Posted at 8:36 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The latest from John Williams’

- A "False Dawn" It Is
- Hyperinflation Forecast Remains in Play
- Stock Crashes versus October Residual-Squirrelling Instincts
- Durable Goods Orders Crashed 18.0% (-18.0%), Reversing July’s 22.2% Surge, Dominated Again by Irregular Commercial-Aircraft Orders
- Down for the Month, August Existing-Home Sales Were in Tenth Month of Annual Decline
- August New-Home Sales Surge of 18.0% Was Statistically-Insignificant

"No. 661: "False Dawn," Hyperinflation, Durable Goods Orders, Home Sales"


Attorney General Eric Holder, Prominent Liberal Voice in Obama Administration, Is Resigning

WASHINGTON — Attorney General Eric H. Holder Jr. is resigning, the Justice Department said Thursday, but plans to remain in office until a successor is confirmed.

Mr. Holder, the 82nd attorney general and the first African-American to serve in that position, had previously said he planned to leave office by the end of this year.

Particularly in President Obama’s second term, Mr. Holder has been the most prominent liberal voice of the administration, leading its push for same-sex marriage and voting rights.

After the recent shooting of an unarmed black teenager by a white police officer, Mr. Holder volunteered to go to Ferguson, Mo., as the administration’s emissary.

Nobody else in the administration, Obama included, has done nearly as much to protect and support the rights of African Americans.

A senior White House official said the president was “a long way” from announcing Mr. Holder’s replacement. Frequently mentioned candidates for the job include: Kathryn Ruemmler, the former White House counsel; Gov. Deval Patrick of Massachusetts; Solicitor General Donald B. Verrilli Jr.; former Gov. Jennifer M. Granholm of Michigan; Senator Sheldon Whitehouse, Democrat of Rhode Island; and Loretta E. Lynch, the United States attorney in Brooklyn.


Russian draft law would allow seizure of foreign property
By Alexei Anishchuk

MOSCOW (Reuters) – Russian courts could get the green light to seize foreign assets on Russian territory under a draft law intended as a response to Western sanctions over the Ukraine crisis.

The draft, which was submitted to parliament on Wednesday by a pro-Kremlin deputy, would also allow state compensation for an individual whose property is seized in foreign jurisdictions.

Italian authorities this week seized property worth about 30 million euros ($40 million) belonging to companies controlled by Arkady Rotenberg, an ally of President Vladimir Putin targeted by the U.S. and European Union sanctions.

The draft law, published on a parliamentary database, would allow for compensation for Russian citizens who suffer because of an "unlawful court act" in a foreign jurisdiction and clear the way to foreign state assets in Russia being seized, even if they are subject to international immunity.

Boris Nemtsov, a Kremlin critic who in the late 1990s was a senior member of government, said the bill was an attempt by Putin to shield Russian billionaires and officials from the impact of sanctions.

"What is a strongman’s friendship like?" he asked rhetorically on his Facebook page. "It is when your four villas, apartment and hotel are seized in Italy, and your accomplice in the Kremlin immediately introduces a bill to compensate for the losses from the Russian budget."


Jim Sinclair’s Commentary

Sanctions will be ignored after the first frost in Europe.

U.K. Seeks to Criminalize Manipulation of 7 Benchmarks
By Gavin Finch and Nicholas Larkin
September 25, 2014 4:53 AM EDT

“The integrity of the City matters to the economy of Britain,” Economic Secretary to the Treasury Andrea Leadsom said in the statement.

The U.K. government plans to criminalize the manipulation of seven more benchmarks in markets from foreign exchange to gold and oil as it tries to revive confidence in the integrity of London as a financial center.

The Treasury today started a review into whether it should extend legislation regulating the London Interbank Offered Rate to cover other key rates including the WM/Reuters 4 p.m. London currency fix, the Sterling Overnight Index Average, the London gold fixing and the ISDAFix, according to a statement. The government aims to have the rules in place by the year-end — five months before the next general election.



Jim Sinclair’s Commentary

Gold consumption in India is a part of the Indian culture and tradition.

50 tonne gold smuggled into India in 10 days, 30% reached Mumbai
Manish Pachouly, Hindustan Times Mumbai, September 23, 2014
First Published: 22:01 IST(23/9/2014) | Last Updated: 22:05 IST(23/9/2014)

About 50 tonne gold has been smuggled into the country in the past 10 days, and subsequently pushed into the market to cater to a surge in demand for the precious metal in the festive season. There is a heavy demand for gold during Dussehra, for which booking and supply will start from Thursday, when shradh ends and Navratri starts.

