Posted at 12:02 PM (CST) by & filed under In The News.

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October 2, 2014 
Santiago, Chile

In 1324, Mansa Musa, the tenth emperor of the Mali Empire, set off from Western Africa on his pilgrimage to Mecca.

This was no Spartan journey. He was accompanied on his way by a procession of 60,000 men and 12,000 slaves, each of whom carried up to four pounds in gold bars.

Musa is might just have been the richest person of all time, with an accumulated wealth estimated at $400 billion valued in today’s increasingly worthless dollars.

But it wasn’t just kings and emperors who held gold. Gold has been the most widely-used medium of exchange in world history… across all points of the globe.

Ibn Battuta was a 14th century traveler and explorer whose famous grand adventure spanned 75,000 miles over the course of 24 years, much like Marco Polo’s.

Everywhere he traveled– North Africa, Middle East, Central Asia, India, Southeast Asia, China – gold was either the dominant currency or an easily accepted medium of exchange.

This barbarous relic has stood the test of time across cultures around the world for millennia as a form of wealth.

Most people in the West have completely lost sight of this.

They view the value of gold through the lens of paper currency, i.e. an ounce of gold is ‘worth’ 1,215 US dollars.

This is a deeply flawed perspective.

Looking at the gold price moving up and down in US dollars is something like sitting in a rowboat on choppy waters believing that it’s the beach that’s moving up and down.

Einstein might say that it’s all relative, but only one has any real stability.

But perspectives can and do change.

There once was a time when most people believed that the entire universe revolved around the Earth.

This was flawed (and arrogant) view, and it was eventually corrected.

Thinking that the global economy revolves around the US dollar is just as flawed and arrogant. And it will soon be discredited just the same.

History tells us that dominant monetary systems invariably have an expiration date.

From the Byzantine solidus to the British pound, this is especially true when a superpower enters into decline and plays destructive games with its currency.

Today’s system where an unelected central banking elite conjures trillions of dollars and euros out of thin air is no different. It has an expiration date too.

Change is never easy. People don’t like it, and will resist change even if their current situations are terrible. Inertia is the most powerful force in the universe after all.

Desirable or not, it’s happening. The US dollar’s days are numbered.

Now, gold, with its millennia-long history is making a comeback. We’re not just talking about it as a store of wealth or a speculation, but as a regular form of currency.

Moving us back in this direction, Singapore Exchange launched a new arrangement this week where institutional-sized gold contracts will settled not in cash, but in 1kg bars of gold.

This means that each of these contracts is intended to deliver and store gold in Singapore on behalf of large financial institutions, central banks, and even governments.

Sure, Singapore wants to advance itself as THE gold hub of Asia. We’ve been writing to our premium members about this for years

But more importantly, it’s quite telling that major insiders within the financial system itself are pursuing this contract.

They’re effectively setting up a new system, in Asia, to afford governments and central bankers the opportunity to trade in their US dollars for something real.

Just like yesterday’s post about the renminbi / euro convertibility, this is truly a canary in the coalmine moment for the future of the US dollar… as well as gold’s emerging role in the financial system of tomorrow.

Until tomorrow, 
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Simon Black 
Senior Editor, SovereignMan.com

 

JPMorgan Chase Says More Than 76 Million Accounts Compromised in Cyberattack
By Jessica Silver-Greenberg and Matthew Goldstein
October 2, 2014 12:50 pm

A cyberattack this summer on JPMorgan Chase compromised more than 76 million household accounts and seven million small-business accounts, making it among the largest corporate hacks ever discovered.

The latest revelations, which were disclosed in a regulatory filing on Thursday, vastly dwarf earlier estimates that hackers had gained access to roughly one million customer accounts.

The new details about the extent of the hack — which began in June but was not discovered until July — sent JPMorgan scrambling for the second time in just three months to contain the fallout.

As the severity of the hack became more clear in recent days and new information was unearthed, some top executives flew back to New York from Naples, Fla., where many had convened for a leadership conference, according to several people briefed on the matter.

Hackers were able to burrow deep into JPMorgan’s computer systems, accessing the accounts of more than 90 servers — a breach that underscores just how vulnerable the global financial system is to cybercrime. Until now, most of the largest hack attacks on corporations have been confined to retailers like Target and Home Depot.

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Jim Sinclair’s Commentary

The most endangered species is on two, not four, legs. It is the pensioner.

Federal Judge: Stockton pensions can be cut in California bankruptcy
Thursday, October 02, 2014

UT San Diego reports:

Public-employee pensions are not protected when a city goes belly-up, according to a ruling Wednesday by the judge overseeing Stockton’s much-watched federal bankruptcy case. Judge Christopher Klein’s few words have re-energized the state’s disheartened pension-reform movement – and left the nation’s most-powerful pension fund reeling.

