chairperson of the Board of Directors will be Brazilian. South Africa will establish an African regional center for the bank.

Leaders of of BRICS had in 2014 reached an agreement to establish the New Development Bank, with its headquarters in Shanghai. Russia’s Finance Minister Anton Siluanov told reporters after the Summit in Brazil that the BRICS decided in favor of Shanghai because the city offers better infrastructure, opportunities to capture private funding, and is home to more investors than the competitors.

South African Trade and Industry Rob Davies said last year that although the capital of the New Development Bank and the Contingency Reserve Arrangement had been set at $100 billion each, this did not mean that this capital would necessarily be held in US dollars.

“We want to move away from the same old, same old way of doing things. What currencies the capital will be held in is something that will be part of the Sherpa process with the pace set by Brazil, but we expect substantive progress by the time of the next BRICS summit in Russia in June 2015,” he said.

The BRICS combined GDP grew 300 per cent in the last decade as opposed to 60 per cent growth registered by the developed world.

More…

 

Jim Sinclair’s Commentary

Would you welcome this to your neighborhood?

Texas bristles at Obama’s ‘invasion’
Demetri Sevastopulo in Washington

President Barack Obama plans to launch a military operation this summer that will see the special forces which killed Osama bin Laden team up with Walmart to take over Texas.

The invasion will also target the Mormon stronghold of Utah and an “insurgent pocket” in California. But the main thrust will be in Texas where 1,200 special forces — Army Green Beret forces to Navy Seals — will try to reclaim the state that voted for Mitt Romney in the 2012 election.

As the US focuses on the threat from the Islamic State of Iraq and the Levant (Isis), anti-Obama groups have been fanning the flames of conspiracy over Jade Helm 15, a long-planned military exercise to let troops “practise core special warfare tasks, which help protect the nation against foreign enemies”.

Mr Obama is no stranger to conspiracy theories — for instance, Donald Trump claiming that he was not born in the US and so not qualified to occupy the White House.

The former “Republic of Texas” has also had one of the strongest streaks of independence in the US since it was annexed in 1845, making the “Lone Star” state ripe for conspiracy tales involving the federal government.

But the latest intrigue took on a new dimension when Greg Abbott, the new Republican governor of Texas, ordered the State Guard, a branch of the Texas state military, to monitor Jade Helm on the grounds that it was “important that Texans know their safety, constitutional rights, private property rights and civil liberties will not be infringed”.

Ted Cruz, the Texas senator running for president, said while he was not concerned about Jade Helm, the anxiety was valid because “we have seen, for six years, a federal government disrespecting the liberty of the citizens”.

But Mr Abbott’s move sparked criticism from mainstream Republicans and people surprised that he would lend credence to rumours.

More…

Posted at 3:32 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Great news for the aging. There is no retirement possible at 80 or 90. We work until we drop at ever decreasing pay then get incinerated and scattered because it is cheaper than a box and permanent care real estate and a stone.

"Hope and Change" was not kidding

Old Workers Hit New All Time High As All April Jobs Go To The "55 And Older"
Submitted by Tyler Durden on 05/08/2015 10:30 -0400

Earlier we reported that all the jobs added in April were part-time, or over 400,000, while full-time jobs decreased by over 200,000 pushing them further under the pre-recession peak. Here is another stunning data point: while it has been no secret that ever since the quote-unquote recovery virtually all job gains have gone to older workers, those 55 and over and ever closer to retirement, April merely confirmed this demographically disastrous trend, and of the 255K workers added in the household survey when broken down by age group, more than all, or 266K went to workers aged 55 and older also known as the age cohort which is realizing it is never going to retire under the Fed’s centrally-planned regime.

clip_image001

And while the old workers rose to a new all time high of 33.379 million workers…

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Working Americans in their prime career years, those aged 25-54 once again declined, this time by 19,000 in the month of April. And, as the next chart shows, just like full-time jobs have been unable to rise above the last-recession highs, so the number of workers aged 25-54 are now 4 million below the prior peak.

clip_image003

Finally, before anyone blames the collapse in prime-age jobs and the surge in "old" jobs on demographics and a drop in the participation rate for America’s oldest workers, here is the bitter truth: increasingly old Americans are forced to work well into their retirement years not because they want to but because they have no choice, thanks to the Fed’s ZIRP policy which has destroyed any retirement value their savings may have had.

