Posted at 4:00 PM (CST) by & filed under Jim's Mailbox.

Jim,

It sure looks like the Boston Fed is throwing in the towel. They are recommending QE forever.

CIGA Miki

Boston Fed Admits There Is No Exit, Suggests QE Become “Normal Monetary Policy”
Submitted by Tyler Durden on 04/26/2015 21:00 -0400

Perhaps it was inevitable. After all, the term “QEfinity” entered the financial lexicon long ago and there were already quite a few commentators out there suggesting that it may now be too late to remove the punchbowl, meaning an “exit” will not only prove difficult, but may well be impossible.

Take Makoto Utsumi, who oversaw foreign-exchange policy at the Japanese Ministry of Finance from 1989-1991, for example. Utsumi recently said a BoJ QE exit was out of the question “for the foreseeable future” and went on to note that “even the thought of an exit is a nightmare.” Meanwhile, it’s virtually impossible to say what effect Fed tightening will have in both the Treasury and corporate bond markets given the lack of liquidity in both and then there’s EM where carnage unfolded in 2013 after a certain bearded bureaucrat said the wrong thing about the direction of Fed policy.

Given all of this, we’re not surprised to learn that in a new paper entitled “Let’s Talk About It: What Policy Tools Should The Fed ‘Normally’ Use?”, the Boston Fed is now suggesting that QE become a permanent tool at the disposal of the Fed. After all, “financial stability” depends on it…

During the onset of a very severe financial and economic crisis in 2008, the federal funds rate reached the zero lower bound (ZLB). With this primary monetary policy tool therefore rendered ineffective, in November 2008 the Federal Reserve started to use its balance sheet as an alternative policy tool when it began the large-scale asset purchases. Now attention is turning to how the Fed should transition back to a more conventional monetary policy stance. Largely missing from these discussions about the Fed’s “exit strategy” is a consideration that perhaps it should retain, not discard, the balance sheet tools.

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Posted at 11:04 AM (CST) by & filed under Jim's Mailbox.

Jim,

Woah! Forever QE? The Fed’s Dual Mandate is now a “Tri” Mandate.

"Yes, oddly missing from the Fed’s exit strategy is the idea that there should be no exit.

Of course the idea that what was previously “unconventional” policy should now become “conventional” is supported by Fed mission creep because now, the dual mandate has apparently become a “tri” mandate:

Since the Dodd-Frank Act (DFA) has added maintaining financial stability to the Fed’s existing dual mandate to achieve maximum sustainable employment in the context of price stability, it might be beneficial to have several tools to achieve multiple policy objectives. An additional consideration is that some of these tools may be needed to stem future crises as a result of the DFA’s new limitations on how the Fed can provide liquidity under such adverse circumstances.

The particularly amusing thing here is that if the Fed’s third mandate is promoting financial stability then they’re doing a rather poor job of it so far and asset purchases are the primary reason why.”

CIGA Wolfgang R Newsmeister

Boston Fed Admits There Is No Exit, Suggests QE Become "Normal Monetary Policy"
Tyler Durden on 04/26/2015 – 21:00

"Largely missing from these discussions about the Fed’s "exit strategy" is a consideration that perhaps it should retain, not discard, the balance sheet tools," the Boston Fed says, in a new paper advocating the retention of QE as a permanent part of the Fed’s tool box. QEfinity may yet become a reality and for the most ironic of reasons: because the Fed is now in charge of promoting "financial stability" something which, as last October’s Treasury flash crash proves, is exacerbated by asset purchases not ameliorated.

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Posted at 12:48 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

This is Gold positive long term.

The "War On Cash" Migrates To Switzerland
Submitted by Tyler Durden on 04/26/2015 06:15 -0400

Submitted by Pater Tenebrarum via Acting-Man blog,

Banks Increasingly Refuse Cash Withdrawals – Switzerland Joins the Fun

The war on cash is proliferating globally. It appears that the private members of the world’s banking cartels are increasingly joining the fun, even if it means trampling on the rights of their customers.

