Posted at 10:50 PM (CST) by & filed under In The News.

To anger a conservative, lie to him. To anger a liberal, tell him the truth…
- Teddy Roosevelt


Dear CIGAs,

It would be much nicer to go to jail say in Scandinavia or Canada. Accommodation and food are better.  Exercise and entrainment is included. Cable TV is piped into your accommodations.

A small verbal attack using a little foul language against Canadian hockey, star players or beer said just before you are to be released should take care of your prompt recidivism. The alternative here is to live on college loans for under or graduated degrees at a school of your choice near vacation areas here in the USA. Otherwise, standard USA incarceration means you get to join any of four exclusive clubs, the Crips, the Bloods, The Arian Nation or convert to Islam.

Lets also be fair. Hawaii pays $68,000 per year to welfare recipients so if you can afford the trip and grow Rastafarian hair there is an alternative idea not behind bars. However, you must take the Obama oath that you witnessed his birth at the hospital on the certificate that was not constructed until four years later.

Also please consider Australia because they have the whole thing upside down. The guards are in the cells and inmate simply wander around playing their didgeridoos. The cooks are all aboriginal so it will make a man out of you even if you are a lady.

Next week we will consider the Russian Gulags very briefly. Here is a hint: No.

A Shocking Look At What The Elderly Are Now Doing Just To Survive
April 12, 2016

On the heels of the IMF downgrading their global growth forecast, below is a shocking look at what the elderly are already doing just to survive.

Here is a portion of today’s note from Art Cashin:  Grandpa Goes To Jail – Willingly – The incredibly sharp-eyed Grant Williams found a disturbing new trend in Japan, which was described in an article in the FT. Here’s how the article began:

Japan’s prison system is being driven to budgetary crisis by demographics, a welfare shortfall and a new, pernicious breed of villain: the recidivist retiree. And the silver-haired crooks, say academics, are desperate to be behind bars.

Crime figures show that about 35 percent of shoplifting offences are committed by people over 60. Within that age bracket, 40 per cent of repeat offenders have committed the same crime more than six times.

There is good reason, concludes a report, to suspect that the shoplifting crime wave in particular represents an attempt by those convicted to end up in prison — an institution that offers free food, accommodation and healthcare.

The mathematics of recidivism are gloomily compelling for the would-be convict. Even with a frugal diet and dirt-cheap accommodation, a single Japanese retiree with minimal savings has living costs more than 25 per cent higher than the meagre basic state pension of Y780,000 ($6,900) a year, according to a study on the economics of elderly crime by Michael Newman of Tokyo-based research house Custom Products Research.

More…


Jim Sinclair’s Commentary

This election, if there is one, is going to be the Greatest Show on Earth.

Raucous opening to Democratic convention as Sanders backers revolt
By John Whitesides and Luciana Lopez | PHILADELPHIA

(Reuters) – Supporters of Bernie Sanders disrupted the first day of the Democratic convention on Monday, repeatedly chanting and booing mentions of Hillary Clinton’s name as the party’s hopes for a show of unity dissolved into frequent chaos.

Speakers in the convention’s first hour struggled to carry out business as angry Sanders supporters roared their disapproval, drawing a deafening response from Clinton delegates.

“We’re all Democrats and we need to act like it,” U.S. Representative Marcia Fudge of Ohio, the convention’s chairwoman, shouted over the uproar.

Earlier in the day, Sanders drew jeers from his supporters when he urged his delegates to back the White House bid of his formal rival, Clinton, and focus on defeating Republican Donald Trump in the Nov. 8 presidential election.

Sanders’ followers shouted: “We want Bernie” in a show of anger at both Clinton’s victory in the race for the Democratic presidential nomination and emails leaked on Friday suggesting the party leadership had tried to sabotage Sanders’ insurgent campaign.

For months, Sanders, 74, a U.S. senator from Vermont, mounted an unexpectedly tough challenge to Clinton, 68, a former secretary of state, who this week will become the first woman nominated for president by a major U.S. political party.

The scenes of booing in Philadelphia were a setback to Democratic officials’ attempts to present the gathering as a smoothly run show of party unity in contrast to the volatile campaign of Republican nominee Trump.

Sanders tried to head off the disruptions, sending an email to delegates as the convention opened urging them to refrain from interrupting the proceedings.

