Posted at 12:35 PM (CST) by & filed under Jim's Mailbox.

Jim,

It begins… Austria no longer guarantees bank deposits and can confiscate depositor’s funds to bail out the banks.

Better research and know your bank before opening a savings account!

“As Germany’s Deutsche Wirtschafts Nachrichten opines “depositors will have to thoroughly research the situation of the bank they place their savings in”. It adds, “this task is extremely difficult, because of the muddy financial statements and of the complexity of the interdependencies in the banking system”.”

Anyone who thinks this is indigenous to Austria, and can’t happen here, is simply being naive!

Good Luck to all.

CIGA Wolfgang Rech

Bank Deposits No Longer Guaranteed By Austrian Government
Submitted by GoldCore on 04/09/2015 08:47 -0400

Bank Deposits No Longer Guaranteed By Austrian Government

- Austria will remove state guarantee of bank deposits
- Austrian deposit plan given go ahead by the EU
- Banks to pay into a deposit insurance fund over 10 years
- Fund will then be valued at a grossly inadequate €1.5 billion
- New bail-in legislation agreed by EU two years ago
- Depositors need to realise increasing risks and act accordingly
- “Bail-ins are now the rule” and ‘Bail-in regime’ coming

Bank deposits in Austria will no longer enjoy state protection and a state guarantee in the event of bank runs and a bank collapse when legislation is enacted in July. The plan to ensure that the state is no longer responsible for insuring deposits has been readied by the Austrian government in conjunction with the EU two years ago according to Die Presse.

Currently, Austrians have their bank deposits guaranteed to a value of €100,000 – the first half to be provided by the failing bank and the other by the state. From July, however, the state will be removed from the process and a special bank deposit insurance fund is to be set up and paid into by banks to meet potential shortfalls.

The fund will be filled gradually over the next ten years to a value of €1.5 billion. In the the event of a failure of a major bank in the intervening period the legislation will allow the fund to borrow internationally although who will provide such funding and on what terms is not clear, according to Austria’s Die Presse.

However, even when the scheme is fully funded it is clear that €1.5 billion will be woefully inadequate to deal with a bank failure.

More…

Posted at 8:18 PM (CST) by & filed under In The News.

German Factory Orders Fall in Sign Economy Still Prone to Risks
By Alessandro Speciale

German factory orders unexpectedly fell for a second month in February in a sign Europe’s largest economy is still prone to risks.

Orders, adjusted for seasonal swings and inflation, fell 0.9 percent after a revised decline of 2.6 percent in January, data from the Economy Ministry in Berlin showed on Wednesday. The typically volatile number compares with a median estimate of a 1.5 percent increase in a Bloomberg survey. Orders slid 1.3 percent from a year earlier.

The data contrasts with other reports that indicate strength in the economy and underscore the Bundesbank’s upbeat projections for growth. While instability from Greece to Russia highlights the risks for the recovery, surveys from Markit Economics show momentum is building in both manufacturing and services in Germany.

“There is absolutely no need to be worried,” said Andreas Rees, chief German economist at UniCredit Bank AG in Frankfurt. “The upward trend in business sentiment is intact, thereby heralding better hard economic data in the next few months.”

The euro pared its advance against the dollar after the report and was up 0.3 percent at $1.0843 as of8:50 a.m. Frankfurt time.

Bulk Orders

Consumer-goods orders surged 2.9 percent in February from the previous month, and domestic demand for investment goods was up 1.9 percent, according to the report. Export orders declined 1.6 percent. The Economy Ministry had initially reported a 3.9 percent drop in January factory orders.

More…

Posted at 8:15 PM (CST) by & filed under Jim's Mailbox.

Jim,

Interesting point of view by Marc Faber:

“Personally, I don’t believe that the Fed or Janet Yellen are really running the Fed. I think someone tells them what to do but I don’t know who it is,” he noted.

Furthermore, he’s still buying gold on a monthly basis, hell or high water, because even if the Fed does raise rates (which he doesn’t believe they will), the interest rates will still remain below the cost of living (negative real interest rates).

A very good point for everyone to keep in mind.

Don’t get spooked.

CIGA Wolfgang Rech

Good Entry Point For Gold Right Now – Marc Faber
By Kitco News
Tuesday April 7, 2015 3:12 PM

(Kitco News) – Gold’s volatility does not sway this famed economist as he thinks, regardless of recent gold market fluctuations, now is a good buying time.

“My sense is that we’ve been at $1,921 on the gold price in September 2011, we’re now around $1,200. Well, I think this is a reasonably good entry point,” said Marc Faber, editor and publisher of theGloom Boom & Doom Report, told Kitco News in a phone interview.