Yesterday we came across an article at Zerohedge, in which Dr. Salerno of the Mises Institute notes that JP Morgan Chase has apparently joined the “war on cash”, by “restricting the use of cash in selected markets, restricting borrowers from making cash payments on credit cards, mortgages, equity lines and auto loans, as well as prohibiting storage of cash in safe deposit boxes”.

This reminded us immediately that we have just come across another small article in the local European press (courtesy of Dan Popescu), in which a Swiss pension fund manager discusses his plight with the SNB’s bizarre negative interest rate policy. In Switzerland this policy has long ago led to negative deposit rates at the commercial banks as well. The difference to other jurisdictions is however that negative interest rates have become so pronounced, that it is by now worth it to simply withdraw one’s cash and put it into an insured vault.

Having realized this, said pension fund manager, after calculating that he would save at least 25,000 CHF per year on every CHF 10 m. deposit by putting the cash into a vault, told his bank that he was about to make a rather big withdrawal very soon. After all, as a pension fund manager he has a fiduciary duty to his clients, and if he can save money based on a technicality, he has to do it.

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Jim Sinclair’s Commentary

Thinking about Baltimore and Ferguson? This is coming to your local neighborhood soon assuming you do not live in Cold Foot or Wiseman, Alaska.

Rising Police Aggression A Telling Indicator Of Our Societal Decline
A historically common marker of failing civilizations
by Chris Martenson
Friday, April 24, 2015, 12:22 PM

My first Uber lift was in South Carolina.  My driver was from Sudan originally, but had emigrated to the US 20 years ago.  Being the curious sort, I asked him about his life in Sudan and why he moved.  He said that he left when his country had crumbled too far, past the point where a reasonable person could have a reasonable expectation of personal safety, when all institutions had become corrupted making business increasingly difficult.  So he left. 

Detecting a hitch in his delivery when he spoke of coming to the US, I asked him how he felt about the US now, 20 years later.  "To be honest," he said, "the same things I saw in Sudan that led me to leave are happening here now. That saddens me greatly, because where else is there to go?"

It’s time to face some uncomfortable ideas about the state of civilization in the United States. This country is no longer the beacon of freedom illuminating a better way for the world. Why not? Because it has ceased to be civilized.

The recent spate of police brutality videos and the complete lack of a useful or even sane response by the police unions is shaping my writing here. But it goes well beyond those incidents and extends into all corners of the lives of US citizens now, as police abuse is only one symptom of a much deeper problem.

What do we mean by "civilized?"  Well, take a look at its official definition and see if you note any descriptors that are lacking in present day US culture:

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Jim Sinclair’s Commentary

Think what it will be like if the economic system is finally rendered inoperative by the bankster’s greed.

Baltimore Riots Looting Protesters Freddy Gray – Protest Erupts In Chaos A Police Cars [RAW FOOTAGE]
Published on Apr 25, 2015

 

Jim Sinclair’s Commentary

Some economic recovery.

Bankruptcies Suddenly Soar Across Corporate America, Worst First Quarter Since 2009
By Wolf Richter | 04/17/15 – 08:57 AM EDT

NEW YORK (TheStreet) — "Come down to Houston," William Snyder, leader of the Deloitte Corporate Restructuring Group, told Reuters. "You’ll see there is just a stream of consultants and bankruptcy attorneys running around this town."

But it’s not just in Houston or in the oil patch. It’s in retail, healthcare, mining, finance. Bankruptcies are suddenly booming, after years of drought. 

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Posted at 10:40 AM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Michael makes some very important observations in his interview with Eric King. He feels that the banksters are moving to get rid of currencies and move towards digital currency and force the citizens around the world to spend their dollars in order to make their hopes and expectations that they can drive inflation up. This is a very dangerous direction for the banksters to take and digital currency will bring about total government control if the citizens allow this to happen. This would mean that gold and silver would become the only other alternative to fiat currency.

CIGA Larry M.

Posted at 10:13 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares with us. 