“Our credibility as a movement will be damaged by booing, turning of backs, walking out or other similar displays. That’s what the corporate media wants. That’s what Donald Trump wants,” Sanders said in the email.

Trump gloated at the Democrats’ opening day disorder.

More…


Jim Sinclair’s Commentary

A tad conservative on his numbers.

This representation by Egon vonGreyerz explains why gold will eventually reach its zenith at 12,000/oz gold value.

clip_image001

clip_image002

clip_image003

Posted at 10:36 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Please take the time to read this from our friend Don McAlvany. This is a subscription article and is being linked with his permission. 

2016: THE YEAR OF UPHEAVAL, CHAOS, AND POLITICAL PUSHBACK

INTRODUCTION

Some people are comparing the Brexit vote and even Donald Trump to the Magna Carta and the Declaration of Independence. There are clear similarities.

The Brexit vote was about divorcing Britain from the overbearing socialist bureaucrats in Brussels. Trump’s presidential campaign is about destroying the overbearing globalist elitists in Washington – regardless of their party affiliation. The Magna Carta and the Declaration of Independence were about freedom from overbearing, despotic kings. The latter led to war. Brexit will not likely do the same, but it has clearly brought out the despot in many Brussels bureaucrats and European politicians.

Much is being made about the powerful “Leave” vote in Great Britain. While the vote is “nonbinding,” going against it will lead Britain to the brink of serious internal strife. Moving in line with the vote will cause even greater conflict across the European Union. Here’s why: Germany’s vision of a European super-state is very much alive. Without Britain to hold it accountable, Germany now takes primary possession of power in the EU. What Hitler couldn’t attain by war, Germany may have now attained peacefully. As other countries look to follow Britain’s leadership, Germany will move quickly to make it all but impossible to leave the Union. Watch German Chancellor Merkel closely in this respect.

Statists and the elite have always moved to increase their power and control. They love to control the little guy. They think of themselves as gods and the “little people” as their subjects, though they would never say it that way and would object to anyone else’s doing so. Statists love to bring everyone together in one union so they are easier to control and so the state’s power is magnified. (That is what Bush’s North American Union was all about.) Think Babel, think Babylon, think Rome, think the Soviet Union and the Third Reich. The promise that we can be as gods is as alluring to people now as it was to Eve. Americans have fought against this drive for centralization and power since the nation’s inception, sometimes successfully, often not. Now – again – it’s the Europeans’ turn. The subjects are trying to throw off their gods, and the gods will not likely take it standing still. It’s not in their nature. The EU was supposed to be

More…

Posted at 6:28 PM (CST) by & filed under In The News.

clip_image001

 

Jim Sinclair’s Commentary

An HSBC executive has been arrested and is being charged by our government

Posted at 11:45 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

A sign of things to come.

“I always liked the famous scene in the movie Jaws where the film’s hero, police Chief Brody, finally gets a close-up look at the size of his killer shark nemesis.

‘We’re gonna need a bigger boat,’ he says, incredulous at the size of the monster fish.”

These days, we have a monetary nemesis called negative rates. It’s already a reality in Japan and the European Union.

Not only are people hoarding cash and gold in vaults, but banks and insurance companies alike are doing the same!

Anyone failing to take notice, deserves the consequences.

Negative Rates: We’re Gonna Need a Bigger Vault
July 19, 2016

I always liked the famous scene in the movie Jaws where the film’s hero, police Chief Brody, finally gets a close-up look at the size of his killer shark nemesis.

“We’re gonna need a bigger boat,” he says, incredulous at the size of the monster fish.

These days, we have a monetary nemesis called negative rates. It’s already a reality in Japan and the European Union.

But large banks, incredulous at being forced to store their digital cash at the European Central Bank (ECB) — and paying for the privilege — have a strategy to deal with this ongoing financial horror show, summed up as…

“We’re gonna need a bigger vault.”

Back in March, I noted how Germany’s Munich Re, one of the largest financial institutions in the world, threatened to load up on lots and lots of physical cash (and some gold) and stuff it into the vaults it controls.

Last month, another German banking giant, Commerzbank, let it be known that it too is likely to do the same if the dummkopfsat the ECB insist on maintaining negative rates.