“I’m still buying gold… I buy some every month and whenever there is a more significant decline, I add more to my gold position,” he added.

“I believe one day this faith in paper money and in the power of central bankers will be undone and at that stage price of metals – in physical form – will perform very well,” he added.

Looking to the Federal Reserve and interest rate hikes in the U.S., which many expect will hurt gold prices this year, Faber says he doesn’t think the Fed wants to make a move on rates.

“And if they do, at some point, it would be because some really visible inflationary pressures would come up. And at that point, they would increase rates but they would make sure rates stay below the cost of living increases. In other words, we would still have negative real interest rates,” he explained.

Faber highlighted the Fed’s data-dependency to make any policy moves, and says that it basically means the central bank is saying it doesn’t know what it is doing.

More…

Posted at 10:30 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Looks like we certainly have Russia isolated.

China, Russia Enter New Stage of Strategic Partnership – Chinese FM
21:15 07.04.2015

MOSCOW (Sputnik) — China and Russia have reached a very high level of cooperation in the past two years leading to a new stage of strategic partnership between Beijing and Moscow, Chinese Foreign Minister Wang Yi said Tuesday.

“According to preliminary data, you [Russian and Chinese leaders] have reached 107 bilateral agreements in the past two years. Fifty-five of them have been implemented, 21 are long-term projects, while 31 are being actively implemented,” Wang Yi said addressing Russian President Vladimir Putin during a meeting in the Kremlin.

Wang Yi arrived in Moscow on Tuesday with an official visit at the invitation of his Russian counterpart Sergei Lavrov. One of the key issues on the agenda of the visit is to prepare for the arrival of Chinese President Xi Jinping to Moscow on May 9 to attend the Victory Day celebrations.

Russia is China’s ninth largest trading partner. Trade between the two nations stood at $90 billion in 2013 and reached $95.3 billion in 2014, according to the Chinese customs department. In 2015, their bilateral trade is expected to reach $100 billion, Wang Yi said at a press conference on March 8.

Moscow and Beijing have signed a number of strategically important agreements over the past year, including a major energy contract in May that guarantees the delivery of Russian gas to China for 30 years. The nations also actively cooperate in counter-terrorism, military, financial and other spheres.

More…


Jim Sinclair’s Commentary

Those sanctions were a brilliant idea?

Russian Central Bank plans to move away from international ratings to Russian ones
April 07, 15:33 UTC+3

MOSCOW, April 7. /TASS/. The Central Bank is going to gradually move away from international ratings to Russian ones, Chairperson Elvira Nabiullina at the Russian Bank Association conference.

“We are thinking about gradually moving away from international ratings and developing our own ratings industry with Russian agencies,” she said.

Currently the regulator is gradually introducing requirements for banks to have ratings of Russian rating agencies.

As was previously reported, in February the draft law on Russian rating agencies’ activities was introduced to the State Duma. Currently there is no law regulating rating agencies’ activity in Russia. And there are several rating agencies, accredited the Finance Ministry: RusRating, Expert RA Rating Agency, and the National Rating Agency.

Earlier, Russian Deputy Finance Minister Sergey Storchak said that Russia could consider giving up contracts with international agencies on keeping the ratings of the Russian Federation. “We could give up contracts for maintaining our credit rating. We even pay for these contracts,” he said.

Russia’s sovereign rating was downgraded below the investment grade by S&P and Moody’s.

More…


Jim Sinclair’s Commentary

This is not good news with the Egyptian Navy on their way there.

Houthi rebels seize sea port and airport in Yemen’s Aden
April 07, 16:56 UTC+3

BEIRUT, April 6. /TASS/. Houthi rebels in Yemen have seized the port and international airport in Aden, Al-Mayadeen TV channel reported on Tuesday.

Rebels, supported by several army units, received reinforcements despite air strikes delivered at their positions by the Saudi Arabia-led coalition, which determined the outcome of the fighting in the country’s second-largest city, Al-Mayadeen said.

The coalition’s aviation delivered air strikes at central and western regions of Yemen. Saba news agency reported that a school was hit in the city of Ibb, around 160 kilometers from Sanaa. Three children were killed and more than 20 injured. Yemen’s Education Ministry sent a note of protest to UN, demanding an investigation of this “military crime.”

More than 230 Houthi field commanders have been killed over the last two weeks in air strikes, around 3,000 supporters of the Ansar Allah movement were injured, according to the Elaf internet portal.

UNICEF said today that more than 200,000 Yemeni refugees fled their homes since the start of the military conflict in the country. At least 74 children were killed, and 44 more injured. On Sunday, the UN reported that 549 have been killed in Yemen since March 19, including 217 civilians.