More…

Jim Sinclair’s Commentary

Riot over business recovery benefiting only Bankers.

UK election: Riot erupts in London against re-election of Conservative prime minister David Cameron

A protest has erupted in central London against the re-election of Britain’s Conservative prime minister David Cameron, with demonstrators throwing bottles, cans and smoke bombs at riot police.

Scuffles broke out when the anti-austerity demonstrators, blaring hooters, banging pots and chanting obscenities, confronted lines of police outside the gate leading to the prime minister’s Downing Street residence. At one point a bicycle was hurled at police.

Police arrested 17 people, and four police officers and one member of police staff were injured during the protest, a Scotland Yard spokesman said.

A Reuters photographer estimated that a couple of hundred people took part in the protest, including a group of about 25 black-clad youths with sunglasses and face masks.

He said police briefly closed the central Whitehall Avenue to traffic but later reopened it and surrounded the last remaining group of several dozen protesters.

Anti-Tory graffiti was also daubed on a war memorial honouring the women of WWII in what the Royal British Legion called a "senseless act".

Greens party activist Elliot Corner said the UK needed a proportional representational system.

"We are here because we’ve seen bankers get off scot-free while the working people are the only people who’ve been punished under the rabid schemes of prosperity," he said.

Mr Cameron, whose government has enacted tough spending cuts to bring down the budget deficit and promised more to come, won a second five-year term in Thursday’s election with an outright majority in parliament.

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Jim Sinclair’s Commentary

Why is this negotiation process kept top secret while it will have an impact on all of us?

A Multinational Trojan Horse: The Trans-Pacific Partnership
Submitted by Tyler Durden on 05/09/2015 20:45 -0400

Submitted by Dave Pruett via Like The Dew blog,

“The accumulation of all powers, legislative, executive, and judiciary, in the same hands, … may justly be pronounced the very definition of tyranny.” – James Madison in The Federalist Papers.

You don’t have to know much about the “trade” deal called the Trans-Pacific Partnership (TPP) to be more than a little suspicious.

First, there are the very peculiar bedfellows. Supporting the TPP are President Obama and most Congressional Republicans, the same Republicans who’ve vehemently opposed his every initiative for the past six and one-half years.

Against the TPP are most (but not all) Congressional Democrats, Ford Motor Company, virtually all trade unions and environmental groups, watchdog groups such as Public Citizen, and usual Obama allies such as Massachusetts Senator Elizabeth Warren and Ohio Senator Sherrod Brown, who, in a testy open letter to the President on April 25, called for greater transparency on the TPP.

Furthermore, when asked to lend his support for so-called “Fast Track” authority for the TPP, Obama water-carrier and former Senate Majority Leader Harry Reid chafed, “So the answer is not only no, but hell no.”

Also opposed: liberal icon Noam Chomsky, Democratic presidential hopeful Bernie Sanders, Republican hopeful Mike Huckabee, many Tea-Party groups, and conservative Republican editorialist and former presidential candidate Patrick Buchanan. Conspicuous by silence: Hillary Rodham Clinton.

What’s going on here? Why the strange alliances?

Peel back the layers of the TPP and you’ll find what some believe to be a “corporate Trojan horse.” Disguised as “free trade,” the TPP’s provisions and tactics undermine Constitutional safeguards and national sovereignty. But there’s also a silver lining. The TPP exposes who, in the marbled halls of political power, is working for whom. It forces politicians to put their cards on the table, and by their hands you will know them.

More…

Jim Sinclair’s Commentary

This is not only occurring in the USA.

Economic Disinformation Keeps Financial Markets Up
Paul Craig Roberts

May 8. Today’s payroll jobs report is more of the same. The Bureau of Labor Statistics claims that 223,000 new jobs were created in April. Let’s accept the claim and see where the jobs are.