One can’t go a day in Sacramento without hearing about a “historic” piece of legislation or a “groundbreaking” decision, but the Stockton case – held in a downtown Sacramento courthouse – could change everything on the pension front. Klein said in the verbal ruling that pensions are just another contract: “Impairing contractual obligations – that’s what bankruptcy is all about.”

Until now, there has been no way for California cities to get out from underneath the overly generous pension promises they have made to public employees over the past 15 years, the result in part of a pension-increasing bonanza spurred by 1999 legislation championed by the California Public Employees’ Retirement System.

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‘Internal affair’: Beijing warns foreign countries not to meddle in Hong Kong
Published time: October 02, 2014 08:41
Edited time: October 02, 2014 12:34

China’s foreign minister made it clear Beijing would not allow other countries to meddle into its ‘internal affairs’, responding in this way to US Secretary of State’s call for Beijing to grant Hong Kong the “highest possible degree of autonomy.”

The American and the Chinese heads of foreign offices exchanged their views on the massive protests in Hong Kong before their talks at the US State Department on Wednesday.

"Hong Kong affairs are China’s internal affairs,” Chinese Foreign Minister Wang Yi said. “All countries should respect China’s sovereignty. And this is also a basic principle governing international relations. I believe for any country, for any society, no one will allow those illegal acts that violate public order.”

Wang added he believed the current Hong Kong leadership was able to handle the large-scale sit-ins by itself.

The remark was made after US Secretary of State John Kerry reiterated Washington’s support for “universal suffrage” in Hong Kong, the main demand put forward by protesters in the Asian financial hub.

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Hong Kong Police Draw Line on Occupation of Buildings
By Bloomberg News  Oct 2, 2014 7:10 AM ET 

Oct. 2 (Bloomberg) — Bloomberg’s Andrew Davis reports on the seventh day of pro-democracy protests in Hong Kong as students demand the resignation of Chief Executive Leung Chun-ying. He speaks on “Bloomberg Surveillance.”

Hong Kong police said they would not tolerate attempts by pro-democracy protesters to surround or invade public buildings, as Chief Executive Leung Chun-ying faced calls to open a dialogue with students who are seeking his resignation.

Pressure on Leung mounted after students last night staged what may have been their biggest sit-ins since demonstrations began Sept. 26, with close to 200,000 people gathering in three main protest areas, according to one student leader’s estimate. As of 7 p.m., hundreds of protesters were confronting police outside Leung’s office in Admiralty, while others gathered on roads in some of Hong Kong’s busiest districts.

“Some organizers have threatened to escalate their actions by surrounding government buildings,” Hui Chun-tak, chief superintendent of the police public relations branch, told reporters today. “Police will not tolerate any illegal surrounding of government buildings. The police urges protesters to remain calm and show restraint.”

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Jim Sinclair’s Commentary

This is quite important.

Chinese renminbi is now directly tradable with the euro
October 2, 2014

The Chinese central bank, People’s Bank of China, issued a press release announcing the authorization of direct trading between the renminbi and the euro on the inter-bank foreign exchange market.

This is huge. The euro is the second most traded currency in the world, after the US dollar.

The European Union is already China’s biggest trading partner and this is a major step in further increasing trade and investment ties with the EU as there is now a direct exchange rate between the two currencies, without the need to use the US dollar as the conduit.

The renminbi is quickly marching down the path of internationalization as the Chinese currency is now directly exchangeable with the US dollar, Australian dollar, New Zealand dollar, Japanese yen, British pound, Russian ruble, and Malaysian ringgit.

The use of renminbi in international trade settlement nearly tripled in value worldwide over the past two years according the The Society for Worldwide International Financial Telecommunications (SWIFT), and over one third of financial institutions around the world already use renminbi for payments to China and Hong Kong.

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Jim Sinclair’s Commentary

This speaks negatively to the Petro dollar.

Putin says Russia wants to move to national currencies in trade
Thu, Oct 02 06:05 AM EDT

MOSCOW, Oct 2 (Reuters) – Russian President Vladimir Putin said on Thursday that Russia wants to shift to national currencies in trade deals with China and other countries, implying a shift away from the U.S. dollar.

"In the future we aim actively to use national currencies in energy resources trade to settle… international trade accounts, with China and other counties," Putin told an investment conference. "In using national currencies, we see a serious mechanism for curbing risks." (Reporting by Alexander Winning, Darya Korsunskaya and Polina Devitt, writing by Gabriela Baczynska, editing by Jason Bush)

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Jim Sinclair’s Commentary

This also speaks to the Petro dollar negatively.