More…


Egypt sends large naval-marine force to Bab el-Mandeb
DEBKAfile April 5, 2015, 9:32 AM (IDT)

DEBKAfile’s military sources report that Egypt Sunday transferred war ships and marine forces as reinforcements for securing the Bab el-Mandeb Strait against Iranian-backed Houthi control. Egypt now deploys six warships and at least 1,000 marines at the vital shipping gateway.

Egypt will defend its Gulf allies “if we have to,” said President Abdel-Fatteh Al-Sisi Saturday night after a meeting of the Supreme Council of the Armed Forces. He stresse that Bab Al-Mandab Strait was a national security issue for Egypt and Arab countries. Arab national security would only be protected by Arab countries, said the president.

Egypt has closely monitored the civil war in Yemen, especially since the Saudi-led Operation Decisive Storm began to end the Iranian-backed Houthi rebellion. The disruption of shipping in the Bab el-Mandeb Strait would directly affect traffic, including energy shipments, to and from the Gulf and Far East through Egypt’s Suez Canal.

More…


Jim Sinclair’s Commentary

Sounds like a fair deal for Greece.

Russia To Offer Greece New Loans, Gas Price Discount
Tyler Durden on 04/07/2015 08:07 -0400

While Greece spent Easter weekend (not the Greek orthodox Easter that is) assuring the IMF (the “institution”, not the critical third member of the Troika that shall not be named) that the €450 million payment due to Christine Lagarde’s organization will be made despite Greece officially (rather than just unofficially) running out of money and being forced to prioritize repaying its creditors over paying wages and pensions, its Prime Minister is currently evaluating what the Plan B will be when he visits Vladimir Putin one day ahead of the double Greek deadlines of IMF payment and cash running out.

As FT reports, “when Alexis Tsipras visits Vladimir Putin’s Kremlin on Wednesday there is a chance the Greek premier’s eastern manoeuvre will immediately bear fruit: kiwis, peaches and strawberries to be precise. Athens is hopeful that Moscow will lift a retaliatory ban on Greek soft fruits to demonstrate the abiding strength of Russo-Greek relations, just as both leaders feel a diplomatic chill with Europe over the Ukraine crisis and Athens’ bailout saga respectively.”

Of course, every Greek request for a concession “quid” will be met with a proportional Russian quo, and it is this that worries European diplomats – namely will the Putin-Tsipras gladhanding amount to something more significant than fruit trade. “The big fear, in the words of one suspicious senior official, is a “Trojan horse” plot, where Russia extends billions in rescue loans in exchange for a Greek veto on sanctions — a move that would kill western unity over Ukraine.”

No such shock is expected this week. But as Athens nears the brink of insolvency there is growing alarm that Mr Tsipras’s radical left government might turn to Moscow in desperation. It would set off the biggest panic over Greece’s strategic alignment since the 1947 US Marshall Plan, initiated to save the country from communist fighters that Mr Tsipras’ Syriza party lionise to this day.

Others are hoping that Tsipras visit is merely a, well, Trojan horse strawman, meant to instill fear in Europe that Russia can spread its tentacles to a country which is still a member of the Eurozone, and is merely a “ploy in bailout talks with Germany and the eurozone. In spite of historic cultural ties and Syriza’s Soviet romanticism, analysts think Greece is too tied to the west – through EU and Nato membership – and too deep in debt for sanctions-damaged Russia to buy it off as a reliable ally.”

“The Greeks are using Russia as a way to piss off Berlin, to frighten them. Tsipras wants to show he has other options,” said Theocharis Grigoriadis, a Greece-Russia relations expert at the Free University of Berlin.

More…


Triggers
Author : Bill Holter
Published: April 7th, 2015

The big story regarding the Asian Infrastructure Investment Bank was the application by the Israelis.  This came just prior to the deadline and of course at the displeasure once again to Washington.  Britain was the early defector followed by Germany, France and Italy.  Eyebrows were raised when Saudi Arabia made their announcement but I believe what was truly missed was the application by Taiwan.

If you are old enough to remember, Taiwan was “recognized China” in the eyes of the U.S..  Mainland China was “Red” China and not officially recognized by the U.S., the application by Taiwan slipped by with little to no comment.  I believe Taiwan’s application holds great significance because it means the “elder families” are on board and have given their approval.  This is truly big news yet not even spoken of in the West?  As I understand it, the application must now be approved, a potential sticking point is the name “Taiwan”, this will be very interesting to watch!