And it’s not just those dour Deutschland bankers. Their counterparts in Japan are brewing their own revolt against negative rates.

More…

Posted at 11:23 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares his latest with us.

- Housing Starts Continued to Hold in Smoothed, Low-Level Stagnation,
Never Having Recovered Pre-Recession Highs
- Second-Quarter Starts Growth Slowed Sharply Amidst Downside Revisions
- Downside Benchmark Revisions to Key Series Underlying the GDP Indicate Pending Downside Benchmark Revisions to the GDP
- First- and Fourth-Quarter 2015, and First-Quarter 2016 GDP Are Most Vulnerable to Negative Revisions

“No. 821: June Housing Starts, Preview of GDP Revisions ”
PDF: http://www.shadowstats.com


Bill Holter’s Commentary

“Senior DOJ leadership, including Attorney General Holder, overruled an internal recommendation by DOJ’s Asset Forfeiture and Money Laundering Section to prosecute HSBC because of DOJ leadership’s concern that prosecuting the bank would have serious adverse consequences on the financial system”…

…as in they would have had to close the system down? And how many years ago was this?

TOO BIG TO JAIL:INSIDE THE OBAMA JUSTICE DEPARTMENT’S DECISION NOT TO HOLD WALL STREET ACCOUNTABLE

Executive Summary

In March 2013, the Committee on Financial Services (Committee) initiated a review of the U.S. Department of Justice’s (DOJ’s) decision not to prosecute HSBC Holdings Plc. and HSBC Bank USA N.A. (together with its affiliates, HSBC) or any of its executives or employees for serious violations of U.S. anti-money laundering (AML) and sanctions laws and related offenses. The Committee’s efforts to obtain relevant documents from DOJ and the U.S. Department of the Treasury (Treasury) were met with non-compliance, necessitating the issuance of subpoenas to both agencies. Approximately three years after its initial inquiries, the Committee finally obtained copies of internal Treasury records showing that DOJ has not been forthright with Congress or the American people concerning its decision to decline to prosecute HSBC. Specifically, these documents show that:

· Senior DOJ leadership, including Attorney General Holder, overruled an internal recommendation by DOJ’s Asset Forfeiture and Money Laundering Section to prosecute HSBC because of DOJ leadership’s concern that prosecuting the bank would have serious adverse consequences on the financial system.

· Notwithstanding Attorney General Holder’s personal demand that HSBC agree to DOJ’s “take-it-or-leave-it” deferred prosecution agreement deal by November 14, 2012, HSBC appears to have successfully negotiated with DOJ for significant alterations to the DPA’s terms in the weeks following the Attorney General’s deadline.

· DOJ and federal financial regulators were rushing at what one Treasury official described as “alarming speed” to complete their investigations and enforcement actions involving HSBC in order to beat the New York Department of Financial Services.

· In its haste to complete its enforcement action against HSBC, DOJ transmitted settlement numbers to HSBC before consulting with Treasury’s Office of Foreign Asset Control (OFAC) to ensure that the settlement amount accurately reflected the full degree of HSBC’s sanctions violations.

· The involvement of the United Kingdom’s Financial Services Authority in the U.S. government’s investigations and enforcement actions relating to HSBC, a British-domiciled institution, appears to have hampered the U.S. government’s investigations and influenced DOJ’s decision not to prosecute HSBC.

· Attorney General Holder misled Congress concerning DOJ’s reasons for not bringing a criminal prosecution against HSBC.

· DOJ to date has failed to produce any records pertaining to its prosecutorial decision making with respect to HSBC or any large financial institution, notwithstanding the Committee’s multiple requests for this information and a congressional subpoena requiring Attorney General Lynch to timely produce these records to the Committee.

More…


Jim Sinclair’s Commentary

This is the reader who thinks there is no reason to prepare except in the financial sense.

clip_image002

Jim Sinclair’s Commentary

Remember the absolute BS you heard about Obama Care?

California Obamacare rates to rise 13% in 2017, more than 3 times the increase of last 2 years
Melody Petersen

Premiums for Californians’ Obamacare health coverage will rise by an average of 13.2% next year — more than three times the increase of the last two years and a jump that is bound to raise debate in an election year.

The big hikes come after two years in which California officials had bragged that the program had helped insure hundreds of thousands people in the state while keeping costs moderately in check.