- Both Nominal and Real First-Quarter 2015 GDP Face Contraction, But Headline Downturn May Await the First Revision
- Consensus Forecasts Never Catch Economic Downturns, Yet the Consensus Outlook Is Weighted into the Initial GDP Estimate
- Real Durable Goods Orders Confirmed Back-to-Back Quarterly Contractions; Signaling a Second-Quarter GDP Decline and Formal Recession
- Household Income Declined Sharply in March
- Existing-Home Sales Fell at Annualized 7.2% (-7.2%) Pace in First-Quarter 2015
- Unstable Plunge in New-Home Sales Data Amidst Continued and Protracted Stagnation

“No. 714: March Durable Goods Orders, Median Household Income, New- and Existing-HomeSales ”
http://www.shadowstats.com

 

WTF Chart Of The Day – Chinese New Share Accounts Edition!!!!
Tyler Durden on 04/23/2015 23:20 -0400

We’ve all seen Chinese stocks explode in the last year; we’ve all seen margin lending soar to fund this exuberance; we’ve all read the dominant buyer in this trading frenzy is high-school-educated housewives; and we’ve all seen the analogs to the 2000 dotcom bubble. But, we guarentee you have never – ever – seen anything like this…

The number of new A-Share accounts opened just last week was a mind-boggling 3.25 million!!! That is double the number opened in the peak euphoria stage of the 2007 bubble…

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This will not end well…

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and end it will – one way or another, tonight’s rumor about a possible transaction tax (later denied by the CSRC) seems to have spooked more than a few…

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An Austrian Province Just Requested A State Bailout
Tyler Durden on 04/24/2015 15:15 -0400

One month ago we wrote about the ripple effects of the “mini-Greece going off in the heartland of Europe”, referring of course to the Viennese black swan, the bailed-in implosion of the Austrian Heta bad bank which nobody had anticipated because the numbers were so thoroughly cooked, nobody had even the faintest clue just how bad the truth was. We said that “while the acute pain came and went for Heta bondholders who have seen a nearly 50% loss in just a few short months, the bigger and far more diffuse pain is only just starting…. The first casualty: the beautifully picturesque southern Austrian province of Carinthia.”

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Jim Sinclair’s Commentary

More neutral than otherwise. This shows that holding gold can be very helpful when the chips are down financially.

Venezuela carries out $1 bln gold swap with Citibank –media
CARACAS, APRIL 24

(Reuters) – Venezuela’s central bank has converted part of its gold reserves into at least $1 billion in cash through a swap with Citibank, local media reported on Friday.

The deal will make more foreign currency available to President Nicolas Maduro’s socialist government as the OPEC nation struggles with soaring consumer prices, chronic shortages and a shrinking economy worsened by low oil prices.

Daily newspaper El Nacional said the deal was for $1 billion and was struck with Citibank, which is owned by Citigroup Co .

Former central bank director Jose Guerra and economist Asdrubal Oliveros of Caracas-based consultancy Ecoanalitica said in separate interviews that the operation had been carried out.

The central bank did not immediately respond to a request for comments. A Citibank official said the company had no comment.

A source at the central bank told Reuters last month it would provide 1.4 million troy ounces of gold in exchange for cash. Venezuela would have to pay interest on the funds, but the bank would most likely be able to maintain the gold as part of its foreign currency reserves.

Most of Venezuela’s foreign reserves are held in gold after late socialist leader Hugo Chavez began moving central bank assets away from the dollar in the wake of the 2007-2009 global financial crisis. (Reporting by Corina Pons and Brian Ellsworth; Writing by Alexandra Ulmer; Editing by Paul Simao)

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Jim Sinclair’s Commentary

Business is booming. Daddy Warbucks does the dance of joy!

The $18bn arms race helping to fuel Middle East conflict
Security experts express fears for region’s stability amid record weapons sales from west and Russia’s missile deal with Iran
Peter Beaumont
Thursday 23 April 2015 05.23 EDT Last modified on Thursday 23 April 2015 19.00 EDT

The Middle East is plunging deeper into an arms race, with an estimated $18bn expected to be spent on weapons this year, a development that experts warn is fuelling serious tension and conflict in the region.