Market sources said that 30% of the smuggled gold has been supplied in Mumbai to unscrupulous jewellers, while the rest was distributed to different parts of the country.

Sources said that illegal gold is finding a place in the market because of below average import resulting from the 80:20 scheme and 10% import duty. Against the average monthly demand of 80 tonne, the import is presently around 51 tonne in the country.

Sources said that gold was smuggled into the country through the land route, via Nepal, Bhutan, Bangladesh and Pakistan. “This is because airports have tightened security, restricting the smuggling of gold by the air route,” said a market expert. The Mumbai airport customs, which has started a serious crackdown on gold smugglers, has seized around 529 kg gold from April to August this financial year.

Experts fear that more gold will be smuggled from similar land routes in days to come, as the demand will shoot up once the marriage season begins, in the later part of November. “There will be huge demand because of the festive season, and also the low price at which gold is presently being traded,” said Kumar Jain, vice-president of Mumbai Jewellers’ Association.


U.S. durable-goods orders sink record 18.2% in August on fewer jet contracts
Published: Sept 25, 2014 8:30 a.m. ET
By JeffryBartash

WASHINGTON (MarketWatch) – Orders for durable U.S. goods plunged by a record 18.2% in August after a record 22.5% gain in July, mainly because of up-and-down demand for airplanes. Orders rose by 0.7% if the volatile transportation sector is stripped out and business investment also increased, government data showed, a sign that companies continue to spend at a moderate pace. Economists surveyed by MarketWatch had expected orders to fall by a seasonally adjusted 17.3%. Orders for core capital goods – a broader measure of business investment – climbed by 0.6% in August, the Commerce Department said Thursday. Shipments of core capital goods, a category used to calculate quarterly economic growth, edged up by 0.1% and rose for the fourth straight month.


Jim Sinclair’s Commentary

It seems unlikely in our world but maybe.

Britain eyes Libor abuse powers for oil, gold markets
Sep. 25, 2014, 3:48 AM

A statement from the Treasury said the government wished to extend the legislation to the London Gold Fixing and the LMBA Silver Price

London (AFP) – Britain on Thursday said new powers to punish rigging of Libor interest rates with criminal sanctions should be extended for seven major benchmarks, drawing in oil, gold and currency markets.

"The government has today launched a consultation on extending the new legislation the government put in place to regulate Libor to cover further benchmarks in the foreign exchange, fixed income and commodity markets," said a statement from the Treasury.

The government said it wished to extend the legislation to the London Gold Fixing and the LMBA Silver Price, which determine the price of gold and silver in the London market.

Also targeted is the ICE Brent futures contract, "which acts as the crude oil futures market’s principal financial benchmark", the Treasury said.

The government wants to extend the legislation to cover also the WM/Reuters 4pm London Fix, or "dominant global foreign exchange benchmark" and the ISDAFix, described as the "principal global benchmark for swap rates and spreads for interest rate swap transactions".


Posted at 8:32 AM (CST) by & filed under Jim's Mailbox.


Many of your readers believe the price of gold is going down because of heavy selling pressure. I believe that is NOT the case at all. It’s all about the Dollar.

Even if no gold changed hands it would still be revalued if the dollar strengthens or weakens. Without any trading in gold, if the dollar strengthens, the price of gold will drop because it will take fewer dollars to buy the stuff.

Quite simple really.

No need to panic. When the dollar does turn for the worse, you could see gold soar by $100 an ounce in a single day, whether people are buying it or even selling it.

As for the equity markets, theoretically stocks go higher on a weak currency (as we are seeing in Japan’s soaring TOPIX), and drop on a stronger currency.

The first question that comes to mind of many is : “Then why are US stocks rising along with a rising dollar?”

The answer is twofold…

Answer 1:  Central Bank intervention. They are supporting the stock market (against their mandate, mind you). They don’t want panic to ensue. They want to keep the public believing that stocks won’t go down and support the “wealth effect”.


Answer 2: They are providing a back door exit for major institutions to get out of the market, unnoticed and without major panic selling. Not everyone will fit through the exit door when the markets turn. The Fed will supply the liquidity in to aid the funds in exiting this overblown bubble. Oh, and don’t forget what Yellen said: to paraphrase her… "the market is too complacent about the ‘extended period of time." Meaning, get ready for some corrective action to deflate the markets.

What goes up, must come down. Sir Isaac Newton didn’t come upon the notion of gravity by way of a falling apple, it was a falling market in the South Sea bubble! (just my take).