Russia, Iran to boycott US dollar in bilateral trade

The move away from the U.S. dollar is yet another reaction to Western sanctions placed on Russia since it annexed Crimea from Ukraine in March.

Russia and Iran have agreed to use their own national currencies in bilateral trade transactions rather than the U.S. dollar.

Iran’s IRNA news agency reported that the plans were announced in a meeting on Tuesday in Tehran by Iranian business magnate and head of the Iran-Russia Joint Chamber of Commerce, Asadollah Asgaroladi.

An original agreement to trade in rials and rubles was made earlier this month in a meeting between Russian Energy Minister Alexander Novak and Iranian Oil Minister Bijan Namdar Zanganeh.

Similarly, Russia and China also agreed to trade with each other using the ruble and yuan in early September, following a Russian deal with North Korea in June to trade in rubles.

The move away from the U.S. dollar is yet another reaction to Western sanctions placed on Russia since it annexed Crimea from Ukraine in March.

In response to sanctions on Russia by the European Union, Russia has also threatened to cut off Europes gas supply and close its air space to European airlines. Russia has also boycotted European food imports, in a move likely to affect farmers in the EU.

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Posted at 10:39 AM (CST) by & filed under In The News.

Why China thinks gold is the buy of the century
(. . . In one easy lesson*)
by Michael J. Kosares

(Excerpts)

How formidable?  Consider this:

- China could purchase the total United States gold reserve (8133 metric tonnes) with 8% of its foreign exchange reserves.

- It could purchase the total global gold reserve (31,866 metric tonnes) with 32% of its foreign exchange reserves.

- It could purchase all the gold stored by Exchange Traded Funds (+/- 1750 metric tonnes) with less than 2% of its foreign exchange reserves.

- At $4900 per troy ounce, the value of U.S. gold reserves would match China’s U.S. Treasury holdings of roughly $1.28 trillion.

- At $4700 per troy ounce, the value of the world’s gold reserves would match China’s total foreign exchange reserves of roughly $4 trillion.

- To put it another way, China could pay double the current price for the world’s total gold reserve and still have nearly $1.5 trillion in foreign exchange reserves.

- China sits atop the list of the world’s foreign exchange holdings. The United States ranks thirteenth at $133 billion.  For the United States to ascend to the top of the rankings, it would need to revalue its $319 billion gold reserve to almost $4 trillion – or raise the value to just under $15,300 per troy ounce.

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Jim Sinclair’s Commentary

The physical market is alive and well.

The U.S. Mint Sells Over 750,000 Silver Eagles In One Day
Filed in Precious Metals by SRSrocco on September 30, 2014

The market reacted to the big drop in the paper price of silver by a huge increase in Silver Eagle purchases.  September was turning out to be a much stronger month compared to July and August even before the last update of the month.

On Monday, the U.S. Mint reported 3,375,000 sales for the month.  Then this evening, I checked to see if they had updated their figures.. which they did in A BIG WAY.

In one day, the U.S. Mint sold 766,000 Silver Eagles, more than all the Gold Eagles sold to date.  Actually, is was more than double the 379,000 oz of Gold Eagles sold this year.

If we look at the chart below, sales of Silver Eagles in September, were double that of July and August:

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Silver Eagle sales were quite strong in the beginning of the year and started to slow down in June.  However, the manipulated lower price of silver motivated investors to ramp up the purchases making September one of the three strongest months of the year.

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Only January and March were stronger than the 4,140,000 Silver Eagle sales in September.  The total for the first three-quarters of the year is 32,251,000.

If Silver Eagle sales are exceptional strong in September, it would it also be true for Canadian Maples, Chinese Pandas, Philharmonics and Perth Mint Silver sales.

While its frustrating to see the price of silver at these lows, I still believe there isn’t a better deal out there than exchanging fiat Dollars for ounces of silver.

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How Bad Could It Get? US Government Order Of 160,000 HazMat Suits Gives A Clue
Submitted by Tyler Durden on 10/01/2014 11:17 -0400

Now that Ebola is officially in the US on an uncontrolled basis, the two questions on everyone’s lips are i) who will get sick next and ii) how bad could it get?

We don’t know the answer to question #1 just yet, but when it comes to the second one, a press release three weeks ago from Lakeland Industries, a manufacturer and seller of a "comprehensive line of safety garments and accessories for the industrial protective clothing market" may provide some insight into just how bad the US State Department thinks it may get. Because when the US government buys 160,000 hazmat suits specifically designed against Ebola, just ahead of the worst Ebola epidemic in history making US landfall, one wonders: what do they know the we don’t?