Premiums in the insurance program called Covered California rose just 4% in 2016, after rising 4.2% in 2015 – the first year that exchange officials negotiated with insurers.

On Tuesday, officials blamed next year’s premium hikes in the program that insures 1.4 million Californians on rising costs of medical care, including specialty drugs, and the end of a mechanism that held down rates for the first three years of Obamacare.

For consumers, the impact will depend on whether they get taxpayer-supported subsidies for their premiums and whether they are willing to switch to less expensive plans that may come with higher co-pays and deductibles.

Obamacare has significantly reduced the number of uninsured Californians. Since the state’s health insurance exchange began offering coverage in 2014, the share of Californians without health insurance has fallen from 17% at the end of 2013 to 8.1% at the end of last year, according to officials.

More…

Posted at 11:15 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

I guess we know what to expect come November.

“While there are certain benefits, it sounds better to have a strong dollar than in actuality it is.” Says Trump.

The $ will not “Trump” our President. But gold will “Trump” everything else.

CIGA Wolfgang Rech

Why the U.S. Strong-Dollar Policy Is Relic of Long-Gone Era: Q&A
Saleha Mohsin SalehaMohsin
July 19, 2016 — 2:13 PM EDT

-Greenback’s rise has worked against Fed’s policy efforts

-Trump has said strong dollar sounds better than it really is

The so-called strong-dollar policy has been a mantra of U.S. Treasury departments for more than two decades. Now, with Donald Trump and Hillary Clinton being anointed as the respective Republican and Democratic presidential nominees, America’s currency doctrine is due for a rethink.

The greenback has surged around 20 percent since mid-2014, and speculation has been rife this year that global policy makers might reach a coordinated currency pact to weaken the dollar. Group of 20 finance ministers and central bankers gather in China later this week amid a storm of conditions that have kept the dollar strong, including the Brexit vote and weak global growth.

1. What is the policy?

Ever since then-Treasury Secretary Robert Rubin in 1995 began promoting the dogma that a strong dollar is in the U.S.’s interest, every administration has followed suit. Now the policy — left over from a world before the G-20 agreed to refrain from currency manipulation — has become inescapable, says Eswar Prasad, whose 2014 book “The Dollar Trap” makes the case that the greenback will remain the cornerstone of the global economy.

More…

Posted at 6:14 PM (CST) by & filed under In The News.

Dear CIGAs,

Helicopter Money is the end of the financial world as we know it. Is Mad Max-ine running the Federal Reserve?

There are problems much larger than anyone has yet mentioned. We live in a stretched beyond tight, credit world. When credit anywhere falls significantly, it puts pressure on the entire system.

Today the entire system’s credit number is in fact t higher than the free cash number. That means that should this happen, there simply is not enough dollars that can in actuality be supplied to stem the run on everything from your local bank to virtual money and toxic derivatives. Cash is being horded by the super wealthy. this is the foundation of the recent international into cash movement. That means a credit crisis rescue at that point is simply impossible.

In order to try and evert such a calamity by camouflage, the new wrinkle which is not in the least new at all, is being called Helicopter Money

All that helicopter money is debt monetization eliminating the middleman, the Treasury bond dealers. You might understand it as QE on steroids without a filter here and everywhere giving the helicopter better aim.

Without any doubt this is coming down the track like a speeding locomotive totally out of control.

This was announced on the down low, in the down under, Australia, by a Federal Reserve board member. This has been missed and misunderstood.

Why Italy’s banking crisis will shake the eurozone to its core
16 JULY 2016 • 4:41PM

They call them le sofferenze – the suffering. The imagery is striking, the thousands of sofferenze across Italy, unwanted and ignored, a problem unsolved.

But despite the emotional name, these are not people. They are loans. Bad debts, draining banks of profits and undermining economic growth.

The name is less clinical than the English term “non-performing loans”, a reflection of the Italian authorities’ emotional rather than business-like approach to the problem.

None the less, the loans are indeed causing real suffering. The €360bn (£300bn) of sofferenze from Italian banks show borrowers are weighed down with debts they cannot afford, while the banks are struggling to offer new credit to the households and firms that need them.

When other countries such as the UK, Ireland and Spain ran into trouble, they bit the bullet and cleaned up their banks quickly. Italy did not.

