Posted at 12:39 PM (CST) by & filed under In The News.

Dear Friends,

In hard times remember the things that are most important to you. The following pictures are from my last trip to Africa.

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Jim Sinclair’s Commentary

You think the OTC derivative salesman would get a special welcome in some of these Italian towns? Maybe we should pay for their tickets and let the mayors know they are coming.

‘Impossible to Understand’ Swap Burns 290-Person Italian Hamlet
By Alan Katz, Lorenzo Totaro and Elisa Martinuzzi

June 19 (Bloomberg) — Ortenzio Matteucci points to towns down the wooded Nerina valley in Italy’s Umbria region and blames peer pressure for his decision to let Polino, population 290, buy a U.S.-inspired financial swap he didn’t understand.

A retired steelworker with wavy gray hair, Polino’s Mayor Matteucci says he agreed to the interest-rate swap because Milan, with more than 1 million residents, and local towns Arrone and Stroncone all bought derivatives to try to save money. Polino’s contract has cost the village 6,579.66 euros ($9,200) more than it has earned since the town made the deal in 2005.

“At the time I thought: Can the Province of Terni, the City of Terni and all the other municipalities bigger than us, such as Milan, be all wrong?” said Matteucci, 59, dressed in a blue polo shirt and jeans. “You can make a mistake if you don’t have an appropriate and deep knowledge of this and just follow what other local governments do.”

Derivatives have burned towns from Polino to Milan to Erie, Pennsylvania. Jefferson County, Alabama, said it might need to declare bankruptcy because of costs associated with the contracts. Responsibility for the expenses in Italy’s second- biggest city and in Umbria’s smallest village sits with elected officials who agreed to financial instruments they didn’t fully grasp, said Stefano Taurini, a lawyer who specializes in corporate law in Milan.

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Jim Sinclair’s Commentary

JB Slear comments "Just another Friday night, no big thing."

United Community Banks, Inc. Announces Acquisition of Southern Community Bank
June 19, 2009 6:20 PM EDT

BLAIRSVILLE, GA — (MARKET WIRE) — 06/19/09 — United Community Banks, Inc. (NASDAQ: UCBI) announced today that its wholly-owned subsidiary, United Community Bank, has entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase the assets and assume the deposit liabilities and secured wholesale borrowings of Southern Community Bank. The Georgia Department of Banking and Finance declared Southern Community Bank closed today and appointed the FDIC as receiver. The FDIC then assigned the assets, deposit liabilities and secured wholesale borrowings of Southern Community Bank to United Community Bank under a loss sharing agreement.

"We are delighted to welcome the customers of Southern Community Bank to the family of valued customers of United Community Bank," says Jimmy Tallent, President and Chief Executive Officer of United Community Banks, Inc. "It is our number one objective to make this transition as transparent and easy as possible for both Southern Community customers and employees. Because United Community Bank elected to assume both insured AND non-insured deposits, no customers of Southern Community Bank will lose any of their deposits.

"Under the loss sharing agreement," Tallent continued, "the FDIC will reimburse United Community Bank for losses on Southern Community Bank’s loans and foreclosed properties. Also, as part of the loss sharing agreement, the acquired assets receive a 20 percent risk weighting for regulatory capital purposes, therefore the impact on our regulatory capital ratios will not be significant."

As of March 31, 2009, Southern Community Bank reported total assets of $372 million, loans of $224 million, customer deposits of $197 million and other deposits and borrowings of $155 million. Under the terms of the agreement, United Community Bank has the option to purchase, or to assume the leases on, all five Southern Community bank locations, most of which are contiguous to existing United Community Bank locations.

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Jim Sinclair’s Commentary

This is a major development in a geopolitical flashpoint. I assume that since the top guy has spoken out violence is not out of the question.

Stratfor has dropped their subscription price sharply. Their website is www.stratfor.com

Iran: The Supreme Leader Draws the Line

Summary

Iranian Supreme Leader Ayatollah Ali Khamenei spoke to the Iranian people during Friday prayers June 19, siding with Iranian President Mahmoud Ahmadinejad and ordering protesters to end their demonstrations. Khamenei has decided that using force to suppress the uprising is worth the risk, even if it leads to greater infighting among the power brokers of the system. It remains unclear if Ahmadinejad’s opponents will stage a showdown, but the protests have grown enough in size and energy to take on a life of their own.

Analysis

Iranian Supreme Leader Ayatollah Ali Khamenei delivered a rare but critical Friday sermon prayer June 19 in which he addressed the continuing public unrest in the wake of President Mahmoud Ahmadinejad’s victory in the June 12 presidential election, as well as the schism among the country’s political leadership. As expected, he took a clear position in favor of the president, rejecting accusations of electoral fraud and framing the conflict in terms of foreign powers exploiting the Islamic republic’s internal troubles. More importantly, he warned both the protesters and their leaders to halt the demonstrations and that they would be responsible for any bloodshed.