From Lakeland Industries:

Lakeland Industries, Inc. (LAKE), a leading global manufacturer of industrial protective clothing for industry, municipalities, healthcare and to first responders on the federal, state and local levels, today announced the global availability of its protective apparel for use in handling the Ebola virus.  In response to the increasing demand for specialty protective suits to be worm by healthcare workers and others being exposed to Ebola, Lakeland is increasing its manufacturing capacity for these garments and includes proprietary processes for specialized seam sealing, a far superior technology for protecting against viral hazards than non-sealed products.

"Lakeland stands ready to join the fight against the spread of Ebola," said Christopher J. Ryan, President and Chief Executive Officer of Lakeland Industries.  "We understand the difficulty of getting appropriate products through a procurement system that in times of crisis favors availability over specification, and we hope our added capacity will help alleviate that problem.  With the U.S. State Department alone putting out a bid for 160,000 suits, we encourage all protective apparel companies to increase their manufacturing capacity for sealed seam garments so that our industry can do its part in addressing this threat to global health.

Of course, purchases by the US government are bought and paid for by taxpayers. For everyone else there’s $1200 mail-order delivery:

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That said… 160,000 HazMats for a disease that is supposedly not airborne? Mmmk.

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Posted at 10:37 AM (CST) by & filed under Jim's Mailbox.

Jim,

By hook or by crook this government intends to strip from our middle class every dollar they can. You don’t have to shrink the Social Security checks. You just withhold payment on your children’s student loans.

CIGA Larry

It happens: Seniors with student debt – and smaller Social Security checks

CHICAGO – It’s a rude awakening for a growing number of seniors: They file for Social Security, then discover that the federal government plans to take part of their benefit to pay off delinquent student loans, tax bills, child support or alimony.

This month the U.S. Government Accountability Office (GAO) released findings on the problem of rising student debt burdens among retirees – and how the government goes after delinquent borrowers by going after wages, tax refunds and Social Security checks.

Under federal law, benefits can be attached and seized to pay child support and alimony obligations, collection of overdue federal taxes and court-ordered restitution to victims of crimes. Benefits also can be attached for any federal non-tax debt, including student loans.

It seems the student loan crisis isn’t just for young people. The GAO found that 706,000 of households headed by those aged 65 or older have outstanding student debts. That’s just 3 percent of all households, but the debt they hold has ballooned from $2.8 billion in 2005 to about $18.2 billion last year. Some 27 percent of those loans are in default.

More…

 

Jim,

Take 2 aspirin and call me in the morning!

CIGA Dr. K

First Ebola victim in America was sent home with antibiotics
The patient, who contracted the disease in Liberia, presented himself at a hospital in Dallas, Texas but was given antibiotics and told to go home. Now, health officials have launched a desperate search for others he could have unwittingly infected
By Nick Allen, Dallas
6:21AM BST 01 Oct 2014

The first person to be diagnosed with Ebola in America was initially sent home with antibiotics after doctors failed to recognise the symptoms of the deadly disease.

A desperate search has now been launched to find other people in Dallas, Texas who the man could have infected.

The patient had arrived in Dallas on a flight from Liberia and later presented himself at the hospital because he was feeling ill.

He was told to go home and take the antibiotics, but two days later his condition had deteriorated so badly that an ambulance had to be called.

More…

Posted at 10:22 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

If tomorrow’s MSM is silent then ebola is here.

North Texas Hospital Evaluating Patient For Potential Ebola Exposure
Updated | September 29, 2014 10:58 PM September 29, 2014 9:06 PM

DALLAS (CBSDFW.COM) – A North Texas hospital has a patient in isolation as they evaluate them for potential exposure to the Ebola virus.

Officials with Texas Health Presbyterian Hospital in Dallas released the following statement Monday night:

“Texas Health Presbyterian Hospital Dallas has admitted a patient into strict isolation to be evaluated for potential Ebola Virus Disease (EVD) based on the patient’s symptoms and recent travel history. The hospital is following all Centers for Disease Control and Texas Department of Heath recommendations to ensure the safety of patients, hospital staff, volunteers, physicians and visitors. The CDC anticipates preliminary results tomorrow.”

It is unclear what specific symptoms the patient has or what the patient’s travel history was.

CBS 11 News spoke with Dallas County Health and Human Services Director Zachary Thompson who confirmed the patient had been in an area where the Ebola virus exists. “Looking at the travel history is the first indicator and then the next step is [treatment or non-treatment] once we get lab results,” he said.

Thompson definitely felt that there should be a heightened sense of awareness in North Texas, based on what has happened internationally. “With what we’ve seen in the media and how deadly the Ebola virus is, it is a concern.”