Specialty trade contractors are credited with 41,000 jobs equally split between residential and nonresidential. I believe these are home and building repairs and remodeling.

The rest of the jobs, 182,000, are in domestic services.

Despite store closings and weak retail sales, 12,000 people were hired in retail trade.

Despite negative first quarter GDP growth, 62,000 people were hired in professional and business services, 67% of which are in administrative and waste services.

Health care and social assistance accounted for 55,600 jobs of which ambulatory health care services, hospitals, and social assistance accounted for 85% of the jobs.

Waitresses and bartenders account for 26,000 jobs, and government employed 10,000 new workers.

There are no jobs in manufacturing.

Mining, timber, oil and gas extraction lost jobs.

Temporary help services (16,100 jobs) offered 3.7 times more jobs than law, accounting architecture, and engineering combined (4,500 jobs).

More…

Saudi Arabia Says King Won’t Attend Meetings in U.S.
By HELENE COOPERMAY 10, 2015

WASHINGTON — Saudi Arabia announced on Sunday that its new monarch, King Salman, would not be attending meetings at the White House with President Obama or a summit gathering at Camp David this week, in an apparent signal of its continued displeasure with the administration over United States relations with Iran, its rising regional adversary.

As recently as Friday, the White House said that King Salman would be coming to “resume consultations on a wide range of regional and bilateral issues,” according to Eric Schultz, a White House spokesman.

But on Sunday, the state-run Saudi Press Agency said that the king would instead send Crown Prince Mohammed bin Nayef, the Saudi interior minister, and Deputy Crown Prince Mohammed bin Salman, the defense minister. The agency said the summit meeting would overlap with a five-day cease-fire in Yemen that is scheduled to start on Tuesday to allow for the delivery of humanitarian aid.

Arab officials said they viewed the king’s failure to attend the meeting as a sign of disappointment with what the White House was willing to offer at the summit meeting as reassurance that the United States would back its Arab allies against a rising Iran.

King Salman is expected to call Mr. Obama on Monday to talk about his last-minute decision not to attend the summit meeting, a senior administration official said on Sunday.

More…

Posted at 11:34 AM (CST) by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com (Early Sunday Release)

Dear CIGAs,

Economist John Williams says forget about the so-called recovery, we are headed for recession.  Williams contends, “They’ll have a downside revision to this 1st quarter estimate that will take it negative. What we are seeing now is that the outlook for the second quarter is not only weak, but it is also going to turn negative.  Two contracting consecutive quarters of GDP give you a recession.  So, we have an outlook for recession.  This is an economy that I’ll contend that never recovered, and now we are in a new recession . . .  in a grand economic contraction.  It’s an ongoing economic downturn that we entered into way back in 2005.  This is something close to a depression.”

What does this mean for the Fed interest rate policy?  Williams says, “It’s not what the Fed wants.  It’s not what the market wants.  All the speculation about the Fed raising interest rates and returning its policies to more normal functioning, which was the basis of dollar strength since last June, that’s gone.  It is going to be very difficult for the Fed to raise interest rates with the economy turning down again.  You are already beginning to see some downturn in the dollar, which should be reflected in higher oil prices.  That will spike inflation, and you should be seeing higher gold prices.  Although they are still manipulated, they should be moving a lot higher.”

Last week, Fed Head Janet Yellen sounded the alarm on “quite high” stock prices and warned of “potential danger” in the bond market.  Did Yellen make a mistake or was she sending a warning?  Williams says, “I thinks she was sending out a warning. What she did was deliberate. . . . I think she wanted to be in the position that if the stock market crashes, she could say, see I was warning you. . . . I think you are going to have a crash here somewhere along the line that is going to be of a magnitude that will be remembered for decades. . . . I am still looking for a trigger of heavy selling of the dollar and a massive decline in the dollar, a panic decline in the dollar.  That could be a trigger for a stock market crash.  Any number of factors can do it.  You are not going to have much warning when it does come.  The panic moves are almost impossible to time because of their nature, but the fundamentals are there.”

