Posted at 3:30 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The latest from John Williams’ http://www.shadowstats.com/

- November Freight Index Signaled Continued Weakening Economy and Non-Recovery

- Nonsensical Month-to-Month Volatility in Housing Starts Continued: September Fell 9.6% (-9.6%), October Gained 27.4%, November Fell 18.7% (-18.7%)

- Most-Extreme Reporting Instability Since the Depths of the 1980 Recession

- Smoothed Housing Starts and Permits Held in Non-Recovering, Low-Level Stagnation; Activity Down Respectively by 52% (-52%) and 47% (-47%) from Pre-Recession Peaks

- Broad U.S. Economic Activity Has Continued to Falter

“No. 856: November Housing Starts, Freight Index, Economic Outlook “

http://www.shadowstats.com/

Posted at 1:03 PM (CST) by & filed under Bill Holter.

In an effort to put the Martin Armstrong saga to bed, I post below quotes and links to two articles he put out in 2010 and 2011 just before being released from prison. Please read not just the quotes provided but his full articles as they are both excellent in content and logic. His 2010 article sounds a lot like “Bill Holter” as I have done this math and logic several times for readers over the years. Back then he said “$5,000 gold is “VERY CONSERVATIVE” …while he now says it will be as high as gold can go. In the second article he takes on “manipulation” which he has since changed his tune on.

I would simply ask “why”? Why has he done a 180 degree turn in his thought process? Why did his “change” of heart begin as soon as he was released from prison? Why do people even follow him now as his logic and reporting of history is flawed? I have no doubt he is a brilliant man as he was a pioneer of the derivatives industry, but how brilliant is it to claim that gold was devalued in 1934 …and then go on to explain “why” it happened?

“I have been conservative in what is possible for the years ahead. I have given a number for gold of $5,000 that is VERY CONSERVATIVE. If we take the US gold reserve 262 million ounces and we divide that into the national debt into $14 trillion ignoring the rest of the world, that yields a price of a staggering amount $53,639 per ounce. Even taking the world official gold reserves dividing that into $14 trillion ignoring the rest of the world, we still end up with $15,873 per ounce.” …Martin Armstrong, Nov. 21st 2010

“The sharp spike rally was in line with a Phase Transition in Silver – NOT gold. This has been distinguished by a virtual doubling in price since January. Anytime a market doubles like this in the last few months going into a high, it is the kiss of death. Silver, of course, has not broken out above its 1980 high as did gold. This is largely due to the fact that silver remains the most manipulated precious metal of the entire group. It is routinely played with by the NY crowd and anybody you says such things is immediately attacked with venom. Silver is the playground for the CLUB”…Martin Armstrong, May 2nd 2011

It is clear to me with the above writings, Mr. Armstrong had a full grasp of logic. I would love to hear from him now as to why his logic was wrong …before he saw the light of day as a free man?

Standing watch,

Bill Holter

Holter-Sinclair collaboration

Comments welcome bholter@hotmail.com

Posted at 12:56 PM (CST) by & filed under General Editorial.

We will be doing our normal weekend interview on Monday afternoon to be posted shortly afterwards.Our very special guest will be Mr. Yra Harris so don’t miss this one! This interview may be the last one (unless breaking news needs commentary) for the year as we head into the Christmas week. Bill will have a public article out later today and another for subscribers over the weekend or early next week. Jim will also have an article for subscribers sometime next week on the “mechanics” of how he sees gold will be taken higher. Postings will be spotty between Christmas and the New Year. 

Bill

Posted at 12:40 PM (CST) by & filed under Jim's Mailbox.

Dear all,

Competitive currency devaluations and stronger dollar!! The economy in the us will come to a grinding halt.

Another point of observation when the 10y breaks the 3% the biggest danger from subsequent huge moves will be the interest rate derivatives to the tune of $500-750bn (billion) that can’t be reset when the moves are to steep and volatile!!! Then you really have a meltdown.

Hello gold and silver.

CIGA Gijsbert

Offshore Yuan Crashes To Record Low
December 16, 2016

The derisking following headlines of China seizing a US underwater drone has sparked further weakness in the offshore Yuan, slamming USDCNH to record lows…

Following last night’s big Fix devaluation, and today’s headlines, offshore yuan just hit a fresh record low…

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More…

Posted at 5:14 PM (CST) by & filed under General Editorial.

Jim is travelling today and tomorrow on corporate business but wanted a post to stay in touch.  The Fed action today changes nothing, it may in fact speed up what is going to happen.  Either they get their “reflation” or they don’t.   The “don’t” part is the scary part and would mean debt being crushed in a deflationary collapse.  You must understand deflation is THE best environment possible to own gold.  A deflation means a shrinkage of money supply, in the current case it will be a scarcity of CREDIT.  Gold is money, according to JP Morgan himself, everything else is credit.  Gold is also liquidity.  The two best things to have in a deflation is money and liquidity. 
   Raising rates upon the shoulders of the greatest credit bubble in all of history is not wise.  Every single past crisis was preceded by rising rates…here we go again.  The odds of a deflationary mistake are rising along with interest rates.  Know why you own gold or silver in the first place and know history.  Never before in history has a fiat currency gained value versus gold in outright deflation. 