With solidarity and faith,
CIGA Wolfgang

Posted at 11:05 AM (CST) by & filed under Jim's Mailbox.


I continue to hold my gold and shares. What is continuing to make the dollar rise so strongly? When will the tide turn or begin to turn for us? Why didn’t the shares rise with the market? Will they be hit when the market turns down?

Thank You for all you do,
CIGA George


The fall in the euro due to Russian sanctions is the reason the dollar is higher by mirror image price.



Just another indicator that the bubble is starting to burst

CIGA Craig

NYC Luxury-Condo Buyers Await New Towers as Sales Slow
By Oshrat Carmiel Sep 24, 2014 8:02 AM MT

Sales at One57, the ultra-luxury Manhattan condominium tower that set off a high-end residential construction boom, have slowed to a trickle amid competition from newer properties reaching the market.

Only two units at Extell Development Co.’s Midtown property went under contract this year through June 30, according to filings on the Tel Aviv Stock Exchange, where the company sells debt to investors. There were no sales in the final three months of 2013 at the building, which had earlier found buyers for two penthouses at more than $90 million each. About 25 of the 94 units on the market were unsold as of June 30, the filings show.

“This is not a normal pace,” Jonathan Miller, president of New York-based appraiser Miller Samuel Inc., said in an interview.“This building had many price increases when it was the only building out there, so maybe they overdid it. In other words, the sky is not the limit.”


Posted at 11:04 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

If you delete the increased price per unit this is the true report on housing units sold.


Jim Sinclair’s Commentary

This would have a dynamic and positive impact on gold price long term.

"Get To Work Mr. Chinese Chairman": China Set To Fire Its Central Bank Head, Unleash The Liquidity Floodgates
Submitted by Tyler Durden on 09/24/2014 – 11:12

In what is certainly the most impotant news of the day, the WSJ reports that China’s long-serving central banker Zhou Xiaochuan, "the face of the Chinese economy to markets globally" is about to be given the boot. According to the WSJ, "Chinese leader Xi Jinping is considering replacing Mr. Zhou, say party officials, as part of a wider personnel reshuffle that also comes after internal battles over economic reforms." And while it is true that at the age of 66, Zhou has passed China’s retirement age, and his departure will be spun as an old man spending more time with his family, the reality is that this is part of a major Chinese shift in the "balance of power between reformist and reactionary forces, with the momentum for reforms being eroded by the loss of growth momentum in the economy," said Eswar Prasad, a Cornell University China expert. Zhou’s replacement: a career banker, who will do the bidding of, you guessed it, banks, which means "liquidity to the max."


How Much Gold Is Really Out There? …Not Enough!
Author : Bill Holter
Published: September 24th, 2014

How much gold is really out there?  This is a good question and rather than debate whether the “official” statistics are correct or not I will assume they are.  I will make this assumption because even if they are true (which they are not), the financial ship is seriously out of balance and listing badly.

The official total number on a global basis is estimated to be just over 170,000 tons.  Of this figure, the tally comes to around 32,000 tons held by central banks.  At the current price of gold, the total above ground supply comes to a little over $6 trillion and central banks hold a little over $1 trillion.  If we break this down further and look at it from a U.S. centric standpoint, we claim to have 8,133 tons, let’s call this $300+ billion.

The title’s question “how much gold is out there?” is misleading.  I say “misleading” because there are two (as many as there are currencies) numbers, one by weight and the other by dollars (or whatever currency you use).  Looking at this from a dollar standpoint is the easiest way to gain perspective.  If total above ground supply comes to little more than $6 trillion, we can make some comparisons.  For instance, the Fed’s balance sheet is over $4 trillion, or the U.S. economy is now about $17 trillion in size and our “funded” national debt is close to $18 trillion.  I have seen studies where if you include “un” funded debt and promises, the U.S. is on the hook for $200 trillion in total but this number is too out of control to compare to our “gold held.”

So the U.S. holds $300 billion in gold …or maybe not, but assuming this is the case, let’s put it in perspective.  Our “family jewels” that amount to $300 billion is about 1/15th of the $4+ trillion Fed balance sheet.  If we compare our gold hoard to the economy in total we come to a number just under 1/60th.  More importantly, if we compare gold held to our national debt we also get a number of 1/60th.  If we compared the amount of U.S. gold to our total of funded and unfunded obligations we get a really foolish number of close to 700.  In other words, we “owe” almost 700 times as much “money” as we have gold.