On the U.S. dollar, Williams says because the Fed will not be able to raise rates in a sinking economy, the dollar will sink too.  Williams explains, “That’s why you’ve seen weakness in the dollar in the last couple of weeks.  As the economic outlook has dimmed, and expectations of the Fed raising rates has been pushed off into the future, which is a major factor in the unfolding dollar weakness, it’s still a lot stronger than a year ago, but the downturn in the dollar has started. . . . Unexpected economic weakness adds stress to the financial system.  It also tends to widen projections on the budget deficit.  It will make Treasury fundings more difficult.  The Fed’s going to need to be in there monetizing debt and doing what it can do to prop up the banks.  That is all bad news for the dollar.  As the dollar weakens, that’s going to be inflationary.  As the dollar falls, oil prices will continue to rise.  Gasoline prices are going to go higher again.  That’s where you are going to see early stages of inflation.  As the world gets used to the Fed debasing the dollar, you will see intensified selling.  Watch for a massive decline in the dollar, which will be the early roots of hyperinflation in the not-too-distant future.”

More…

Posted at 7:28 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

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

- Weakening Economy Taking Toll on U.S. Dollar 
- Labor Data Seriously Flawed and Likely Gimmicked 
- April Full-Time Civilian Employment Dropped by 252,000 
- Net of Revisions, April Payroll Gain of 223,000 Was 184,000; March Headline Jobs Gain of 126,000 Revised to 85,000 
- Decline in Headline April Unemployment to 5.4% Was a Rounding Game, Easing from 5.47% to 5.44%, and Otherwise Not Consistent with March 
- April 2015 Unemployment: 5.4% (U.3), 10.8% (U.6), 23.0% (ShadowStats) 
- Annual Growth in April 2015 Money Supply M3 Slowed to 5.4%, from 5.7% in March and from February’s 5-Year High of 5.8%

"No. 717: April Employment and Unemployment, Money Supply M3 " 
Web-page: http://www.shadowstats.com

 

Jim Sinclair’s Commentary

Good decision on his part.

Jeremiah O. Norton Submits Resignation as Director of the Federal Deposit Insurance Corporation
FOR IMMEDIATE RELEASE
May 8, 2015

Media Contact:
Barbara Hagenbaugh
202-898-7192
[email protected]

Jeremiah O. Norton submitted his resignation Friday as Director of the Federal Deposit Insurance Corporation, effective June 5, 2015.

Norton, who has served as Director since April 16, 2012, submitted his letter of resignation to President Obama.

"Jeremiah has been an extraordinarily effective and influential member of the FDIC Board," Chairman Martin J. Gruenberg said. "He has made major contributions to important actions by the FDIC in the wake of the financial crisis. We are grateful for his service, we will miss his thoughtful insights, and we wish him well in his future endeavors."

A copy of his resignation letter is attached. – PDF (PDF Help)

# # #

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system. The FDIC insures deposits at the nation’s banks and savings associations, 6,509 as of December 31, 2014. It promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its operations.

FDIC press releases and other information are available on the Internet at www.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC’s Public Information Center (877-275-3342 or 703-562-2200). PR-39-2015

Old Workers Hit New All Time High As All April Jobs Go To The "55 And Older"
Tyler Durden on 05/08/2015 10:30 -0400

Earlier we reported that all the jobs added in April were part-time, or over 400,000, while full-time jobs decreased by over 200,000 pushing them further under the pre-recession peak. Here is another stunning data point: while it has been no secret that ever since the quote-unquote recovery virtually all job gains have gone to older workers, those 55 and over and ever closer to retirement, April merely confirmed this demographically disastrous trend, and of the 255K workers added in the household survey when broken down by age group, more than all, or 266K went to workers aged 55 and older also known as the age cohort which is realizing it is never going to retire under the Fed’s centrally-planned regime.

clip_image001

And while the old workers rose to a new all time high of 33.379 million workers…

clip_image002

Working Americans in their prime career years, those aged 25-54 once again declined, this time by 19,000 in the month of April. And, as the next chart shows, just like full-time jobs have been unable to rise above the last-recession highs, so the number of workers aged 25-54 are now 4 million below the prior peak.

clip_image003

Finally, before anyone blames the collapse in prime-age jobs and the surge in "old" jobs on demographics and a drop in the participation rate for America’s oldest workers, here is the bitter truth: increasingly old Americans are forced to work well into their retirement years not because they want to but because they have no choice, thanks to the Fed’s ZIRP policy which has destroyed any retirement value their savings may have had.