Khamenei has clearly opted for the forcible suppression of the uprising. STRATFOR had pointed out in a previous report that the country’s elite ideological military force, the Islamic Revolution Guards Corps (IRGC) has taken command of domestic law enforcement in Tehran. Consequently, from today forward, we can expect to see security forces crush protests. That the two main defeated challengers of Ahamdinejad, former prime minister Mir Hossein Mousavi and former speaker of parliament Mehdi Karroubi did not attend the prayer session shows that they are not about to accept the verdict.

At the same time, Mousavi and Karroubi cannot be perceived as openly defying the supreme leader and they have an interest in the preservation of the cleric-led political system. Furthermore, their supporters on the streets are far more radical than they are because Mousavi and Karroubi are part and parcel of the system (something which Khamenei pointed out when he said that that all four candidates in the recent presidential election belonged to Iran’s Islamic establishment). Therefore, they will have a hard time balancing between the need to sustain their opposition to the results of the election and controlling the protesters on the streets, especially during a major security crackdown. Regardless of whether the opposition leaders choose to take charge of the demonstrations, the protests have swelled enough in size and energy to take on a life of their own.

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Jim Sinclair’s Commentary

This is an extremely sad situation akin to the show now being run on the History Channel titled "Life After People."

The Packard plant, which might be considered as the start of the death of Detroit, also downed by debt, questionable management and design, is literally becoming a jungle of growth inside with a cadaver for an outside.

Michigan jobless rate is highest in decades
Auto, construction layoffs drive increase
BY KATHERINE YUNG • FREE PRESS BUSINESS WRITER
June 18, 2009

Michigan’s unemployment rate in May shot up to 14.1%, the highest level in more than a quarter-century, according to state figures released Wednesday.

As has been the case for many years, the increase was driven by layoffs in auto manufacturing and, to a lesser extent, construction. The jobless rate was the worst since the July 1983 level of 14.2% and significantly exceeds the May U.S. unemployment rate of 9.4%. The state’s unemployment rate will likely remain the nation’s highest.

"A lot of this was expected, considering where our auto companies are," said Rick Waclawek, director of the state’s Bureau of Labor Market Information and Strategic Initiatives.

After years of steadily inching upward, Michigan’s jobless rate has been accelerating higher in recent months as layoffs have mounted. Just a year ago, in May 2008, the unemployment rate stood at 8.2%.

The auto industry’s woes continue to cost Michigan dearly. Its manufacturing industry has shed 37,000 jobs during the last two months, including 16,000 in May.

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Jim Sinclair’s Commentary

In the arena of Green Shoots, the newest Bankster’s cliché, you need to ask yourself where economic recovery will come from as unemployment reaches into double digits on the understated skewed present indices. This is another reason why Shadow Statistics is so important to your trend thinking.

NY state unemployed soars to 33-year high
Thu Jun 18, 2009 3:15pm EDT
By Joan Gralla

NEW YORK (Reuters) – More than 800,000 New York state residents were unemployed in May, the highest level in 33 years, and another sign the state is still mired in recession, the state labor department said on Thursday.

The New York state unemployment rate rose to 8.2 percent in May from 7.7 percent in April, the highest level since February 1993, the agency said in a statement.

The jobless rate in New York City, which powers the state’s economy, climbed to 9 percent in May, its highest since October 1997, from 8 percent in April.

Wall Street’s securities industry helped boost city and state tax surpluses in the last boom, but James Brown, state labor market analyst, said the sector cut 900 jobs in May, and has lost 21,800 over the year.

The entire financial sector, including banking, real estate and insurance, sliced 1,900 workers, for a year-over-year loss of 28,000 jobs, Brown said.

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Jim Sinclair’s Commentary

For your information.

‘Something different" happening with new flu – CDC
Thu Jun 18, 2009 5:41pm EDT
By Maggie Fox, Health and Science Editor

WASHINGTON, June 18 (Reuters) – The new strain of H1N1 flu is causing "something different" to happen in the United States this year — perhaps an extended year-round flu season that disproportionately hits young people, health officials said on Thursday.

An unusually cool late spring may be helping keep the infection going in the U.S. Northeast, especially densely populated areas in New York and Massachusetts, the officials at the U.S. Centers for Disease Control and Prevention said.

And infections among healthcare workers suggest that people are showing up at work sick — meaning that workplace policies may be contributing to its spread, the CDC officials said.

The new strain of swine flu is officially a pandemic now, according to the World Health Organization.