Given the unprecedented levels of weapons sales by the west (including the US, Canada and the UK) to the mainly Sunni Gulf states, Vladimir Putin’s decision last week to allow the controversial delivery of S-300 anti-aircraft missiles to Iran – voluntarily blocked by Russia since 2010 – seems likely to further accelerate the proliferation.

That will see agreed arms sales to the top five purchasers in the region – Saudi Arabia, the United Arab Emirates, Algeria, Egypt and Iraq – surge this year to more than $18bn, up from $12bn last year. Among the systems being purchased are jet fighters, missiles, armoured vehicles, drones and helicopters.

The Russian declaration came only two days before Iraq’s prime minister, Haider al-Abadi, disclosed he was seeking arms worth billions of dollars from Washington – with payment deferred – for the battle against Islamic State (Isis).

Last week France’s foreign minister, Laurent Fabius, disclosed progress in talks to sell Rafale fighter jets to the UAE, one of the Middle East’s biggest and most aggressive arms buyers.

With conflicts raging in Syria, Iraq, Libya and Yemen, and with Egypt also battling Islamist extremists in the Sinai, the signs that Russia is preparing to increase its own arms sales – and to the Gulf states’ biggest rival, Iran – are raising fears that tensions will be stoked further still.

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Jim Sinclair’s Commentary

Peace in our time?

Israel, Gaza Exchange Rocket Fire for First Time Since Year Started
05:16 24.04.2015(updated 06:14 24.04.2015)

MOSCOW (Sputnik) — Israel Defense Forces shot retaliatory rocket at northern Gaza after a shell was reportedly fired from there at Israeli Sderot area late on Thursday, for the first time since the beginning of the year, the local media said.

The previous rocket was shot at Israel from Gaza territory on December 19, 2014, breaching the August Israeli-Palestinian truce for the second time.

An open-ended ceasefire was reached by the sides in August 2014 after a 50-day conflict. In July 2014, Israel launched Operation Protective Edge against the Hamas forces that resulted in deaths of over 2,000 Palestinians and 71 Israelis, according to the UN estimates.

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All Not Quiet on the Eastern Front—-Even Polish General Rebukes Ukrainian Ultra-Nationalism
by Mike Mish Shedlock • April 23, 2015

Judging from Western media, one might think nothing much is happening in Ukraine. Facts are wildly different as we will discuss momentarily.

Rush to Judgment

As a prelude to current events, please recall the hype when Russian opposition leader Boris Nemtsov was gunned down in March. Western media rushed to judgment. Heck, even friends who should know better rushed to judgment.

Every Western news agency, even some I would have expected better of, was quick to point the finger at Putin.

I commented on Boris Nemtsov on March 6 in Rush to Judgment and Extremely Inaccurate Reporting.

With that backdrop, let’s turn our attention to some recent events.

Death Squads Kill Four News Reporters in Ukraine

On April 17, Death Squads Killed Four News Reporters in Ukraine in 24 Hours.

Over the last two days in Ukraine, there have been four prominent killings.  On Wednesday, it was former member of Parliament from the Regions Party, leader of the All-Ukrainian Officers’ Union, and one of the founders of the AntiMaidan, Oleg Kalashnikov.  On Thursday, it was journalist Sergei Sukhobok, one of the founders of the ProUA and Obkom websites.  That same day, former editor of the major newspaper Segodnia, well-known journalist Oles’ Buzina, was shot dead in his own backyard; and the body of editor-in-chief of the Netishinskii Herald, Olga Moroz, was found dead in her apartment, bearing signs of a violent death.

Three journalists in one day. Four political figures in 24 hours.  Where is the human rights crowd? Where is the international community?  Where are the declarations of Merkel, Obama, Cameron, etc.? Where is the wave of indignation from the Western press? Where?