Why is the AIIB such a big deal?  There are several reasons but I believe the biggest is because it is a very public piece to the bigger picture.  Not only has the bank attracted the Asian countries one would expect, it has attracted many Western countries and even those closest to the U.S..  Going one step further, ALL of these applications came against U.S. lobbying and were followed by public rebukes from Washington.  This was the first instance where the world collectively (including long time U.S. allies) has expressly denied Washington’s wishes.

The AIIB is only one piece to the puzzle.  Another is the clearing system set to directly compete with SWIFT.   Yet another is the BRICS bank, and let’s not forget the Shanghai physical metals exchange set to go live shortly.  Can you see the picture these pieces are putting together?  China, Russia and the rest of the world could see what is coming but they have not been ready for it…yet.  Each one of these pieces amounts to preparation for what is to come.  When I say “preparation”, much of it has been put into place to buffer the East (and rest of the world) from the financial collapse of the West.

More…


Jim Sinclair’s Commentary

Isn’t that supposed to be via dollars?

Turkey, Iran to Switch to Transactions in National Currencies – Erdogan
15:42 07.04.2015

ANKARA (Sputnik) — Turkey and Iran are planning to switch to transactions in their national currencies, Turkish President Recep Tayyip Erdogan said Tuesday at a press conference with his Iranian counterpart Hassan Rouhani on Tuesday. “We do not wish to remain under the pressure of the dollar or the euro, or under the influence of their exchange rates. We have agreed that Turkish and Iranian national currencies are to be used between us. This will add extra strength to our countries,” Erdogan said.

Erdogan also added that the goal of Turkey and Iran’s trade turnover would amount to $30 billion. Currently their trade turnover stands at $14 billion.

Turkey first announced it had been in talks with Iran and China on local currency transactions during Erdogan’s visit to Iran in October 2014.

Local currency trade can end the nations’ dependence on the US dollar for commodity turnover and eliminate trade barriers that were imposed on Iran by United States and United Nations. The curbs on the Islamic republic’s banking, financial and trade sectors, among others, aimed to isolate the country for its nuclear program. Last week, Iran and world powers agreed to phase them out if a comprehensive nuclear deal is struck by July 2015.

In January, Iran’s central bank said it had suspended the use of the US dollar in foreign trade transactions and was working on bilateral currency swap deals. This was followed by Moscow and Tehran’s announcement that they were going to set up a joint bank account for transactions in national currencies, such as in food trade.

More…

Posted at 10:17 PM (CST) by & filed under Jim's Mailbox.

Jim,

I remember the days of yore, when individual investors actually moved the market.

The more they bought, the higher stocks would go.

Ahhhh, those were the days. When real economic stats can actually be relied upon, using your academic learning, to make investment decisions.

But alas, those days are gone. First replaced by hedge funds, then by high frequency trading consortiums, and finally Central Banks.

And the companies behind the stocks accommodated them with share issuance.

Individual investors no longer matter now.

However there is a bright side! They all think that they can pull the same crap with gold and silver.

Gold and silver are REAL items. Physical entities that can’t be mass produced in unlimited quantities.

The big power houses can issue all the futures paper and ETF paper they want, but in the end, it will come down to the amount of physical commodity that actually exists. You can’t print real gold.

That, my friends, will blow the whole system out of the water. You can’t fool Mother Nature!

CIGA Wolfgang Rech

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

March Consumer Spending Hits Three-Year Low For Average Americans
Tyler Durden on 04/06/2015 10:43 -0400

In “sad but true” news, we recently reported that even as wage growth for 80% of America’s workforce has sputtered and stalled, there’s never been a better time to be a “supervisor”:

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With more than three quarters of US workers trapped in what we will call “wage growth hell,” and whose only chance at seeing a pay hike appears to rest on holding out for a promotion that’s probably not forthcoming, it doesn’t exactly come as a surprise that self-reported consumer spending hit a three-year low for March last month and has trended sharply lower this year when compared to 2014.

Of course those with higher incomes hiked their spending by 75% more than those with middle- and lower-incomes. Here’s more via Gallup:

Average self-reports of spending in March increased by $7 among upper-income Americans — those with annual household incomes of $90,000 a year or more — to reach $144. Among middle- and lower-income Americans, those with incomes that are less than $90,000, spending increased by $4 from February to reach $75 in March.

The broad trend shows spending recovering after reaching lows during the Great Recession and its aftermath, but for the first months of 2015, spending has been lower than it was for most months last year.

More…

 

Jim Sinclair’s Commentary

Thanks to the short sellers, both legal and naked shorts, gold mineable held by gold producing companies has not been this cheap in the last century. That is the number of ounces of mineable gold held by a company divided into the value of the company’s capitalization. It defies all logic and proves the complete disconnect between the price of gold shares and gold.