More…

Posted at 5:59 PM (CST) by & filed under In The News.

European Derivative Market Breaks
Tyler Durden on 05/07/2015 07:11 -0400

Usually when markets break, we learn about it only after the fact. This time, however, we get a heads up in advance that Europe’s critical derivatives market – especially critical today with massive bond derivatives volumes coming through as a result of this morning’s latest rout which has managers scrambling to reposition – is about to break, courtesy of the Euronext Derivatives Market.

To wit from Euronext:

Members are advised that due to technical issues with CCG configurations, members might experience a disconnection as from 13:10 CET during a shorty period of time.

This operation will be conducted over a short period of time, and customers should be automatically reconnected at the end of the process.

And by short period, it is likely that they mean the usual: until the selling stops.

More…


Jim Sinclair’s Commentary

Denmark does not like drinking water that you can light.

Denmark suspends fracking over ‘hazardous’ chemicals
Published time: May 06, 2015 22:41

Denmark has suspended the first exploratory drilling for shale gas which lasted only one day after it discovered that French gas-giant Total, in charge of the project, had used “unauthorized” chemicals.

“They used a product that was not part of those authorized” for the procedure, Ture Falbe-Hansen, a Danish Energy Agency spokesman told AFP Wednesday.

The type of defoamer known as Null Foam is used in fracking to extract shale gas and is considered hazardous to the environment, according to Danish public broadcaster DR.

The chemical is not illegal, according to Henrik Nicolaisen, who leads the drilling project for Tot
“We have been in dialogue with both the municipality and the Danish Energy Agency since February and we felt that we had a common understanding that the substance could be used,” he told DR, as cited by AFP.

Environmental committee chairman of Frederikshavn Council Anders Brandt Sørensen said Total’s use of the non-approved product “makes [him] very mad”.

“We will simply not accept this kind of violation of our EIA [environmental impact assessment],” he told broadcaster DR.

More…


How long will it take?
Author : Bill Holter
Published: May 7th, 2015

I could have titled this piece “The Inevitable” or “It’s not a matter of if, but when” but I have another thought in mind and want to look at Greece from another angle.  Yes, either of those two titles would have sufficed because a Greek default is inevitable and only a matter of when.

My thoughts this morning are “how long will it take” to drag everything down with their default?  As mentioned yesterday, the ratings services, creditors and even “official” sectors are furiously trying to figure out how to not call a default a “default”.  This is of utmost importance because what is left of our global “rule of law” will destroy the derivatives markets from the inside out.  This needs little explanation because it is black and white, “grey” however is what the power structure is desperately hoping for.

If Greece is considered to have defaulted, rather than having some “splaining to do”, there will be billions worth of “paying to do”.  Greece has 350 billion euros of debt owed, this amount is surely “covered” by CDS (credit default swaps).  The reality is probably 10 times this amount but let’s assume it is only this 350 billion.  Liquidity has and is drying up ALL OVER THE WORLD, a 350 billion euro hit will bankrupt many entities, not to mention those who actually hedged and …don’t get paid.  You see, there are two sides here, the debt itself and at least an equal amount of CDS …so now we are talking an absolute minimum of 700 billion euros.

And remember, banks all throughout Europe (including the ECB itself) hold Greek bonds at par (100 cents on the dollar) because Greek debt, even though everyone knows its not worth the paper it is printed on is mandated as tier one capital.  “Tier One” meaning the “safest stuff” and worthy of bank portfolios “carefully safeguarding” depositor funds.  I hope you see the humor in this, sub-sub prime student loans are probably now safer than Greek debt.