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Jim Sinclair’s Commentary

Good thinking or poor navigation?

Iranian naval convoy bound for Yemen turns back toward home
DEBKAfile Special Report April 23, 2015, 8:58 PM (IDT)

Senior US defense officials reported Thursday, April 23, that the Iranian convoy suspected of carrying weapons for Houth rebels in Yemen appeared to have turned around and was heading north toward Iran. Other Pentagon sources were more cautious: “This isn’t over yet,” they said, in reference to a potential showdown shaping up from Monday, when the USS Roosevelt carrier and USS Normandy missile cruiser reached the Arabian Sea. The Iranian convoy was tracked by the US, Saudi, Egyptian and UAE fleets, any one of which may have intercepted an Iranian vessels trying to unload arms for the rebels.

debkafile reported earlier that, just hours after halting military operations in Yemen, Saudi Arabia Wednesday, April 22 resumed its air strikes, bombing pro-Iranian Houthi rebel positions southwest of Taiz, after they seized a brigade base from forces loyal to fugitive President Abdu-Rabbu Mansour Hadi. debkafile’s military sources report that the Saudi-led coalition went back on a promise published Tuesday to shift its focus from military action to peace talks after Houthi rebels opted out of the ceasefire the Obama administration was trying to broker between Riyadh and Tehran. Tehran further refrained from ordering its warships to turn around and told them to stay on course for the Gulf of Aden opposite Yemen.
debkafile reported earlier Wednesday:

Wide overnight predictions of a Yemen ceasefire coming out of US mediation between Iran and Saudi Arabia were unfulfilled by Wednesday, April 22. All that happened was Saudi Arabia’s termination of its air strikes against the Iran-backed Houthi rebels – but not its sea and air blockade of the country. The rebels made it clear that for them, the war goes on. From Washington, US President Barack Obama warned Tehran against delivering weapons to Yemen that could be used to threaten shipping traffic in the region. Speaking in a televised interview on MSNBC’s “Hardball,” the president said: “What we’ve said to them is that ‘if there are weapons delivered to factions within Yemen that could threaten navigation, that’s a problem.’”

He was referring to the Iranian buildup of nine vessels, some carrying weapons, and warning that US warships were deploying to defend international navigation in the Gulf of Aden and the strategic Strait of Bab el-Mandeb off the shores of Yemen.
debkafile reported earlier::

Iran’s Deputy Foreign Minister Hossein Amir Abdolllahian said Tuesday night, April 21, that Tehran is optimistic that ‘in the coming hours we shall see a halt to military attacks in Yemen.”

He did not say whether the Saudi Arabia had accepted a ceasefire after three weeks of air strikes, or its targets, the Houthi rebels and their Yemeni army allies – or both. Their acceptance would terminate the Yemen civil war.

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Posted at 10:08 AM (CST) by & filed under Jim's Mailbox.

Jim,

The next chapter (7,11,13,etc)!

And the bailouts or bankruptcies begin:

Sovereign debt folding (Greece)
Provincial debt folding (Carinthia)
Territorial debt folding (Puerto Rico)
Municipal debt unraveling in the U.S.
Corporate debt in China (Baoding Tianwei Baobian Electric LTD third listed Chinese firm to proceed … without a bailout)
Corporate debt in America (Fracking loans) folding

Yet to come:

US government debt in jeopardy if rates rise

Student Loan defaults soaring
Auto Loans in jeopardy (most are really sub-sub-prime)
Mortgage market still struggling with foreclosures
Derivatives treading a fine line if interest rates rise

Nasty out there!

Come in from the COLD and into the GOLD.

CIGA Wolfgang R Newsmeister

An Austrian Province Just Requested A State Bailout

Finance Minister Hans Joerg Schelling has said repeatedly that the Austrian government isn’t liable to cover Carinthia’s guarantees.” Herr Schelling’s warning is about to be tested. Yesterday, Carinthia officially askedVienna for financial support. The spokeswoman saidCarinthia would run out of money in June without help, confirming local media reports. No Austrian province has ever gone bankrupt and there is no legislation on how to handle such an event.