We’ve Never Seen This Before In The Gold Market
Submitted by Tyler Durden on 04/06/2015 13:40 -0400

Submitted by Dave Forrest via OilPrice.com,

It might prove to be a one-off. But one group in the gold industry this week forged ahead with a unique strategy – which might just change the market.

The group is India’s largest jewellery-maker, Rajesh Exports. Which said that it is taking an unusual step in securing gold supply for its operations.

Buying gold mines.

The firm’s owner, Rajesh Mehta, told reporters in Australia this week that he is visiting the country to vet potential mining acquisitions. Adding that his company has hired investment bankers to identify assets that could “ensure a reliable and permanent gold supply-line to our company”.

The buys are apparently sizeable. With Mehta indicating that he may spend up to $700 million to acquire “equity or loan” interests in mining projects.

“We would also like to invest in the retail jewelry sector in Australia,” he said. “That is, take the gold from here, process it in India and then supply the jewelry back here in the retail line that we set up here.”

Of course, the words of one company don’t make an industry trend. But in the case of Rajesh Exports, the firm does have substantial clout in terms of gold demand — currently consuming about 140 tons per year of the metal. Equal to about 15% of India’s total yearly gold import volume.

It also signals an interesting trend in natural resources of late. Where end users of metal globally are becoming some of the most active parties in funding new mining projects.

We’ve seen similar moves from state-owned metals firms in Asia — in markets ranging from copper to platinum to coal. But the Rajesh Exports asset buy would be one of the first-ever project transactions by an end user for the gold market. Watch for announcements on specific investments for the firm.

More…

 

Fed Rate Rise Would Smoke Derivatives-Bill Holter
By Greg Hunter’s USAWatchdog.com (Early Sunday Release)

Financial writer Bill Holter says don’t expect the economy to get better anytime soon.  Holter says, “We’re probably in recession again . . . the economy has been quite weak.  It looks to me we could be breaking down in the stock market.  This is going to be a really critical week.”

On the Federal Reserve raising interest rates, Holter contends, “From a credibility standpoint, the Fed has to raise rates.  In a real world, I don’t think they can raise rates.  If they raise rates, my guess within two weeks you will see all the markets close.  A rate rise, even a quarter of a point in Fed Funds, would smoke derivatives.  You would see a chain reaction, and we would probably see a chain reaction even before they raise rates.”

Holter contends the banking system is interconnected and very weak and explains his point by saying, “Look at what happened when the Swiss dropped their peg to the euro.  That basically has tanked the Austrian banking system.  The Austrian banking system is on the verge of collapse because they lent in Swiss Francs.  The strength in the Swiss Franc makes those loans much more difficult to pay back.  That’s thrown the entire (Austrian) banking system out of kilter.  If you do that with the dollar and you raise rates, and the dollar gets strong or spikes up 5% or 10% overnight, what’s that going to do to banks all over the world?  That’s going to create a smoking black hole of derivatives.”

On the possibility banks bailing themselves out with depositor money, or so-called bank bail-ins, Holter predicts, “I think it’s highly likely.  Once this goes, it’s going to go really quickly.  I’ve said this before, this will go completely around the world within 48 hours.  Would they bail-in the banks within 48 hours?  Probably not, but our banks would not be open, and we would probably have a banking holiday.  That means your credit card, ATM or nothing works.”

Holter says his top picks that will cause the system to crash this year are Greece, Ukraine and Austria.  Holter explains, “Ukraine has a dire financial situation and talking about a big payment due in June that they can’t pay.  They don’t have the money.  We also heard news that 50 Abrams tanks were sent from the U.S. on the way to Ukraine.  That’s terrible news.  That, on its own, can start a war. . . . If that war went hot and a nuke was lit up, within 48 hours the entire system would be shut down.”  Holter goes on to say the third big top in what he calls a three ring circus is Austria.  Holter says, “It’s basically the Austrian system over a very small payment, a $600 million payment is throwing them off kilter.  It’s come about because of the loans made in Swiss Francs.  The Swiss Franc was revalued (30%) higher.  So, now you have a whole bunch of loans in Austria where the loan is valued higher than the property itself. . . . That’s thrown the Austrian banking system into bankruptcy, and Austria is one of the strong European countries.”

More…

 

Thailand hopes for trade and energy cooperation with Russia — prime minister.
April 06, 11:21 UTC+3

BANGKOK, April 6. /TASS/. Thailand wants to develop cooperation with Russia in trade, energy and tourism, Prime Minister Prayut Chan-o-cha said in an exclusive interview with TASS director general Mikhail Gusman dedicated to Russian Prime Minister Dmitry Medvedev’s upcoming visit to Bangkok on April 7-8.