More…

Posted at 5:13 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

In case you haven’t checked it out in a while. http://www.usdebtclock.org/

Jim Sinclair’s Commentary

Every step forward for the Yuan is a long term backwards for the dollar.

Yuan to Start Direct Trading With Euro as China Pushes Usage
By Bloomberg News Sep 29, 2014 5:06 AM MT

China will start direct trading between the yuan and the euro tomorrow as the world’s second-largest economy seeks to spur global use of its currency.

The move will lower transaction costs and so make yuan and euros more attractive to conduct bilateral trade and investment, the People’s Bank of China said today in a statement on its website. HSBC Holdings Plc said separately it has received regulatory approval to be one of the first market makers when trading begins in China’s domestic market.

The euro will become the sixth major currency to be exchangeable directly for yuan in Shanghai, joining the U.S., Australian and New Zealand dollars, the British pound and the Japanese yen. The yuan ranked seventh for global payments in August and more than one-third of the world’s financial institutions have used it for transfers to China and Hong Kong, the Society for Worldwide International Financial Telecommunications said last week.

“It’s a fresh step forward in China’s yuan internationalization,” said Liu Dongliang, an analyst with China Merchants Bank Co. in Shenzhen. “However, the real impact on foreign exchange rates and companies may be limited as onshore trading volumes between yuan and non-dollars are still too small to gain real pricing power.”

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Jim Sinclair’s Commentary

Nice to see a more accurate report on the size of the OTC derivative pile.

The Economy: “Derivatives Market a $1.2 Quadrillion Time Bomb”
Sunday, October 14, 2012 22:40
by The Independent Report

“The US economy is run like a casino and Wall St. is the house. Collateralized debt obligations (CDOs), credit default swaps (CDS) and derivatives are Wall Street’s casino games. Naturally, the games are always rigged in favor of the house.

Financial jargon is often arcane and perplexing to the average person. While even casual observers have surely heard of derivatives, most are unlikely to know what exactly they are. Derivatives, or swaps, are basically bets between companies and banks that are designed, in essence, to be insurance policies. The problem with derivatives is that since they often involve highly leveraged bets, they can be very dangerous. A small change in market conditions can mean huge losses. Such losses can occur because derivatives use extraordinary leverage, or borrowing. Derivatives allow investors to earn large returns from small movements in the underlying asset’s price. However, investors can also lose large amounts if the price of the underlying asset moves against them significantly.

In fact, derivatives were used to conceal credit risk from third parties while protecting derivative counterparties, which contributed to the financial crisis in 2008. That threat still lingers today. If interest rates were to rise unexpectedly, for example, it could result in a financial bloodbath on Wall Street.

Derivatives are used to make the really big money on Wall St. They can be many things, but are basically contracts or bets that derive their value from the performance of something else — an interest rate, a bond or stock, a loan, a currency, a commodity, virtually anything. For traders, derivatives are a perfect product. They can also be highly lucrative to financial institutions. Over the last five years, banks earned an estimated $20 billion selling derivatives just to school districts, hospitals, and scores of state and local governments across the country. Yet, as Warren Buffett famously stated, derivatives are “financial weapons of mass destruction.”

More…

Pending Home Sales Drop In August (After Record Surge In New Home Sales)
Tyler Durden on 09/29/2014 10:10 -0400

Following last week’s explosion higher in new home sales (despite surging record high prices), it is somewhat intriguing that pending home sales would tumble over 4.1% YoY, and drop 1.0% MoM (missing expectations of a 0.5% drop) and the 2nd biggest drop in 2014.

The ‘stunning’ rationale for this miss, provided by NAR’s chief economist, is… "fewer bargain-priced homes’ (which is odd given record prices and record surge in new home sales), and a "rising rate environment" (except rates are collapsing), with hope for the future based on the "employment outlook for young adults improving and their incomes rising" (more lies) and a "shift to more traditional first-time buyers who need mortgages" (except mortage apps are at 20-year lows).

Just last week, New home sales rose the most since 1992:

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Jim Sinclair’s Commentary

The age of Miracles is not over.

Despite 2nd Slowest Income Growth In 2014, Spending Rises Most Since March Driven By Subprime, Car Sales
Submitted by Tyler Durden on 09/29/2014 08:38 -0400

Mission releverage accomplished. Personal Income rose 0.3% in August (very slightly below Bloomberg’s median estimate), the 2nd slowest growth of the year.Personal spending however jumped 0.5%, beating the 0.4% expectations, and its equal best growth since March. What was spending focused on? Why autosales, which accounted for about half of the spending. And what funded this spending? Why subprime car loans of course; it sure wasn’t the real disposable income per capita which was a paltry $37,684 in August.