So far the virus is causing mild to moderate disease, but it has killed at least 167 people and been confirmed in nearly 40,000 globally.

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Jim Sinclair’s Commentary

Honest Abe’s Used Auto Emporium has now been taken over by the entire US public. I wonder if the present Administration can fund a guy in a plaid suit, white socks and black shoes to be the Clunker Czar.

Von Mises and Ricardo are revolving in the graves at a Japanese auto’s 14,000 RPM. The Chicago School has decided to shut down and enter the used car business.

The used car market auctions are presently a disaster but now will give some enterprising crooks a stop loss at $4500. No one needs to steal from Medicare if they can turn in an old junker and get $4500 in a fake new car sale with the assistance of a crooked car dealer.

TRADE THAT CLUNKER
PROGRAM’S PROMISE: $4,500-PER-CAR
By PAUL THARP
Last updated: 2:07 am
June 19, 2009

Your old clunker can bring as much as a $4,500 check from Uncle Sam if you dump it to buy a new car — so long as it’s not another gas guzzler.

The government’s "cash for clunkers" incentive program designed to boost sales of fuel-efficient vehicles got the green light of Senate approval yesterday, and is on its way to be signed into law by President Barack Obama.

Ford Motor and General Motors have pressured Congress all year for the novel trade-in incentive to help break Detroit’s long and punishing sales slump.

A similar rebate program in Germany to clear clunkers off its roads caused new-car sales there to jump as much as 40 percent. Similar plans in China and France lifted sales by 15 percent and 8 percent, respectively.

Proponents are hoping for a busy autumn in vehicle sales. The first checks could start arriving by Sept. 1, with the program’s end set for Sept. 30.

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GOLDEN SHOOTS
June 19th, 2009 by Egon von Greyerz

No green shoots

There are no green shoots. Every single piece of economic and market news we observe confirms our view that the current optimism in the world economy is purely based on sentiment and not on facts.

The current corrective rallies in world stock markets were forecast by us in our January Newsletter. Corrective rallies create false optimism and hope. This is what we are seeing currently.

So, what indicators are telling us that things are going to get a lot worse:

· Unemployment is increasing rapidly in all countries

· Government deficits are rising at an accelerating pace

· Many local governments, counties and cities are virtually bankrupt

· Household finances are worsening rapidly

· Bank balance sheets are as leveraged and as unsound today as when the crisis started

· Banks are not recognizing that a major part of consumer loans will never be repaid

· Company failures are rising fast

· Housing market is continuing to deteriorate in most countries and especially in the  USA, UK and Spain

· Commercial real estate is in a precarious state. Banks are not writing down their loan books to market values

· US 30 year treasury bond rates are in a strong uptrend indicating the world is becoming increasingly unwilling to finance the excesses of a bankrupt US government

So what are the golden shoots?

Gold has been consolidating for the last four months and is now ready for the next major move up.

We have some very strong technical indicators which tell us that the consolidation in gold will finish at the latest next week and thereafter we will see gold going up strongly in July and for the next few months until the next consolidation in late autumn.

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Jim Sinclair’s Commentary

In all fairness we do have one Green Shoot that should be recognized.

MCDONALD’S GO LARGE ON JOB APPLICATIONS
Friday, June 19, 2009

It is hard not to sneer, but apparently more than 2,200 people every day are applying for a job at McDonald’s.

The lure of the burger empire is proving too much for jobseekers from diverse employment backgrounds and the global junk food giant is finding university graduates, bank workers and teachers among their applicants. I’ll declare now that my vested interest here is that I was refused a job by McDonalds when I was just 16 years old.

Why I was knocked back still remains a mystery, as my brother, to his eternal embarrassment, was the branch’s star employee at the time and I knew the manager, who interviewed me, very well. He obviously didn’t see my future and that of the Golden Arches in karmic synchronicity.

Anyhow, with unemployment at a record level of 2.2 million, I guess it’s all stops out as people look for that first rung on the career ladder or cling to it with a vice-like grip to keep a wage, any wage, coming in. And McDonald’s are doing their best, with the company hiring 140 people a day to flip burgers, cook fries and ask customers "Would you like a large meal" at every order.

But let’s face it, even the Oxford English Dictionary looks down its nose at the McJob, describing it as ‘an unstimulating, low-paid job with few prospects’. And though McDonald’s keep fighting to have that perception changed, it’s an uphill battle.

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Israel’s military planning for a multi-front war

Israel’s military has intensified coordination between the army and air force to conduct simultaneous operations in the Gaza Strip and Lebanon.

Officials said the effort reflects an assessment that Israel’s next war would include such adversaries as Hamas, Hizbullah and Syria.

"The Israeli military’s future operations will be broader and more demanding in terms of their scope and pace, with more risks than Operation Cast Lead," Israeli Defense Minister Ehud Barak said.