New Home Sales Explode Higher Thanks To… Record High Average New Home Prices?
Tyler Durden on 09/24/2014 10:12 -0400

New Home Sales rose a magnificent (seasonally-adjusted annualized rate) 18% in August – the biggest monthly rise since January 1992 albeit with a 16.3 90% confidence interval, meaning the final number may well be +1.7%. At 504k, new home sales are back at May 2008 levels (though obviously massively below the 1.4 million homes sold at the peak in 2005). As a reminder, May’s 504K new home sales print was later revised later to 458K. But even more stunning, new home sales in The West rose a mind-numbing 50% in August (and up 84.4% YoY – nearly double).

And just to confuse matters, the average new home sale price rose to a new record high of $347,900. So as existing home sales are sliding (and prices dropping), new home sales are surging (to new record highs) – makes perfect sense. We await the extrapolations for how great this move is. (or the realization that it is entirely seasonal-adjustment-biased and unsustainable given the realities of mortgage applications).

New home sales rose the most since 1992:


But only back to late 2008 levels


As new home prices rip to record highs;


Which, even more paradoxically, happens as housing expert Trulia admits the US is building too many single family homes. To wit:


In Fed and Out, Many Now Think Inflation Helps
Published: October 26, 2013

WASHINGTON — Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough.

Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment.

The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Obama’s nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the economy is weak. Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly.

The school board in Anchorage, Alaska, for example, is counting on inflation to keep a lid on teachers’ wages. Retailers including Costco and Walmart are hoping for higher inflation to increase profits. The federal government expects inflation to ease the burden of its debts. Yet by one measure, inflation rose at an annual pace of 1.2 percent in August, just above the lowest pace on record.

“Weighed against the political, social and economic risks of continued slow growth after a once-in-a-century financial crisis, a sustained burst of moderate inflation is not something to worry about,” Kenneth S. Rogoff, a Harvard economist, wrote recently. “It should be embraced.”


Posted at 12:47 PM (CST) by & filed under In The News.

U.S. Conducts First Airstrikes in Syria on Islamic State
By Tony Capaccio  Sep 22, 2014 10:36 PM ET 

Sept. 23 (Bloomberg) — Ian Bremmer, president at Eurasia Group, discusses how the U.S.-led coalition against the Islamic State is coming together, what it means for U.S. policy in the Mideast and why it complicates a nuclear deal with Iran. He speaks on “Bloomberg Surveillance.”

The U.S. conducted its first airstrikes in Syria, a barrage of attacks joined by partner nations in a major expansion of President Barack Obama’s effort to “degrade and ultimately destroy” Islamic State.

“U.S. military and partner nation forces are undertaking military action against ISIL terrorists in Syria using a mix of fighter, bomber and Tomahawk Land Attack Missiles,” Rear Admiral John Kirby, the Pentagon press secretary, said tonight in an e-mailed statement.

The U.S. is seeking to reverse the advances of Islamic State, a Sunni extremist group that has seized a swath of territory across Iraq and Syria. The U.S. has conducted more than 190 airstrikes against Islamic State targets, all of them in Iraq until now. ISIL is an acronym for the group’s former name.

While Kirby said he couldn’t provide any details because “these operations are ongoing,” the partner nations joining in the attacks were Saudi Arabia, Jordan, the United Arab Emirates and Bahrain, the Washington Post said, citing two U.S. defense officials it didn’t identify.



Putin, Ban Ki-moon Commend Minsk Agreements on Truce in Southeastern Ukraine: Kremlin
Updated 01:13 a.m. Moscow time.

MOSCOW, September 23 (RIA Novosti) – Russian President Vladimir Putin and UN Secretary General Ban Ki-moon discussed in a phone conversation situation in Ukraine and commended the Minsk agreements on truce in southeastern Ukraine, the Kremlin said on Tuesday.

"The crisis situation in Ukraine has been discussed. Both sides gave a positive evaluation to the agreements upon a general ceasefire in southeast of the country, reached on a meeting of a contact group in Minsk," the Kremlin press service said in a statement.

In mid-April, Kiev authorities launched a special military operation to suppress independence supporters in the southeast of Ukraine.

The Ukrainian government forces and southeastern Ukraine’s independence supporters agreed on a ceasefire and an "all-for-all" prisoner exchange on September 5 at a meeting of the Contact Group on Ukraine held in the Belarusian capital of Minsk.


Ebola Cases Could Reach 1.4 Million Within Four Months, C.D.C. Estimates

Yet another set of ominous projections about the Ebola epidemic in West Africa was released Tuesday, in a report from the Centers for Disease Control and Prevention that gave worst- and best-case estimates for Liberia and Sierra Leone based on computer modeling.