Now to the title itself, how long will it take?  For what?  For a total meltdown, THAT’S WHAT!  Will we see some sort of slow burn where convulsions show up now and then, or the other extreme, a complete meltdown?  In my opinion we may see both for a couple of weeks or maybe even two months.  It is possible that those rendered insolvent get overnight injections and don’t admit to anything.  This may work for a short time but as always, insiders will know and start slipping out the back door.

Honestly, once a default is “recognized”, and trust me it will be sooner or later, I don’t believe the markets will stay open more than 48 hours before being closed by necessity.  I cannot imagine any scenario where Greece defaults (doesn’t pay) and the markets do not convulse into a death spiral in more than two week’s time.  There is a reason for me going through this exercise, some may believe they will be able to move and sidestep it.  Others have been trying to time the “perfect” entry or re-entry into precious metals and believe they will be delivered upon, I don’t believe this will practically be possible.

Forget about the “timing”, I do believe there will be some who time it perfectly …but just one problem.  So you are so smart and deft to sell out of the stock market at one minute before midnight, where does your capital go?  It takes three days to even “settle” a trade, then, does your broker send a check?  A wire?  Or do they put the settled funds into their “insured” money market?  Do you see the problem?  Your capital may be out of stocks (maybe not a great idea if we enter hyperinflation) …BUT it is STILL WITHIN THE SYSTEM!  Looking at the precious metal timer, let’s assume they are also “perfect” in their timing.  They get their order in and their broker confirms it, will there be time to transfer good funds?  Will the metal actually arrive in their hands?  Maybe?

More…

Posted at 5:00 PM (CST) by & filed under Jim's Mailbox.

Jim,

China needs to keep their powder dry and know their opportunity to take the London Gold Fix away from the West and allow it to become true pricing is drawing near.

CIGA Larry

China To Establish Yuan-Denominated Gold Fix In Bid To Upend London Benchmark
Submitted by Tyler Durden on 05/06/2015 22:00 -0400

A long time ago, in a financial galaxy far, far away, a “fringe” blog raised the topic of gold market manipulation during the London AM fix. Several years later (which, incidentally, is about average in terms of the lag time between when something is actually going on and when the mainstream financial media finally figures it out and reports on it), it was revealed that in fact, shenanigans were likely afoot and indeed, regulators are still trying to sort out what happened.

Via WSJ earlier this year:

The precious-metals probes are the latest example of regulatory scrutiny into how the world’s biggest financial institutions influence widely used benchmarks. Until last year, prices for gold, silver, platinum and palladium were set using a decades-old practice of once- or twice-a-day conference calls between a small group of banks. The process for setting each of the price “fixes” has since been overhauled…

Last year, the FCA fined Barclays £26 million ($40.2 million) for lax controls after one of its traders allegedlymanipulated the gold fix at the expense of a client…

Swiss regulator Finma settled last year allegations of foreign-currency manipulation with UBS. The regulator said it found “serious misconduct” among precious-metals traders at UBS, including “front running,” or trading ahead of, the silver-fix orders of one client…

More than 25 lawsuits have been filed against Barclays, Deutsche, HSBC, Bank of Nova Scotia and Société Générale over their alleged role in setting the gold fix.

The ‘fix’ for the ‘fixed’ gold fix (only in the world of corrupt high finance is such a hilariously absurd passage possible) is supposedly a new system whereby the fixings are derived electronically, but as Reuters notes, there’s a new kid on the block when it comes to benchmarking the price of gold. Here’s more:

China conducted trial runs for the planned launch of a yuan-denominated gold fix last month, three sources familiar with the matter said, in a sign the world’s second-biggest bullion consumer was moving closer to creating a benchmark price.

More…

Posted at 4:07 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

The newest member of the equity bear club.

Fed’s Yellen says equity valuations high, warns of ‘potential dangers’

Federal Reserve Chair Janet Yellen on Wednesday pointed to high valuations in the stock market and said the central bank needs to keep close tabs on the non-bank lending sector.