This is how the income and spending looked like:

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2nd miss in a row and 2nd lowest growth in income this year.

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But spending jumped (thank you Subprime bubble 2.0)

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Finally, following several revisions and even more months of constant increases in the US savings rate, August finally saw a drop, from 5.6% to 5.4%, just as Goldman hinted to the Department of Commerce should happen late last week.

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White House Intruder Got Farther Than First Reported, Official Says
By MICHAEL D. SHEARSEPT. 29, 2014

WASHINGTON — An armed man who jumped the White House fence this month made it far deeper into the president’s home than previously disclosed, overpowering a Secret Service agent inside the North Portico entrance and running through the East Room before he was tackled, according to a congressional official familiar with the details of the incident.

The man, Omar J. Gonzalez, who had a knife, was finally stopped as he tried to enter the Green Room, the official said. Earlier, Secret Service officials had said Mr. Gonzalez, 42, had only made it steps inside the North Portico after running through the front door.

The new development, first reported by The Washington Post, will create an explosive hearing on Tuesday when a bipartisan panel of lawmakers intends to grill Julia Pierson, the director of the Secret Service, about whether a lax and undisciplined culture inside the long-heralded agency has badly eroded its ability to protect the president and his family, several members of Congress said Monday.

It has been unheard of in recent decades for an intruder to enter the White House, even if only a few steps inside what is supposed to be one of the most secure buildings in the world. The fact that Mr. Gonzalez was able to pass by the staircase in the Entrance Hall that leads to the White House family quarters — and get as far as the East Room, the site of presidential speeches, news conferences and bill signings — stunned Washington.

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Jim Sinclair’s Commentary

China never slowed down their buying of gold.

China gold demand surging again
Author: Lawrence Williams|
29 September 2014 13:3

Shanghai Gold Exchange figures suggest demand is near 2013 levels.

LONDON (MINEWEB) – We cannot emphasise more strongly that gold followers should ignore the mainstream media reports, based on Hong Kong gold export figures to mainland China, that Chinese gold demand has plummeted by anything between 30% and 50% this year. As we pointed out in an article last week, Hong Kong is now no longer the principal port of entry for gold into the Chinese mainland.

When it was still so, gold exports into China were extremely high at the beginning of the year, but since then the Hong Kong figures have tailed off as China effectively opened up gold import routes through other entry points – notably Shanghai and Beijing , resulting in the Hong Kong net gold exports falling back month by month from a peak of 111 tonnes in February to a mere 21 tonnes in August. This is thus no longer an indicator of overall Chinese gold demand.

That this does not represent the overall Chinese picture is apparent from the withdrawals of physical gold from the Shanghai Gold Exchange (SGE). True these withdrawals are also down this year suggesting a more gradual slowdown in Chinese demand, NOT a precipitous fall as suggested by the mainstream media. However, recently SGE gold withdrawal figures have been particularly strong again – a fact apparently ignored by most gold commentators.

Indeed the past four weeks’ withdrawals from the SGE have totalled over 170 tonnes – this suggests an annual rate of over 2,200 tonnes although weaker figures from March up until August will mean this level will not be reached for the 2014 calendar year, but it may well get much closer to last year’s 2,197 tonnes withdrawn from the SGE than previously estimated.

We would suggest that this year’s figure may well get close to 2,000 tonnes given the lower gold price has been stimulating demand at a time of year when it is traditionally strong anyway. We can thus anticipate continuing demand at high levels and China maintaining its place as the world’s largest gold importer – even disregarding the assumed-probable additional gold imports to swell the country’s gold reserves.

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Posted at 4:17 PM (CST) by & filed under Jim's Mailbox.

Jim,

What David speaks of here is the fact that Mario Draghi sometime back said, he would do whatever it takes to make things happen. What does he do, but offers very low interest loans for around $1Million intended for the small to medium companies for the purchase new plants and equipment. The problem is he is getting few takers for these loans and there is little growth happening. The hedge funds are going out and buying government debt with the expectation that the next round from Draghi when he makes good on his statement that he would do whatever it takes, will include the buying of Government debt. This expectation by the banksters that they could make people behave in one way when there are other choices is the big downfall of the banksters and central planners.

CIGA Larry

Peak Debt—-Why The Keynesian Money Printers Are Done
by David Stockman • September 28, 2014

Bloomberg has a story today on the faltering of Draghi’s latest scheme to levitate Europe’s somnolent socialist economies by means of a new round of monetary juice called TLTRO—–$1.3 trillion in essentially zero cost four-year funding to European banks on the condition that they expand their business loan books. Using anecdotes from Spain, the piece perhaps inadvertently highlights all that is wrong with the entire central bank money printing regime that is now extirpating honest finance nearly everywhere in the world.