In a way, Italy’s authorities had good intentions. When loans turn bad and banks lose money, someone has to pay. It should be the banks’ investors, the shareholders and bondholders who take the risk of investing in return for the chance of profits. Unfortunately in Italy, households are keen investors in bank bonds, and would be badly burnt if they had to face up to those losses.

So nothing was done. The bondholders have so far kept sight of their savings, and the banks have been allowed to ignore their bad loans. It saved the country some short-term pain, but the financial problems never went away.

Now they have spread to the wider economy, and are morphing into a political crisis with implications across the EU. It could bring down Italy’s government.

If no compromise is reached between Rome, which wants to protect bondholders, and the EU, which wants to enforce the rules, it could even bring down the eurozone.

“This could be a bigger risk than Brexit,” says a lawyer who is close to the situation.

“The Greeks are desperate to be anchored into Europe, they are willing to suffer and suffer and suffer to stay in – I am not sure that Italy is willing to suffer.” The stakes are that high, and nobody knows whether the EU can muddle through another crisis, or if shock waves from Italy will split the union. Long nights and fraught nerves lie ahead.

This is just the latest phase of the eurozone’s seemingly never-ending crisis, and the International Monetary Fund’s latest assessment of the currency area’s third-largest economy shows why Italy is the latest focal point.

The country faces a slow crawl back to economic health, the IMF warned last week. Productivity growth remains weak, debt is still climbing and the economy can’t prosper while its banking sector is sick.

Under current projections, the economy will not get back to its pre-crisis size until 2025. In other words, Italy faces not one, but two lost decades.

As a result, its banks are sitting on a vast stockpile of bad loans, and the situation will only worsen if the status quo continues.

Few countries have bad debts on this scale – more than 18pc of Italian banks’ loans are non-performing, and the lenders have set aside funds to cope with only half of those.

By contrast, fewer than 5pc of French banks’ loans have run into trouble, and British banks’ bad loans amount to below 1.5pc of their books.

In almost any other economy, these astronomical levels of bad loans would be dealt with quickly.

As Rome has delayed taking action to solve the problem, not only has the scale of dodgy debts grown, but so has the barrier posed by tough new rules and a more hostile political environment.

Such was the expense of taxpayer bail-outs across Europe – and the public anger as voters bore the cost even as bondholders typically escaped unscathed – that European leaders agreed to make sure taxpayers were never on the hook again.

This set-up was expected to restore sanity to bond markets since risk was reintroduced to the equation, and to reduce political problems by removing public money from banks.

Yet in Italy, the new arrangements also risk intense public anger and financial disaster, as household finances are unusually closely intertwined with the banks.

Estimates of the cost of recapitalising the banks typically stand at around €40bn – a large but not insurmountable cost, but one that could have huge repercussions if retail customers have to chip in.

The first impact would be on the banks. They rely heavily on retail deposits and bonds to finance their lending – according to Bank of America Merrill Lynch, households own €235.6bn of bank bonds, amounting to 14.6pc of their wealth – and the banks do not want to frighten them.

“The risk of bailing in retail bondholders is that the domestic bond market, which is important for funding Italian banks, could potentially shut down,” says Roberto Henriques at JP Morgan.

“At the margin, the media coverage of any subsequent losses for retail bondholders might also undermine retail depositor confidence in the same institutions, with the potential for some deposit outflows.”

In this case, the financial crisis could worsen, rather than being resolved.

The second problem is political. The bondholders’ losses risk harming the government’s reputation at a delicate moment.

Prime Minister Matteo Renzi is already facing a close-fought referendum over a planned constitutional reform. If he loses the vote, it could mean the end of his government, and polls indicate that the eurosceptic Five Star party, headed by Beppe Grillo, could perform well in a general election, spreading further political instability through the European Union.

Italian pragmatists argue the cost of a government-backed bailout would be worth paying, to avoid financial instability. Yet the equation is not that simple.

The EU insists bondholders have to bear the cost of the recapitalisation, sparing taxpayers and forcing investors to think about the risks they are taking, to help stop future crises at banks and in governments’ finances.

Officials at the Eurogroup and European Central Bank are digging in their heels – they do not want the past five years of financial reforms undermined immediately by Italy.

Such a result would sap their own authority and open the door to similar state-backed deals in Portugal, which is also suffering from bad bank loans.