More…

 

Capital Controls Hit Greek Banks: FX Trading Curbed As Credit Lines Cut
Tyler Durden on 05/06/2015 13:52 -0400

While officials have begun their own versions of capital controls by raiding pension funds,confiscating local government cash, and surcharges on withdrawals (and transfer ceilings); it appears the market participants themselves have now imposed their own share of capital controls. As Bloomberg reports, international securities firms are curtailing trading with major Greek banks – pulling credit lines and restricting FX trading limits – as fear of Grexit looms.

Bloomberg reports,

Greek banks are increasingly being hampered from trading currencies, one of most liquid markets, as international dealers cut back credit lines and costs soar, according to people with knowledge of the trades.

International securities firms are curtailing trading with Greece’s major lenders that may expose them to the risk of a default by the nation and the possible use of capital controls to stem outflows from banks, the people said, asking not to be named because they are not authorized to speak publicly.

Those threats are adding to concern that the euro would decline in the event of a default or a Greek exit from the currency region, leaving counterparties exposed to multiple risks, said the people.

A months-long impasse on Greece’s bailout talks with creditors has prompted depositors to withdraw funds from the nation’s lenders, leaving banks no choice but to rely on emergency funds for liquidity. The ECB on Wednesday raised the limit on Emergency Liquidity Assistance, people familiar with the matter said, a sign the financial system remains under strain.

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Yellen Kills The Music, Says “Equity Valuations Are Quite High”, Sends Dow Red For 2015
Tyler Durden on 05/06/2015 10:13 -0400

Back in July 2007 Citi’s then CEO Chuck Prince, a little over a year before his bank received a gargantuan government bailout said “as long as the music is playing, you’ve got to get up and dance.” Moments ago Janet Yellen just killed the music:

YELLEN SAYS EQUITY MARKET VALUATIONS QUITE HIGH

And with that The Dow has accelerated its weakness into the red for 2015.

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And since last week’s FOMC…

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Jim Sinclair’s Commentary

Simon Black wrote a very good piece on GOTS.

May 6, 2015
Sovereign Valley Farm, Chile

Well, it was bound to happen sooner or later.

Our beloved amigos at the US Financial Crimes Enforcement Network (FinCEN), have just issued the first-ever ‘civil enforcement action’ against a virtual currency.

The offending criminal mastermind in this case? Ripple Labs.

If you’re not familiar, Ripple is a virtual currency platform that was once the darling of Silicon Valley, attracting top VC firms like Google Ventures and Andreessen Horowitz.

Ripple’s technology allows users to conduct financial transactions with one another — sending and receiving payments in cryptocurrencies like Bitcoin, as well as fiat currency.

Imagine Bitcoin meets Paypal… and you have the basic idea.

As part of its technology, the parent company Ripple Labs also created a native virtual currency called ‘XRP’, which is the second largest in the world after Bitcoin when measured by market capitalization.

Because of all of these features, Ripple Labs qualifies as a ‘money service business (MSB)’ according to FinCEN… which makes them subject to all sorts of regulations.

At the top of the list is the Bank Secrecy Act (BSA), which, contrary to its name, requires banks and MSBs to betray their customers’ financial secrets to the US government.

Specifically, the BSA mandates that all banks and MSBs file ‘suspicious activity reports’ if they “know, suspect, or have reason to suspect” that a transaction of $2,000 or more is ‘suspicious’.

And in the age of the USA PATRIOT Act, suspicious transactions are BIG BUSINESS for Uncle Sam.

Last year a record 2.4 MILLION suspicious activity reports were filed. That’s a 40% increase from 2013’s record year of 1.7 million.

As you can imagine, Ripple Labs failed to register with FinCEN as an MSB, nor did it submit suspicious activity reports.

In its complaint, FinCEN describes several of the oooooh-so-nefarious violations.

According to FinCEN, “In January 2014, a Malaysian-based customer sought to purchase XRP from [Ripple Labs], indicating that he wanted to use a personal bank account for a business purpose.”

HOLY JIHAD BATMAN!!!! Someone wanted to use a personal bank account for business purposes?!?! NUKE THE SON OF A BITCH!