Chan-o-cha said considers the meeting with Medvedev “very important” and feels “a little nervous” ahead of the Russian prime minister’s visit. “I am waiting for a meeting with the Russian prime minister as with a friend whom I made friends with in Myanmar,” the politician noted. Chan-o-cha and Medvedev met at the East Asia Summit in 2014 in Naypyidaw.

The talks in Bangkok will be devoted to “a wide range of issues,” Chan-o-cha said. He expressed hope for expanding trade relations with Russia, as Thailand is the largest rice producer in the world and one of the largest seafood exporters. “In talks with the Russian prime minister, I hope to reach such agreements that may be implemented right away, without delay,” he said.

Thailand intends to improve the quality of products exported to Russia and attract investment from Moscow. “Fishing industry is a very important topic. We have fishing vessels, a lot of them, but they are obsolete. We can establish joint enterprises [with Russia], modernize our vessels and simultaneously use yours, catching fish together,” Chan-o-cha said.

The prime minister said he would also like to discuss cooperation in the financial sphere with Medvedev. “Many countries participate in our financial sector. I want Russia to take part, too,” he stressed.

Issues of cooperation in the oil and gas sphere will also be high on the agenda. “Despite long distance that separates us [with Russia], we need to think about ways to cooperate on mutually beneficial conditions,” Chan-o-cha said.

Tourism will also be discussed at the meeting between the prime ministers. “We will set up a Thai-Russian center for tourism development. A document for this is ready,” Chan-o-cha noted.

More…

 

Greeced Lightning!
Author : Bill Holter
Published: April 6th, 2015

We seem to have finally arrived at some sort of moment of truth regarding Greece and their inclusion in the EU.  The speculation is they will be out of money by April 9th, this Thursday, unable to make a less than 500 million euro payment.  Please keep in mind they have already been raiding the country’s pension plans to fund day to day services.  How large of a “dent” they have already made remains to be seen but that is not the point.  The point is this, any person, corporation or government who needs to dig into retirement savings for daily operations is like buying a carton of cigarettes with a credit card at 14.99% …and then carrying the balance!

Before laying out their potential options, please keep in mind that Mr. Varoufakis  was in New York this past weekend meeting with Christine Lagarde , Mr. Tsipras plans a trip to Moscow for Tuesday.  Are they pleading for unpaid bailout funds from the IMF?  And if they don’t get them, do they cut a deal and fall into Russia’s arms?  This, just as so many nations have pledged their allegiance to the East and the AIIB bank (topic for tomorrow), Greece may be forced into a pivot toward the rising Sun.  They do however have something left to offer, they stand between Turkey and Eastern Europe, they can provide a route for Russian gas to flow to Europe.

What options does Greece have left?  As I see it, they really only have three, and all with blurry edges.  First, they can cut some sort of deal with Germany (the EU) and the IMF.  They can kick the can down the road by extending maturities of existing debt and restructuring it.  The IMF still owes past monies pledged in bailouts, will they really throw new money away knowing it cannot be paid back?  Obviously this does nothing to face the real problem, Greece simply has too much debt for the size of their economy (this is a global problem but not “admitted yet”).  This option may have been taken off the table on Friday.  As a side note, it was reported Friday by Der Spiegel the IMF evacuated their Athens office.  Why would they do this?  I can only come up with one or two scenarios.  The IMF is giving up and know it is over … or, they are getting out of town while they still can.  Maybe they realize massive social unrest will be unleashed and don’t want to see their employees hanging from lamp posts?  This was denied by Saturday but interesting nonetheless!

Their second option is to just default.  If they cannot make debt payments, they simply don’t pay and thus become classified as a default.  The next question is whether or not they would stay in the EU?  Would they want to?  Or even be allowed to?  Option number three, an offshoot of number two, is Greece defaults and they decide to leave the EU (or are kicked out) and join team Russia.

My guess is we will see Greece default, leave the EU and cut a gas pipeline deal with Russia becoming a stepping stone for China’s “silk road”.  At this point, it’s the only thing that makes any sense …if you are Greek and try to do what is best for Greece.  A story also making the rounds on Friday was preparations to re issue the “drachma“.  If this is true, I would say the decision to leave the EU has already been made except for the formalities!  The next question is the biggie, and one which will affect the entire world.  How do the markets and financial systems react to this?

More…

 

April 6, 2015
Santiago, Chile

Last week, the government of China closed the enrollment window to join its new Asian Infrastructure Investment Bank (AIIB) as a ‘founding member’.