In the worst-case scenario, the two countries could have a total of 21,000 cases of Ebola by Sept. 30 and 1.4 million cases by Jan. 20 if the disease keeps spreading without effective methods to contain it. These figures take into account the fact that many cases go undetected, and estimate that there are actually 2.5 times as many as reported.

In the best-case model, the epidemic in both countries would be “almost ended” by Jan. 20, the report said. Success would require conducting safe funerals at which no one touches the bodies, and treating 70 percent of patients in settings that reduce the risk of transmission. The report said the proportion of patients now in such settings was about 18 percent in Liberia and 40 percent in Sierra Leone.

The caseload projections are based on data from August, but Dr. Thomas R. Frieden, the C.D.C. director, said the situation appeared to have improved since then because more aid had begun to reach the region.


Jim Sinclair’s Commentary

It is a dream if you are referring to a nightmare.

Derivatives industry calls global reporting plan a dream
LONDON Tue Sep 23, 2014 9:20am EDT

(Reuters) – Plans for a global snapshot of risks in the financial derivatives market are a "dream" that must not detract regulators from tackling discrepancies in trade reporting, a top industry official said on Tuesday.

Following market mayhem after the collapse of Lehman Brothers bank in 2008, the Group of 20 economies (G20) agreed that data should be collected on who holds derivatives contracts like interest rate or credit default swaps.

The aim is to have a snapshot of who is exposed to any failing lender and where risks are building up in the market.

But so far 25 trade repositories in 11 countries have been set up to collect data, making it impossible for regulators to obtain the timely, clear picture they are looking for.

Last week, the G20′s regulatory task force, the Financial Stability Board (FSB), published proposals for a mechanism to collate and share data from repositories.

Scott O’Malia, appointed chief executive of the International Swaps and Derivatives Association (ISDA) in July, said such a global plan was for the future.


China Moves To Dominate Gold Market With Physical Exchange
Published in Market Update  Precious Metals  on 22 September 2014
By Mark O’Byrne

Shanghai Gold Exchange International Board
China is slowly moving to dominate the global gold market and it is important to join the dots regarding a few key recent developments in China relating to gold.

When the International Board of the Shanghai Gold Exchange (SGE) was launched last Thursday September 18 during an evening trading session, it was notable that the first transactions were put through by a diverse group comprising HSBC, MKS (Switzerland), and the Chinese banks,  ICBC, Bank of China and Bank of Communications.

MKS is the Geneva headquartered precious metals trading group that also owns the large PAMP refinery company in Switzerland.

There are reportedly 40 international participants signed up to trade on the SGE International Board (SGEI), but the SGE hasn’t specifically confirmed the identities of all participants.

Like the domestic SGE which counts precious metals refineries as members, the SGEI will have a diverse group of trading participants including a number of international refineries as well as bullion banks and trading houses.

Precious metals refineries Metalor Technologies and Heraeus have confirmed that they will be participants and along with MKS, this represents three of the largest gold refineries in the world.


Homelessness increases among US school children: Federal data

The number of homeless children is rising in the United States and a record number of American students enrolled in public schools were homeless last year, according to data by the US government.

Approximately1.3 million homeless children were enrolled in US schools in the 2012-2013 school year, an increase of 8 percent from the previous school year, statistics released by the US Education Department on Monday showed.

A main factor that has increased homelessness is a lack of affordable housing, forcing many families to live in the streets, shelters, motels or to double up with other families, said Jeremy Rosen, director of advocacy at the National Law Center on Homelessness & Poverty.

"This problem continues to get worse because in terms of government programs and support for homelessness, budgets have been cut in recent years, and there’s less affordable housing available," said Rosen.

“The new data means that a record number of kids in our schools and communities are spending restless nights in bed-bug infested motels and falling more behind in school by the day because they’re too tired and hungry to concentrate,” said Bruce Lesley, President of the First Focus Campaign for Children.


Posted at 12:23 PM (CST) by & filed under In The News.

China Moves To Dominate Gold Market With Physical Exchange
Posted Monday, 22 September 2014

Shanghai Gold Exchange International Board
China is slowly moving to dominate the global gold market and it is important to join the dots regarding a few key recent developments in China relating to gold.

When the International Board of the Shanghai Gold Exchange (SGE) was launched last Thursday September 18 during an evening trading session, it was notable that the first transactions were put through by a diverse group comprising HSBC, MKS (Switzerland), and the Chinese banks,  ICBC, Bank of China and Bank of Communications.