I mean, seriously. This is the complete nonsense that keeps financial bureaucrats up at night: some guy in Malaysia wants to buy digital currency with his personal funds.

Whoop-dee-doo.

But what’s really wild is that Ripple actually DENIED the transaction. They just didn’t file the SAR.

So… even though Ripple didn’t actually ENGAGE in said ‘suspicious activity’, failing to file the SAR (with the appropriate TPS report cover sheet) was enough to land them in hot water.

End result — Ripple was dinged with a $700,000 fine.

Now, $700k is a pittance compared to the $9 BILLION that BNP Paribas was slammed with last year for doing business with countries that were former enemies-turned-BFFs of the US government — namely Cuba and Iran.

But it’s still a ridiculous penalty for having done nothing wrong.

Of course, it’s never about right or wrong. It’s about sending a message. And that’s exactly what FinCEN is doing.

By going after Ripple (a major player in the industry), FinCEN is trying to scare all the smaller players into ratting out their customers.

This, after all, is what desperate, bankrupt governments have done for millennia —

Step 1: Track down where everyone’s money is.

Step 2: Take it.

You don’t see rich, stable countries doing this sort of thing. In fact, the exact opposite.

An official from Hong Kong’s Treasury recently stated that: “the Government does not consider it necessary to introduce at the moment new legislation to regulate trading in such virtual commodities or prohibit people from participating in such activities.”

Night and day difference.

We’ll continue to see these steps in the US and in Europe. Tracking down virtual currency transactions. Banning cash. Anything they can do to keep your money trapped in the system where they can keep their eyes on it.

It’s all the more reason to move a portion of your savings out of that system and into somewhere safe.

Until Tomorrow,

Simon Black
Founder, SovereignMan.com

Posted at 4:02 PM (CST) by & filed under Jim's Mailbox.

Jim,

Un-freaking-believable! Doesn’t anyone on Wall Street pay for their crimes?

Hey John (Q. Public)….wake up and smell the roses!

CIGA Wolfgang R Newsmeister

Fed Agrees To Name The FOMC Leaker (As Long As Congress Keeps It Secret)
Submitted by Tyler Durden on 05/06/2015 – 13:39

Having initially missed its deadline to provide a response to Congress with regard the 2012 leak of FOMC minutes to an external newsletter writer, The Fed reluctantly admitted that none other than Janet Yellen had met with them. Today, however, as The Wall Street Journal reports, The (unaudited) Fed has agreed to furnish a congressional panel with the names of its staffers who had contact with Medley Global Advisors in the months before the leak, “with the understanding that the names will be kept confidential.” So we’ll happily tell you who leaked it… as long as you don’t tell the public. Audit The Fed!!!

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Jim,

Can you smell it? It’s an awfully familiar smell. The smell of inflation?

Unit labor costs up 5.0% in the 1st Quarter

Up 4.2% in the prior quarter. Let’s see… if I’m looking at this correctly, then we’ve witnessed 9.2% labor inflation in 6 months.

That’s 18.4% annualized!

CIGA Wolfgang R. Newsmeister

Productivity and Costs, First Quarter 2015, Preliminary

Unit labor costs in the nonfarm business sector increased 5.0 percent in the first quarter of 2015, reflecting a 3.1 percent increase in hourly compensation and a 1.9 percent decline in productivity. Unit labor costs increased 1.1 percent over the last four quarters. (See tables A and 2.)

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Jim,

Not only are we going to have to pay to keep our money in the bank, but now we will have to pay to get it out!

They get ya comin’ and goin’.

CIGA Wolfgang R Newsmeister

Greece Floats Surcharge On Withdrawals As ECB Considers Cuts To Liquidity Lifeline
Submitted by Tyler Durden on 05/06/2015 – 09:36 ZeroHedge.com

Greece is set to introduce a surcharge on withdrawals and financial transactions in an effort to raise cash amid fractious negotiations with creditors. Meanwhile, the ECB is considering measures that will tighten the screws on the country’s cash-strapped banking sector.

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