Jim/Bill

Posted at 12:37 PM (CST) by & filed under Jim's Mailbox.

Jim,

This is not just in Dallas; Fort Worth employees’ pension plans are also in deep trouble.

It is reported that they are underfunded by 38% whilst assuming returns of 8%. Can you tell what a disaster this will be? Only gold and silver will maintain their purchasing power.

CIGA Gijsbert

Not Just Dallas; Fort Worth Employees’ Pension Plan In Deep Trouble
December 13, 2016

Dallas isn’t the only city in Texas with a sick retirement fund. Nearby Fort Worth is also in deep trouble.

Let’s dive into the Comprehensive Annual Financial Report for the Fort Worth Employees’ Retirement Fund for fiscal years ended September 30, 2015 & 2014 to see what we can find.

Fort Worth Retirement Fund

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The Fort Worth “City” Pension plan has a liability of $1.271 Billion

on assets of only $2.094 billion. The plan is 62% funded and covers

389,528 employees.

The “Staff” plan which covers the people running the pension plan is in better shape. But there is only 1,542 people covered.

More…

Jim,

I fully agree with this.

CIGA Gijsbert

25 Cities On The Brink Of Disaster: “Don’t Be Here When Things Get Violent, Unsafe, & Fragile”
December 13, 2016

The 21st Century is inching ever closer towards chaos… and the time to get out of the big city is upon us.

With economic conditions, growing crises, desperate populations looking to scratch by, and more hatred and division than at any previous point in American history, the city has become a dangerous and unruly setting – and finding yourseld in one that is falling apart could be the worst mistake you ever make.

People are living in bigger urban zones than ever before… these megacities are the hotspots of global activity. But many are also proving to be the most dangerous place to be in a collapse. Crime is rampant, order is shaken and many people become willing to take advantage of the situation. Many areas are vulnerable to natural disasters, and have already lost control during past emergencies.

In other places, widespread unemployment is simply taking its toll through increases in theft and violence. Whatever the reason, there are many places where things are falling apart, badly.

More…

Jim,

It’s no wonder workers have abandoned building sites in India since the cash crackdown. When you take cash out of the system you remove the oil that keeps the engine going. Beware when these idiots in the West want to go cashless.

CIGA Gijsbert

Headed Home: Many Workers Abandon Building Sites After Black Money Crackdown
December 13, 2016

Hundreds of thousands of construction workers have returned home since Prime Minister Narendra Modi abolished high-denomination banknotes, leaving some building sites across the country facing costly delays.

A month after Modi’s shock move to take away 86% of cash in circulation to crush the shadow economy, the growing labour shortage threatens to slow a recovery in India’s construction industry, which accounts for 8% of gross domestic product and employs 40 million people.

Work at SARE Homes’ residential projects, spanning six cities, has slowed dramatically as migrant workers, who are out of cash and have no bank accounts to draw from, have little choice but to return to their villages.

More…

Jim,

Need I say more? I don’t know what these people at CNBC smoke but it must be strong.

CIGA Gijsbert

US Productivity Suffers First Two-Quarter Annual Decline Since 1993
December 6, 2016

US Productivity rose a disappointing 3.1% in Q3 (missing expectations of a 3.3% rise). However, on a year-over-year basis, Q3 saw a second consecutive decline – the first two-quarter decline in US productivity since 1993. Unit labor cost growth slowed in Q3 to 3.00% (with QoQ growth tumbling from 6.2% in Q2 to just 0.7% in Q3).

Actually if one looks at the official table US productivity has notr risen YoY since Q4 2015 – (Q1 0.0%, Q2 -0.3%, Q3 -0.05%)

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But, as Fed-induced investment in buybacks crowds out capex, real-worker productivity is collapsing (but buy back productivity is soaring!!).

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More…

Jim,

This is some what absurd, they are not able to confirm. This is quite comical. How about aliens did it? The X File kind.

CIGA Gijsbert

The GAME PLAN: Obama & Hillary Planning To Nullify Election Results Due to ‘Russian Interference’?
December 13, 2016

Do they actually intend to try to steal the presidency from Donald Trump?

For those that have been wondering if the establishment was going to attempt to steal the presidency away from Donald Trump before he can be inaugurated, we now appear to have our answer…

From Michael Snyder:

It has been said that nothing happens by accident in politics, and it is certainly no accident that Barack Obama, Hillary Clinton, members of the U.S. Senate and the mainstream media are all suddenly buzzing about “Russian hacking” and “Russian interference” in our elections.

Over the past 48 hours, the Washington Post, the New York Times, and just about every other major news source in America has been breathlessly telling us that the CIA has concluded that the Russians “intervened” in the presidential election with the specific goal of helping Donald Trump win.

More…

Posted at 12:06 PM (CST) by & filed under Bill Holter.

Jim and I have received many panicked calls and e-mails regarding Martin Armstrong’s latest article. In it he again claims gold will collapse to below $1,000 per ounce and thus the fearful communications.

In this very short article, Armstrong questions whether India will begin gold confiscation suggesting door to door searches for “tax evaders”.