On the one hand, the initial round of TLTRO takedowns came in at only $100 billion compared to the $200 billion widely expected. It seems that Spanish banks, like their counterparts elsewhere in Europe, are finding virtually no demand among small and medium businesses for new loans.

Many small and medium-sized businesses are wary of the offers from banks as European Central Bank President Draghi prepares to pump more cash into the financial system to boost prices and spur growth. The reticence in Spain suggests demand for credit may be as much of a problem as the supply.

More…

Posted at 5:57 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

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

- GDP Has Fully Reestablished Itself as the Most Worthless of Economic Series 
- Fluff and Guesstimates Dominated the Upside GDP Revision 
- Monthly Economic Reporting Should Turn Increasingly Negative

"No. 662: Second-Quarter 2014 GDP — Third Estimate" 
Web-page: http://www.shadowstats.com

 

Secret tapes of Fed meetings on Goldman prompt call for U.S. hearings
By Jonathan Spicer and Emily Stephenson
NEW YORK/WASHINGTON Fri Sep 26, 2014 6:18pm EDT

(Reuters) – An influential U.S. senator wants to hold hearings into "disturbing" issues raised by secretly taped conversations between Federal Reserve supervisors and officials at Goldman Sachs Group Inc (GS.N), a bank the Fed was tasked with policing.

Elizabeth Warren, a Democrat on the Senate Banking Committee, on Friday called for hearings after portions of the recordings from 2011 and 2012 were made public. Fellow Democrat Sherrod Brown, also a committee member, called for a "full and thorough investigation" into the allegations they raised.

Carmen Segarra, a former New York Fed bank examiner who brought a wrongful termination lawsuit against her former employer, recorded the conversations and provided them to the investigative news outlet ProPublica and the public radio show "This American Life" to illustrate what she saw as an inappropriately close relationship between regulator and bank.

The tapes appear to show an unwillingness among some Fed supervisors to both demand specific information from Goldman about a transaction with Banco Santander and to strongly criticize what Segarra concluded was the lack of an appropriate conflict-of-interest policy at Goldman.

Political interest in the recordings could feed suspicion among Americans that little has changed on Wall Street since bank regulators failed to identify and stop the risk-taking that led to the 2007-2009 financial crisis and deep U.S. recession.

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Posted at 1:52 PM (CST) by & filed under In The News.

The American House of Cards continues to stand only as a result of the tolerance of the world for vast corruption and disinformation and because greed is satisfied by the money made from a rigged system.
–Dr. Paul Craig Roberts

Jim Sinclair’s Commentary

Sanctions makes new partners and friends.

‘China won’t support sanctions against Moscow’
Published time: September 23, 2014 12:41

China will never support any sanctions against Russia and will never join them, Valentina Matviyenko, speaker of the Russian parliament’s upper house said, citing Chinese President Xi Jinping, with whom she met on Tuesday.

Both Russia and China believe the sanctions are illegal, ineffective and counterproductive, according to Matviyenko. They are nothing but an attempt “to exert pressure on sovereign states to change their position and to weaken them and suppress their development,” she stressed.

Matviyenko thanked Beijing for its public position towards Western sanctions imposed on Russia over the Ukrainian conflict. China has offered an “absolutely objective” assessment of what is now going on in Ukraine. Moreover, no sanctions will affect the long-term strategic partnership between Moscow and Beijing, which reflects the interests of both peoples, she noted.

Cooperation of Russia and China remains a serious factor in international politics, Matviyenko said, adding that the two states have no disputable issues. Their positions are either close or coincide on major problems, including how to settle international and regional conflicts or deal with new challenges and threats.

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Jim Sinclair’s Commentary

Statistical skullduggery.

Final Q2 GDP Surges 4.6% Thanks To Profit Definition Change; Personal Consumption Weaker Than Expected
Submitted by Tyler Durden on 09/26/2014 09:08 -0400

The good news in the just released final Q2 GDP estimate soared by 4.6%, just as Wall Street expected, which was the biggest quarterly jump since 2011 Q4 2011, driven by gains in business spending, where mandatory forced Obamacare outlays led to a $17.5 billion chained-dollars increase in Healthcare spending to $1815.9 billion. Nonresidential fixed investment contributed two-tenths to the revision, net exports contributed one-tenth, and consumer spending contributed one-tenth. Also helping were corporate profits which rose 8.4% in Q2, the most since Q3 2010, once again courtesy of adjustment in definitions (recall the IVA vs CCAdj change we discussed previously).