MKS is the Geneva headquartered precious metals trading group that also owns the large PAMP refinery company in Switzerland.

There are reportedly 40 international participants signed up to trade on the SGE International Board (SGEI), but the SGE hasn’t specifically confirmed the identities of all participants.

Like the domestic SGE which counts precious metals refineries as members, the SGEI will have a diverse group of trading participants including a number of international refineries as well as bullion banks and trading houses.


Rigged Gold Price Distorts Perception of Economic Reality
Paul Craig Roberts and Dave Kranzler

The Federal Reserve and its bullion bank agents (JP Morgan, Scotia, and HSBC) have been using naked short-selling to drive down the price of gold since September 2011. The latest containment effort began in mid-July of this year, after gold had moved higher in price from the beginning of June and was threatening to take out key technical levels, which would have triggered a flood of buying from hedge funds.

The Fed and its agents rig the gold price in the New York Comex futures (paper gold) market. The bullion banks have the ability to print an unlimited supply of gold contracts which are sold in large volumes at times when Comex activity is light.

Generally, on the other side of the trade the buyers of contracts are large hedge funds and other speculators, who use the contracts to speculate on the direction of the gold price. The hedge funds and speculators have no interest in acquiring physical gold and settle their bets in cash, which makes it possible for the bullion banks to sell claims to gold that they cannot back with physical metal. Contracts sold without underlying gold to back them are called “uncovered contracts” or “naked shorts.” It is illegal to engage in naked shorting in the stock and bond markets, but it is permitted in the gold futures market.

The fact that the price of gold is determined in a futures market in which paper claims to gold are traded merely to speculate on price means that the Fed and its bank agents can suppress the price of gold even though demand for physical gold is rising. If there were strict requirements that gold shorts could not be naked and had to be backed by the seller’s possession of physical gold represented by the futures contract, the Federal Reserve and its agents would be unable to control the price of gold, and the gold price would be much higher than it is now.

Gold price manipulation is used when demand for delivery of gold bullion begins to put upward pressure on the price of gold and hedge funds speculate on the rising price of gold by purchasing large quantities of Comex futures contracts (paper gold). This speculation accelerates the upward move in the price of gold. The TF Metals Report provides a good description of this illegal manipulation of the gold market:

“Over a period of 10 weeks to begin the year, the Comex bullion banks were able to limit the rally to only 15% by supplying the “market” with 95,000 brand new naked short contracts. That’s 9.5MM ounces of make-believe paper gold or about 295 metric tonnes.


Jim Sinclair’s Commentary

Blowback can be tough.

Russia FinMin Calls For Shift Away From US Treasurys Into BRIC Bonds, Settlement In Non-Dollar Currencies
Tyler Durden on 09/20/2014 21:43 -0400

It is no secret that Russia has had enough of the Petrodollar, and in light of ongoing western sanctions – which many view not so much as a reaction to events in Ukraine bur merely as an attempt to halt the Russian revolution against the Petrodollar status quo, crushing its economy before the momentum grows and more countries join Moscow – is constantly thinking of ways it can ditch the dollar as a medium of exchange as fast as possible. The problem is that when it comes to retaliating against the West, Russia – short of declaring an embargo on USD payments for its commodities – has little control over what currency its western trading partners will pay in. So instead it is focusing on its net exporting peers, aka the BRICS, with whom as previously reported, Russia had launched a "bank" alternative to the IMF when it comes to backstop and bailout funding, one that avoids reliance on the SDR, the USD, and on Western empathy.

It is the same BRICs that, Russia’s Prime Minister Dmitry Medvedev, told Rossiya TV in an interview earlier today, should conduct transactions in national currencies, bypassing cross-rates with the US Dollar, adding that "we can easily make mutual settlements directly," and the mechanism should be beneficial to both sides of transactions.

And if it wasn’t clear by now, Russia pivot away from the west and toward China is pretty much complete.Medvedev also said that "our collaboration with China is of strategic importance. We have great, brilliant political contacts, we have excellent economic relations. [China] is our strategic partner, and we are interested in expanding the volume of cooperation. We are not afraid of collaborating because we are confident that this is equal, friendly and mutually beneficial collaboration in all areas."

Meanwhile, regarding escalating Western tensions, the PM said that sanctions have created a bad situation for Russian banks on financial markets, all sources of liquidity are frozen. "We regard this as a senseless and ugly decision toward Russia, but we’ll manage without it." So does that mean that China will step in to provide the required FX reserves as Russia minimizes its USD exposure? Perhaps, but not entirely: Medvedev did add that "Asia, other markets “unlikely fully” to compensate for frozen European financing."