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Jim,

An economics professor of mine decades ago said “if it wasn’t for Boeing, US GDP, corporate earnings, and our economy would be in the toilet.”

Combine that with the capricious nature of Boeing’s orders, and we find that we are walking a fine line in our judgements about prosperity. Global recessionary winds will temper future orders quite a bit.

Thank God for war! Just saying.

CIGA Wolfgang R Newsmeister

Capital Goods Orders in U.S. Unexpectedly Fall for Seventh Month
8:30 AM EDT 
April 24, 2015

Orders for business equipment unexpectedly fell in March for a seventh consecutive month, a sign business investment will remain sluggish.

Bookings for non-military capital goods excluding aircraft, a proxy for future corporate spending on new equipment, dropped 0.5 percent, data from the Commerce Department showed Friday in Washington. Demand for all durable goods — items meant to last at least three years — rose 4 percent on aircraft and autos.

Non-defense capital goods orders excluding planes were projected to rise 0.3 percent, according to the Bloomberg survey median. The February reading was revised to show a 2.2 percent slump, the biggest drop since July 2013. The decrease was twice as big as the 1.1 percent decline previously reported.

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Jim,

Perhaps it’s my propensity for leaning toward cynicism, but I feel there is more to this than meets the eye.

Personally, my belief is that the underlying motive for banning cash is to prepare the public for a radical change in our currency.

Perhaps not tomorrow, but soon enough.

One morning, we will wake up and find a new currency in circulation, with the old one being relegated to an historical coffin. It would be more efficient to simply convert all digital currency to a new denomination than to collect and exchange the old… for the new.

Can anyone say debt free “Reichmarks”?

CIGA Wolfgang R Newsmeister

Largest Bank In America Joins War On Cash
Submitted by Tyler Durden on 04/23/2015 – 23:44

The war on cash is escalating. Just a week ago, the infamous Willem Buiter, along with Ken Rogoff, voiced their support for a restriction (or ban altogether) on the use of cash (something that was already been implemented in Louisiana in 2011 for used goods). Today, as Mises’ Jo Salerno reports, the war has acquired a powerful new ally in Chase, the largest bank in the U.S., which has enacted a policy restricting the use of cash in selected markets; bans cash payments for credit cards, mortgages, and auto loans; and disallows the storage of “any cash or coins” in safe deposit boxes.

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Posted at 2:14 PM (CST) by & filed under In The News.

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Ukraine Update: Not Quiet on the Eastern Front; Sanitized US News; Wakeup Call From Poland
(Excerpts)

Over the last two days in Ukraine, there have been four prominent killings. On Wednesday, it was former member of Parliament from the Regions Party, leader of the All-Ukrainian Officers’ Union, and one of the founders of the AntiMaidan, Oleg Kalashnikov. On Thursday, it was journalist Sergei Sukhobok, one of the founders of the ProUA and Obkom websites. That same day, former editor of the major newspaper Segodnia, well-known journalist Oles’ Buzina, was shot dead in his own backyard; and the body of editor-in-chief of the Netishinskii Herald, Olga Moroz, was found dead in her apartment, bearing signs of a violent death.

Three journalists in one day. Four political figures in 24 hours. Where is the human rights crowd? Where is the international community? Where are the declarations of Merkel, Obama, Cameron, etc.? Where is the wave of indignation from the Western press? Where?

More…

Posted at 1:16 PM (CST) by & filed under Jim's Mailbox.

Jim,

News Flash!

Attention Mr. and Mrs. America and all the ships at sea:

There will no longer be ANY bad news in America! Heretofore, all news will be deemed good.

CIGA Wolfgang R Newsmeister

New Home Sales Tumble By Most In Almost 2 Years As Northeast Crashes
Submitted by Tyler Durden on 04/23/2015 – 10:07

After existing home sales sent stocks vertical on great news,

so new home sales plunge has sent stocks vertical on bad news.

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