From the report: "Profits from current production (corporate profits with inventory valuation adjustment (IVA) and capital consumption adjustment (CCAdj)) increased $164.1 billion in the second quarter, in contrast to a decrease of $201.7 billion in the first." For the explanation read "Is This The Top? First Quarter Corporate Profits Tumble Most Since Lehman." The definition change was responsible for a drop in Q1 profits which has now shot right back up. This is what Goldman said back then:

The decline was driven by statistical adjustment factors. The first reason is that the decline in corporate profits as measured in the national accounts mostly reflects the capital consumption adjustment factor estimated by the BEA to account for the effect of the expiration of bonus depreciation at the end of 2013.

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Tapes showing meek oversight of Goldman are about to rock Wall Street

Wall Street is about to be rocked by secretly recorded audio tapes that purport to show a too-cozy relationship between the New York Federal Reserve Bank and the financial institutions it is supposed to regulate.

The 45 hours of tapes, made by Carmen Segarra, a former NY Fed worker, capture former co-workers, whose job was to keep banks like Goldman Sachs in line, instead deferring to the banks, being unwilling to take action and being extremely passive, according to NPR’s “This American Life,” and ProPublica which obtained the tapes and is scheduled to air a program about the matter Friday night.

Segarra, ironically, was hired by the NY Fed in October 2011 to help toughen up their oversight. She was fired in 2013 after, she claims in a lawsuit, she tried to get Goldman to toe the line on regulations.

The NY Fed has regulators embedded at each of the large banks it oversees. On her first day on the job, Segarra was assigned to Goldman.

The pushback from Goldman started right away. At one of her first meetings, a senior compliance officer at Goldman said certain consumer laws didn’t apply to the bank’s wealthier clients.

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Rick Rule: I Think We Are Seeing A Bullish Transition In The Junior Gold Miners
By: Tekoa Da Silva, 9/26/2014

Full Transcript:

During a time in which few investors are considering the possibility of a recovery in natural resources, Rick Rule, Chairman of Sprott U.S. Holdings was kind enough to share a few comments.

Speaking towards the overall market Rick noted that, “The market itself is very healthy. You are seeing a transition…a transition that doesn’t suggest, but rather screams that [junior resource issues are] under accumulation—which is a very, very bullish sign.”

When asked if the current recovery might outperform the early 2000’s recovery, Rick indicated that, “[S]tatistically, this market shows it can be done because the bear market that preceded this bull market was a bear market that was more severe… bear markets are the authors of bull markets, and the recoveries in some way, shape, or form are related to the declines.”

Here are his full interview comments with Sprott Global Resource Investment’s Tekoa Da Silva:

Tekoa Da Silva: Rick, we had a meeting at our offices here recently, in which all our brokers, money managers, geologists, sat down around a table for what was a fascinating discussion on the resource markets.

You commented at one point during that meeting that we’re beginning to see a stair step formation building in the charts of the resource market; a series of higher highs and higher lows, suggesting a move of paper from weak hands to strong. Can you talk about that for our readers?

Rick Rule: Sure. I’m not a technical analyst but I have some friends who I think are fairly adept at this, [so I’ll say that], the chart pattern we’re seeing in the junior mining market in particular (but in the precious metals markets as well) is sort of a saucer-shaped recovery that is a slow, gradual recovery featuring higher highs and higher lows.

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Tapes showing meek oversight of Goldman are about to rock Wall Street
By Post Staff Report
September 26, 2014 | 10:51am

Wall Street is about to be rocked by secretly recorded audio tapes that purport to show a too-cozy relationship between the New York Federal Reserve Bank and the financial institutions it is supposed to regulate.

The 45 hours of tapes, made by Carmen Segarra, a former NY Fed worker, capture former co-workers, whose job was to keep banks like Goldman Sachs in line, instead deferring to the banks, being unwilling to take action and being extremely passive, according to NPR’s “This American Life,” and ProPublica which obtained the tapes and is scheduled to air a program about the matter Friday night.

Segarra, ironically, was hired by the NY Fed in October 2011 to help toughen up their oversight. She was fired in 2013 after, she claims in a lawsuit, she tried to get Goldman to toe the line on regulations.

The NY Fed has regulators embedded at each of the large banks it oversees. On her first day on the job, Segarra was assigned to Goldman.

The pushback from Goldman started right away. At one of her first meetings, a senior compliance officer at Goldman said certain consumer laws didn’t apply to the bank’s wealthier clients.

“I was shocked,” Segarra tells a reporter for the NPR show, adding that her notes on the meeting had that exact line.

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