Posted at 10:20 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Why are we worried when our Mexican border is completely open to everyone? Come on government officials, pick up your knuckles when you walk

US F-22 Jets Intercept 6 Russian Warplanes 55 Miles Off The Alaskan Coast
Tyler Durden on 09/20/2014 10:31 -0400

Yesterday it was the UK which scrambled a squadron of Typhoon jets when two Russian Tu-95 "Bear" Bombers had gotten too close to its shores, even if still located in international space. Then overnight, none other than the US did the same when two F-22 fighter jets intercepted six Russian military airplanes just over 50 miles away from the western coast of Alaska, military officials said Friday, among which identified as two IL-78 refueling tankers, two Mig-31 fighter jets and the same two "Bear" long-range bombers, which are known to carry tactical ICBMs with nuclear warheads among their arsenal.

According to the AP, they looped south and returned to their base in Russia after the U.S. jets were scrambled.

Lt. Col. Michael Jazdyk, a spokesman for the North American Aerospace Defense Command, or NORAD, said the U.S. jets intercepted the planes about 55 nautical miles from the Alaskan coast at about 7 p.m. Pacific time Wednesday.

Additionally, at about 1:30 a.m. Thursday, two Canadian CF-18 fighter jets intercepted two of the long-range bombers about 40 nautical miles off the Canadian coastline in the Beaufort Sea.

In both cases, the Russian planes entered the Air Defense Identification Zone, which extends about 200 miles from the coastline. They did not enter sovereign airspace of the United States or Canada.

Jazdyk said the fighter jets were scrambled “basically to let those aircraft know that we see them, and in case of a threat, to let them know we are there to protect our sovereign airspace.”


Emergency lockdown in Sierra Leone: 6mn confined to homes in bid to contain Ebola
Published time: September 20, 2014 11:55
Edited time: September 20, 2014 14:24

All Sierra Leone’s six-million population have been confined to their homes. The three-day shutdown is a desperate bid to fight the outbreak, as US health officials warn the disease could spread to over half a million people.

"Today the life of every one is at stake, but we will get over this difficulty if all do what we have been asked to do," President Ernest Bai Koroma said in a national address on Thursday, a day before the shutdown was due to come into force.

People were in a hurry ahead of the edict to buy food. Shopkeepers were distraught at the prospect of losing three days’ worth of income, given that much of the country’s population, including the capital Freetown, live on as little as $2 a day or less. Each day is a struggle.

"If we do not sell here we cannot eat," one vegetable vendor told the AP. "We do not know how we will survive during the three-day shutdown."

The shutdown has left only essential security and medical personnel, as well as volunteers, patrolling the streets, making door-to-door visits to search for disease-stricken civilians who may be hiding.

Thousands have been reported to be evading the lockdown, bypassing the border health controls, reported Euronews. Health officials told the channel that people were breaking through the bush in waves, fearing they could be taken away if discovered to be carrying the virus.


War over? Both sides in Ukraine conflict sign treaty banning military action
Published time: September 19, 2014 23:59
Edited time: September 20, 2014 10:35

Kiev and self-defense forces signed a memorandum aimed at effectively halting all fighting in eastern Ukraine after talks in Minsk. It creates a buffer zone, demands a pullback of troops and mercenaries, and bans military aviation flybys over the area.

The signed memorandum consists of nine points, former Ukrainian president Leonid Kuchma told journalists following peace talks in Minsk, Belarus.

“The first [point] is to stop the use of weapons by both sides; the second is to stop all military and militia units in their positions as of September 19. The third is to ban the use of all types of weapons and offensive action,” former Ukrainian president Leonid Kuchma, who represents Ukraine at the talks, told journalists.

The agreement outlines a buffer zone of 30km free from heavy weapons and bans all military aircraft from flying over the rebel-controlled part of eastern Ukrainian territory. An exception is being made for the surveillance drones used by the OSCE to monitor the situation, Kuchma said.

Kiev said it would start the pull-back of heavy weapons under the agreement starting on Saturday.


Is World Gold Council’s CEO angling for a tin-foil hat?
Submitted by cpowell on 06:40AM ET Saturday, September 20, 2014.
Section: Daily Dispatches
9:41a ET Saturday, September 20, 2014

Dear Friend of GATA and Gold:

MineWeb’s Lawrence Williams reports today an interesting comment by the World Gold Council’s chief executive, Aram Shishmanian, about the opening of the international subsidiary of the Shanghai Gold Exchange

"The growth of the Shanghai Gold Exchange to become the world’s largest physical gold exchange provides compelling evidence that the future for gold is physical," Shishmanian said. "As the market shifts from west to east, the expansion of strong gold trading hubs in Asia will improve price discovery, liquidity, transparency, and efficiency, all of which will transform the landscape of the global gold market."