We posted two articles late last year refuting his poor logic and efforts at rewriting history. In the first one, we refuted his claims that markets are not manipulated. Since then of course we have had many settlements by large banks for just that…MANIPULATING MARKETS. Last week saw Deutsche Bank admit to manipulating the gold market and agree to pay a $60 million fine (peanuts) and offer some seriously damaging evidence in the form of captured communications. As they have turned state’s evidence and squealed on others, this will become very interesting no doubt! we would simply ask, are banks in the business of handing out “free money” in the form of $billions if they’ve done nothing wrong? JP Morgan, Citi, DB and many others have coughed up large fines. Was this “largesse” or was it to head off the decapitating legal procedure called discovery?

Then a week or so after the first article, we were forced to pen another one,. Mr. Armstrong truly erred when he made the statement gold was “de”valued against the dollar in 1934. It was no slip of the pen or tongue, he actually tried to rationalize and “explain” how gold was devalued versus the dollar. The fact is, gold was REVALUED over 70% higher versus the dollar in 1934. The claim that “the dollar” was the best performing asset during the Great Depression is outright bogus and why we give zero credence to anything the man now says. We write this today because so many readers have again had the wits scared out of them.

The “timing” is peculiar. India’s (Modi’s) timing of their boondoggle by demonetizing 86% of their paper currency cannot be a coincidence. The action came right on top of India’s wedding season where their international gold purchases are seasonally strongest. It was our opinion right from the start, the action was directly taken to cut off and mute their physical demand and offtake from world markets. The only problem is that it backfired miserably as reports of physical gold changing hands internally within India at $3,000 per ounce and more.

Who couldn’t have seen this one coming? When you cut off supply …and autonomously tell people their “savings” in paper currency have been ostensibly wiped out, what would you expect to happen? Supply and demand still works, price rose as supply has been cut and true demand has had a fire lit under it. If you wanted proof that gold is still seen as a safe haven in the midst of turmoil, here it is! Meanwhile, India’s real economy has crashed unlike nearly anything seen in modern history. Giant Foxconn is eliminating 25% of their workforce due to the monetary insanity. Trucks are littering the sides of the road as the cash does not exist to purchase fuel. The disaster is just beginning, coming days and weeks will surely see “hunger riots”.

A similar question was raised about China over the weekend by Yra Harris regarding an article Kitco ran. What will happen if China decides to stop their importations of gold? Jim and I talked at length about this and then spoke with Yra to get his take on our conclusion should this happen. Wouldn’t the ban of imports cause a huge drop in paper gold prices but not necessarily cash price? The answer is yes, no, and we may well see the “mechanism” to reset global markets if we do.

Looking at China following India’s lead was an interesting thought process if you follow it through to the end. The fear of crashing price by “cutting off demand” is logical only if you stop the process before finishing the to the final answer. You see, were China to preclude gold imports, the immediate reactions by COMEX and LBMA would most probably be a crash …maybe even a $500 crash! Would that matter? Again, yes and no but stay with me to the end. “Price” in the West may crash, but “what” exactly is it the price “of”?

Paper prices may very well crash …while price for real gold within China goes to the moon. We are already seeing large spreads existing between Shanghai and COMEX, these would only get larger and expose one market as …not really a market. Will the Chinese look at COMEX prices and shun physical or in the ground gold? Or will they look at what real gold is changing hands at inside of China and decide to “arbitrage” it out of the ground (and from Western vaults) and into their own market?

This is the crux of what we theorized. Yes, it is certainly possible to see paper prices collapse from here and possibly sparked by China banning imports (temporarily). Set in motion would be paper prices dropping and physical markets rising (something I have written about since 2007 and spoke of since early 2000′s). China (official state) would then “purchase” and demand delivery of ridiculously cheap gold (while there is still inventory left to deliver). As Jim put it during our last weekend interview, “you could see COMEX gold at $10 offered and no bid with Chinese cash markets $5,000 bid and no offer”.

China (Russia and India) will ultimately “make price” as they are the physical markets and collectively have more gold than the West (please don’t reply with GFMS or World Gold Council numbers as they are laughable). A “reset” of global finance is certainly coming, the only questions are how, when and how much? We believe the event will be very rapid, probably over a weekend but China could force a reset via Mother Nature and arbitrage in a slower manner. Real gold will find its way into India (and China should they ban imports) simply due to the human characteristic of profit motive and black markets. Once Western vaults are emptied, who do think will “make price”? Those who don’t have it but suddenly want it, or those who have it and always wanted it? If we were running China, this is the exact mechanism we would use to remonetize gold and silver …and remonetizing metal is exactly what we believe they have wanted to do for many, many years!

To finish, Martin Armstrong was wrong about gold during the Great Depression even with the benefit of recorded history. Now, he could possibly be correct regarding the direction of his invention of derivative contracts … but we believe he is entirely wrong about the underlying physical product. One thing is certain, should the current paper versus physical pricing spread continue and expand, Netjets will become a great investment as a freight carrier for arbitrage!

Standing watch,

Bill Holter,

Holter-Sinclair collaboration

Comments welcome bholter@hotmail.com