Still, even a bailout would bring political risks to Mr Renzi.

Lorenzo Codogno, former director- general of the Treasury Department at the Italian economy ministry, says there is a risk that a bail-in of retail investors could be politically toxic, even if a conversion of debt into equity, could be a “gift” for many bondholders who now have illiquid subordinated debt.

“The risk is clearly that it is not taken well by the electorate, affecting political support for the PM,” says Codogno, the current chief economist of LC Macro Advisors.

Those watching negotiations closely think Italy’s government may end up acting first.

“The EU rules say you can’t do it. But so what?” says a lawyer, who asked not to be named, in criticising the EU’s leadership. “If it is a choice between the collapse of the Italian banking system or being told off by [Eurogroup President] Jeroen Dijsselbloem, I know what I would do in Renzi’s shoes. It is easier to ask for forgiveness than to ask for permission.”

If the Italian government does indeed defy Europe’s rules, the government still has to decide precisely how to recapitalise the banks.

One option to soften the blow to investors could be to take the Greek route, forcing the bondholders to participate, but switching some of their bonds into shares. The shares are worth relatively little at the moment, but if the banks do indeed ultimately recover, the value of the equities should rise in time.

The move could also be used to placate the EU, showing the authorities that investors have at least shared the burden – “a fig leaf”, as one investment banker calls it – while really keeping those household investors sweet.

Either way, something has to be done soon. By the end of this month, the European Banking Authority will have published new figures showing the banks’ weak capital positions.

The stress tests have been ignored in the past, but it is becoming harder to brush aside international comparisons with increasingly strong banks in other countries.

This week, Bank of England Governor Mark Carney said Italy’s banks’ capital positions will only get worse if no action is taken.

“[The Italian banks] have deferred tax assets on their balance sheets. We learnt that lesson with RBS, not to count those assets,” he said.

“By 2019 they won’t be allowed to have those assets on their balance sheets thanks to the European and Basel rules, but for the moment they do. In the case of the Italian banks, it accounts for 2pc to 2.5pc or so of their underlying equity. That is an asset that will go away with time, so quality of capital is a bit of an issue.”

That is to say, even in their current poor positions, the Italian banks are artificially propped up by unreliable assets which will soon be stripped away from them.

The situation is uncomfortably painful, even unbearable for Italy. Expect a political bust-up followed by economic uncertainty and then – if Italians can stomach the other tough economic reformsnecessary to free up their labour market and swathes of industry – some form of recovery to put the country back on track to prosperity.

“There is no magic bullet,” says Codogno.

Link to article…

 

Jim Sinclair’s Commentary

Debt monetization. What the fancy terms Helicopter Money and QE really are.

Debt Monetization: A Nearsighted Government Policy?
By Brian Twomey

The public debate regarding debt and debt monetization is as old as the Republic. James Madison called debt a curse on the public, and first Treasury Secretary Alexander Hamilton called it a blessing provided that the debt wasn’t excessively large. The modern day debt monetization term emanated from the Treasury’s cost of financing World War II’s debt through increased bond issues.

Historically, the Treasury Department has determined the amount of debt and maturities issued. In this capacity, it has full control over monetary policy, defined as the supply of money and credit. The Federal Reserve was the distributor of all debt to the public and supported debt prices through sales of bonds, notes and bills. A collision occurred between the two agencies due to failing to finance the war debt in a timely manner.

The 1951 Treasury-Fed Accord settled the question of who controls the Fed’s balance sheet by reversing roles. The Fed would control monetary policy by supporting debt prices without control over any debt it holds, and would buy what the public doesn’t want, while the Treasury would focus on the amount of issuance and categorical maturities. (Learn about the tools the Fed uses to influence interest rates and general economic conditions, read Formulating Monetary Policy.)

Monetary Policy

Since 1951 monetary policy has been controlled through the Fed’s Open Market Operations with a Treasuries-only policy. This separated the Fed from fiscal policy and credit allocation, and allowed for true independence. It also freed the Fed from monetizing debt for fiscal policy purposes and prevented collusion, such as agreements to peg interest rates directly to Treasury issues. Credit policy was also separated and limited to Treasury, defined as bailing out institutions, sterilizing foreign exchange operations and transferring Fed assets to Treasury for deficit reduction. The Treasury Secretary and the comptroller of the currency were removed from the Federal Reserve Board so that policy decisions were separate from fiscal policy. Today 12 Federal Reserve Bank Governors and the Chairman of the Fed make up the Federal Open Market Committee that sets interest rate and money supply policies.