So, then, does the World Gold Council believe after all that the present gold market is not really physical and transparent at all but rather shadowy and highly manipulated by derivatives and that, as a result, price discovery needs to be improved?

That kind of talk could sound like an application for a tin-foil hat. Williams should ask Shishmanian whether he wants one. We here at GATA’s tin-foil hat factory would be delighted to oblige.

Williams’ commentary is headlined "The Future for Gold Is Physical" and it’s posted at MineWeb here:…

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

Ukraine: rebels and government troops to retreat following peace deal
Agreement calls for creation of a 30km (19 mile) buffer zone between opposing sides with each moving its troops back by 15km
By Tom Parfitt, Moscow
12:00PM BST 20 Sep 2014

Pro-Russian rebels and government forces in Ukraine are expected to retreat from frontline positions on Saturday after a new peace plan was signed following overnight talks.

The nine-point agreement envisages the creation of a 30km (19 mile) buffer zone between the opposing sides, with each moving its troops back by 15km.

Representatives of Russia, Ukraine, the separatists and the Organisation for Security and Cooperation in Europe (OSCE) reached the deal.

A ceasefire between the two warring sides signed on September 5 in Minsk, Belarus, has held despite frequent and serious violations, including shelling that caused numerous civilian deaths.

The new agreement, also reached in Minsk, demands that artillery units should pull back out of range and places a ban on flights by combat aircraft over the conflict zone in eastern Ukraine. It also prohibits the laying of new minefields. OSCE teams will monitor the demilitarised zone, which must be set up within 24 hours of the agreement being signed.

While the plan provides an avenue to calm the hostilities, it does not address the status of the Donetsk and Luhansk regions where pro-Russian separatists have set up two "people’s republics" free from Kiev’s rule.


Algos Gone Wild: BABA "Glitch" Halted 7 Seconds, "100s Of Flash Crashes" Into Close
Tyler Durden on 09/19/2014 16:43 -0400

As business media pats itself on the back for the BABA IPO, proclaiming how it’s the most important, and biggest IPO of all-time and on "the most efficient and transparent" exchange, perhaps it was just oversight that they forgot to mention BABA’s 7-second halt "glitch" this afternoon as BABA trading exceeded 25% of all volume at some points. But that was minor compared to the utter clusterfuck that occurred as AAPL shares started to tumble and, as Nanex points out, 100s of individual stocks instantly flash-crashed and dashed by over 1% at 1550ET as the Russell rebalanced. These are your unrigged, transparent, efficient markets…

Via Nanex, BABA Algo trading was massive…

During the first 20 minutes, $BABA often exceeded 25% of all trading volume in NMS stocks

— Eric Scott Hunsader (@nanexllc) September 19, 2014

BABA’s Glitch…


The BABA 7-second glitch is what happens all the time at much smaller intervals (< 1ms): the source of #HFT profits


G20 nations want Vladimir Putin at summit despite Ukraine tensions
Russian president set to attend the G20 leaders’ summit in Australia despite anger about MH17 and conflict in Ukraine
Friday 19 September 2014 23.40 EDT

Vladimir Putin is set to attend the G20 leaders’ summit in November despite alarm over Russia’s actions in Ukraine.

Australia, which is hosting the gathering, said on Saturday it was the “emphatic” wish of member nations that the Russian president attend.

There had been question marks over whether Moscow should be invited to the high-powered forum in Brisbane with the brutal five-month conflict that has killed around 3,000 people unresolved.

Opposition to Putin’s attendance intensified after a Malaysia Airlines plane was shot down over eastern Ukraine in July, killing all 298 onboard including 38 Australian citizens or residents.

Kiev and the West have accused separatists of downing it with a surface-to-air missile supplied by Russia – a charge Moscow denies.

As the G20’s rotating president, Australia has been canvassing the views of other member nations about what to do. Despite Western concern about Moscow’s territorial ambitions, the Australian treasurer, Joe Hockey, said the consensus was that Russia should attend the leaders’ summit to help address the geo-political tensions.

“If one party is to be excluded for various reasons then it requires the agreement of all parties to the G20,” he said at a meeting of G20 finance ministers and central bank governors in the northern Australian city of Cairns.