The AIIB, if you haven’t heard of this yet, is designed to essentially displace the Western-controlled IMF and World Bank.

And prior to last Tuesday’s deadline, dozens of nations around the world from New Zealand to Denmark signed up to join.

Even staunch US allies like the United Kingdom and Israel agreed to be part of AIIB.

This is a huge coup for China, and probably the most obvious sign yet that the global financial system is in for a giant reset.

Under the weight of nearly incalculable debt and liabilities, the United States is in terminal decline as the dominant superpower.

From Ancient Rome to the British Empire, this has happened many other times in history.

This time is not different. And everyone else in the world seems to get it. . . except for the US government.

They act as if the financial universe will revolve around America forever—that they can print money, indebt future generations, and wage war as much as they want without consequence.

But they’re completely blind.

Practically the entire world is lining up against them to form a brand new financial system that is no longer controlled by the US government.

In an editorial published in the Financial Times, former US Treasury Secretary Larry Summers summed it up plainly saying that this “may be remembered as the moment the United States lost its role as the underwriter of the global economic system.”

The consequences of this shift away from a US-controlled financial system cannot be understated.

No more endless spending. No more solving problems with more debt and more money printing.

Suddenly it will be time for painful decisions in the US—like slashing Social Security benefits, drastically scaling back the military, and selectively defaulting on the debt.

Make no mistake, this transition is going to be bumpy.

China may already be the largest economy in the world by many measurements. But the Chinese economy is in for some serious strain over the coming months and years as its massive credit bubble bursts.

So in addition to America’s fiscal and monetary challenges, the world is going to have to suffer through a potential Chinese crisis as well.

But this does not affect the long-term story. Remember, nothing goes up or down in a straight line.

On its road to becoming the global superpower in the 20th century, the United States suffered its own series of deep economic setbacks—from the Panic of 1907 to the Great Depression, and several recessions in between.

China’s path will likely be similar.

This is one of the most important trends of our time. And it’s happening right in front of our eyes.

The world is rapidly throwing off US financial domination. The global financial system is starting to reset. Global financial and political dominance is shifting.

As with any great change, there are going to be people who get completely wiped out—primarily, people who didn’t see the change coming or chose to ignore the trend.

The flip side of this is that, for anyone with the intellectual courage and independence of mind to be paying attention, this is a time of extraordinary opportunity.

Some of the wealthiest people in Europe were minted in just a few years during the Weimar hyperinflation of the 1920s.

And some of the greatest fortunes in the world (some of which still exist today) were made in the early days of the United States as the country rose to dominance.

That’s ultimately the opportunity we have today. We can’t do anything about the trend. It’s happening.

What we can control is how we react to it: ignore it at our own peril, or seize the opportunities that come from it.

Until tomorrow,

Simon Black
Founder, SovereignMan.com

Posted at 11:02 PM (CST) by & filed under Jim's Mailbox.

Jim,

David’s understanding of economics leads to one conclusion. The bankster’s never ending attempts to propel the economy up by money printing is getting shorter and shorter in duration as far as the elevation can go. The limits to obviouscation are there and will begin to be seen buy all.

CIGA Larry and Miki

David Stockman – Yes, Western Governments Do Plan To Steal Money As The Financial System Collapses
April 06, 2015

Today David Stockman, the man President Ronald Reagan called upon along with Dr. Paul Craig Roberts to help save the United States from disaster in 1981, warned King World News that, yes, Western governments do plan to steal money from their citizens as the financial system implodes.  Stockman also spoke about what is really happening with the global economy and why efforts to deceive the public have finally reached the limit.

Eric King:  “David, we’re going to take a trip down the rabbit hole of something that’s quite terrifying for people.  You’ve read the interviews from King World News with James Turk.  He spoke about the ECB and bankrupt Western governments stealing people’s money right out of the banks.  This has already unfolded in Cyprus.  We’re now going to see this play out in Greece.  This is going to become much more frightening for people going forward as they watch this unfold.  What are your thoughts as you see this developing, David?”

David Stockman:  “I think this is huge and it’s much bigger than Greece.  Greece is only a case in point — the flashpoint of the hour.  The truth is that on a global basis the jig is up….

More…

 

Jim,

“Emblematic of the Dollar’s return to its role as the world’s undisputed dominant currency”?

Somehow I remain skeptical of this point AND of the reasoning behind it.

Central Banks dumping dollars to shore up their currencies? I kind of think it’s more of an exodus from the dollar and into gold.

N’est pas?