More…

 

Jim Sinclair’s Commentary

The real question is “why not?” Japan is a train wreck so how much more can the wrecked Japan do to itself? Due to Globalism it is the entire International Monetary System that would be dragged down by instant duplication. The answer is Helicopter Money can put the system in a terminal grand mal seizure for a reason even they do not know.

Why is Japan toying with helicopter money?
From Gavin Davies:

There are many ways of defining helicopter money, but the essential feature is that it involves an increase in the budget deficit which is financed by a permanent increase in the central bank’s monetary base, not by the issuance of government debt. Although this does not literally involve dropping banknotes from the sky, its economic effects are similar.

…Why is Japan even considering such extreme measures? The key here is that this policy is mainly about inflation expectations and real interest rates, not about output and unemployment. There is general agreement that the output gap in Japan is very small, at about 1-1.5 per cent of GDP, and that the labour market is operating close to full employment. So this is not a case of using government stimulus to correct a serious recession.

Instead, the Japanese problem is that inflation expectations have plummeted since the failure of Governor Haruhiko Kuroda’s attempt to ease monetary policy by introducing negative interest rates in January. With nominal interest rates now at the zero lower bound right across the yield curve, the fall in inflation expectations has left real yields above the equilibrium or natural rate of interest. This leaves Japan extremely vulnerable to any new deflationary shock, from China for example.

If helicopter money could restore inflation expectations to the 2 per cent target, the drop in real interest rates would suddenly makes the gross government debt ratio, at 240 per cent of GDP, look more sustainable. Furthermore, the government could boost aggregate demand by announcing a fiscal expansion that would promise a rise in nominal GDP, and (unlike under QE) that would not result in any increase in public debt held by the private sector.

…There is little doubt that this would “work” if pursued with sufficient determination. A government that promises to increase its direct public expenditure, while permanently monetising all of that debt, can surely generate inflation.

…In Japan, bad memories of helicopter money in the 1930s under Finance Minister Takahashi still loom large. Then, the episode ended with the assassination of Takahashi when he tried to withdraw the stimulus, and inflation rose markedly.

More…

 

Jim Sinclair’s Commentary

Just a little NATO thing. Nothing to worry about!

The many nukes there are in trustworthy hands of calm and collected people. The power shut off where the nukes lie should be fixed by now.

No report if the nukes are still there. It is just a little thing!

Ankara chaos: All-out war with helicopters, fighter jets, tanks, casualties reported
Published time: 15 Jul, 2016 21:53Edited time: 16 Jul, 2016 03:26

A Turkish F-16 fighter jet has reportedly shot down a military helicopter used by the pro-coup faction of the Turkish army, local broadcaster NTV reported, as reports suggested the capital of Ankara descended into chaotic clashes involving civilians and military.

A military helicopter was spotted opening fire above Ankara, Reuters reports, citing witnesses. Other reports claim that a loud explosion occurred at the headquarters of state broadcaster TRT.

More…

 

Jim Sinclair’s Commentary

How to make friends with the US and NATO, by Turkey.

Turkish Police Raid Incirlik Airbase Where US-Led Coalition Jets Are Based©
17:27 18.07.2016(updated 17:37 18.07.2016)

The Turkish police are raiding the Incirlik airbase where the US-led coalition’s jets are based, Hurriyet reported.

The Turkish prosecutor’s office with police are conducting searches at the Incirlik base.

On Saturday, Turkish Prime Minister Binali Yildirim said that Turkish airspace was closed due to the coup attempt in the country. US media reported that the Incirlik base in southern Turkey has been left without electricity and local authorities prevented movement to and from the base. Air operations from the base have also been suspended.

On Sunday, the US-led coalition resumed flights from the Incirlik airbase.

The former commander of the base was accused by Ankara of involvement in the attempted coup. The United States rejected asylum application of Gen. Bekir Ercan Van.

In July 2015, Turkey agreed to open up Incirlik to US manned and unmanned aircraft to conduct anti-terror operations in Syria against Daesh.

More…