CIGA Wolfgang Rech

Once Over $12 Trillion, the World’s Currency Reserves Are Now Shrinking
By Ye Xie

Global reserves declined to $11.6 trillion in March from a record $12.03 trillion in August 2014, halting a five-fold increase that began in 2004, according to data compiled by Bloomberg.

Beyond being emblematic of the dollar’s return to its role as the world’s undisputed dominant currency, the drop in reserves has several potential implications for global markets. It could make it harder for emerging-market countries to boost their money supply and shore up faltering economic growth; it could add to declines in the euro; and it could damp demand for U.S. Treasury bonds.

China, the world’s largest reserve holder, together with commodity producers contributed to most of the declines, as central banks sold dollars to offset capital outflows and shore up their currencies. A Bloomberg gauge of emerging-market currencies has lost 15 percent against the dollar over the past year.

China cut its stockpile to $3.8 trillion in December from a peak of $4 trillion in June, central bank data show. Russia’s supply tumbled 25 percent over the past year to $361 billion in March, while Saudi Arabia, the third-largest holder after China and Japan, has burned through $10 billion in reserves since August to $721 billion.

More…

 

Jim,

There is a parade towards Russia.

CIGA Ricard VT

Argentine President’s Trip to Russia Made to Irritate Washington – Report
Sputnik/ Aleksey Nikolskyi
13:22 06.04.2015(updated 14:15 06.04.2015)

The planned visit by Argentina’s President Cristina Fernández de Kirchner to Russia will cause concern in the White House and is likely to cause a chill in ties between Buenos Aires and Washington, according to Argentine journalist Fernando Cibeira.

Argentine President Cristina Fernandez de Kirchner’s upcoming visit to Russia will alarm the White House and is likely to tarnish ties between Buenos Aires and Washington, Argentine journalist Fernando Cibeira said in an article posted on the El Destape website.

In late April, Cristina Fernández de Kirchner is due to visit Moscow in order to sign a new raft of agreements with Russian President Vladimir Putin, one of the world leaders whose political stance is shared by the Argentine leader, according to Cibeira.

This is not the case with relations between Fernández and her US counterpart Barack Obama, which Cibeira says are based on both courtesy and suspicion. According to him, these relations can accurately be described as a series of discrepancies.

More…

Posted at 3:17 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- First-Quarter GDP Contraction Is an Increasingly Solid Bet; Market Sentiment Should Begin Shifting Towards "New" Recession 
- March Labor Data Fell Apart on Both the Payroll and Unemployment Fronts 
- Net of February Revisions, March Payrolls Gained Just 57,000 
- Masked by Rounding, Headline Unemployment Actually Declined by 0.1% (-0.1%), Due to Discouraged Workers Being Defined Out of Headline Existence, Not Due to the Unemployed Finding New Jobs 
- March 2015 Unemployment: 5.5% (U.3), 10.9% (U.6), 23.1% (ShadowStats) 
- Annual Growth in March 2015 Money Supply M3 Eased to 5.6%, from February’s Revised 5-Year High of 5.8%

"No. 710: March Employment and Unemployment, Money Supply M3 " 
Web-page: http://www.shadowstats.com

Household Survey indicates a downward revision for the already-miserable March payroll number
Author: Asia Unhedged April 3, 2015

Only 34,000 jobs were added in March, according to the Household Survey. 96,000 Americans, meanwhile, left the labor force. The Labor Force Participation Rate has fallen back to post-1978 lows. Given the implosion of the BLS’ January and February data with a 69,000 downward revision, the huge discrepancy between the Household and the Establishment surveys suggests that the March payroll number might be revised downward, miserable as it already is.

 

Change from Feb. to March

Employment status

 

Civilian noninstitutional population

181

Civilian labor force

-96

Participation rate

-0.1

Employed

34

Employment-population ratio

0

Unemployed

-130

Unemployment rate

0

Not in labor force

27

More…

People In The West
April 01, 2015

Today one of the top money managers in the world warned King World News about earth-shaking events that are taking place in the East.  He also discussed the centerpiece of China’s plans for world domination that will shock people in the West.

Stephen Leeb:  “Eric, as you know, for quite some time I have focused on East vs West and the East is really kicking our rears right now.  The latest thing everyone is talking about is what China is doing with its infrastructure bank (AIIB).  But even more significant than that, in my memory and I’m not a young guy, I’ve never hard of Great Britain thumbing their nose at the United States….

“But Great Britain did.  They said, ‘We’re joining this bank.’  This is a bank that will be very competitive with the World Bank and it’s dedicated to infrastructure throughout Asia – throughout the Silk Road.  This is going to give China a tremendous amount of clout throughout the entire Eastern part of the world, even extending to Saudi Arabia.

More…