Operation Cast Lead marked the Israeli military attack on the Hamas regime in the Gaza Strip. The 22-day war spanned December 2008 and January 2009.

In an address to Israeli military officers on June 9, Barak envisioned a war with far greater Israeli casualties than that against Hamas. The minister said the next war would take place under more difficult conditions than the Israeli air, naval and ground campaign in the Gaza Strip, a flat area of 360 square kilometers.

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

Dear Jim,

You discussed as far back as 2005 the concept of “Authoritarian Free Enterprise” as the replacement for our present business circumstances.

I have come to understand you were alluding to a form of modern “Fascism.”

I agree that the opportunity for the entrepreneur in general business is going to be limited as compared to what you and I experienced in our careers.

How do we advise our kids?

Sincerely,
CIGA Chris

Dear Chris,

I have given this a great deal of thought where my grandchildren are concerned.

They must be free to follow their heart’s desire to determine their own futures AFTER they have mastered a trade.

The trade they should master is a basic function required for future society, such as:

Nursing
Care of special needs people
Behaviorist to the challenged
Carpenter.
Plumber.
Electrician.
Mechanic.
Farming.
Animal husbandry.
Commercial Fishing
Long Haul trucking.
Dirty Jobs.

Once this has been accomplished so that they are licensed or reached the level of master at their occupation they can do their trendy thing if they still wish.

In society even more complex survival exists in simplicity.

Respectfully,
Jim

Jim,

OPM (Other People’s Money). Cheap money got us into this mess. Logically, cheap money will resolve it. Excuse my short hand, but that type of logic can only be described as f**ing idiocy. Policy decisions that continue to expand US’s foreign liabilities (chart 1) will only further devalue the U.S. dollar and send gold closer its equilibrium price (chart 2).

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CIGA Eric

Hi Jim,

This article regarding HK business proves you right once more. The problem is omnipresent and omnipotent. The problem may resolve faster in Asia, but they still have problems too. And looks which city of which nation is coming to the rescue.

In Hong Kong thousands of firms go under, Shanghai offers partnership against crisis
Thousands of firms have already gone bankrupt this year. The economic recession might be slowing but id does not appear to be stopping. Local authorities in fact expect economy to shrink by 5.5-6.5 per cent. Shanghai boss offers hand to Hong Kong, like “brothers”.

Hong Kong (AsiaNews/Agencies) – In May bankruptcy petitions in Hong Kong jumped 54 per cent from a year earlier, an indicator that the recession shows is not letting up. Hong Kong’s economy tipped into recession in the third quarter of last year and the government has forecast it will contract by between 5.5 and 6.5 per cent this year.

The economy of the former British crown colony has felt the effect of collapsing exports to the United States and Europe. Many Hong Kong manufacturing companies have had to shut down because of collapsing sales.

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Jim,

Who ever wants to see an example of governments who counterfeited the opponent’s currency in times of war can take a look at the Operation Bernhard performed by the Nazis during WWII. The point was to flood the UK economy with forged Bank of England currency:

http://en.wikipedia.org/wiki/Operation_Bernhard

There is a pretty recent movie about the story called The Counterfeiters

http://en.wikipedia.org/wiki/The_Counterfeiters_(film)

Regards,
CIGA Christopher

Posted at 10:24 PM (CST) by & filed under General Editorial.

Dear Friends,

There is no better proof that we are getting extremely close to the Armstrong/Alf point of lift off than the violence of the shorts in their desire to cover both in paper gold and the long suffering junior gold shares.

The method used is to increase the short position now while we are waiting for the uptick rule to be reinstated all while driving a bulldozer of selling into markets. This selling is not to sell shares as much as it is to make a grandstand play to shake the confidence out of the bulls.

This type of strategy in paper gold today and many of the highly shorted junior gold shares is to ignite the passion of fear in holder’s hands, therein allowing the shorts to make cover.

Call or email your company and inquire about their fundamental position. If it is good, then be sure you are witness to a strategy that is as old as markets themselves. This strategy is used by bulls to run shorts, and shorts to make cover depending on the circumstances.

In my opinion we are very close now to the best and longest move upwards in the gold market.

Gold is going to $1650 and then on to Alf’s numbers.

The US dollar has nowhere to go as its support here has been only algorithms and coordinated statements of support, but actions to the contrary by the BRICs.

Stay the course.

Sincerely,
Jim

Posted at 10:23 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Due to the many emails calling my attention to this article and the FT commentary asking what my take on it is, I am repeating yesterday coverage of this subject here on JSMineset.

Let’s talk street smarts. There is nothing mysterious about this. This is not your cookie cutter type of counterfeit operation if they are in fact fakes.

Governments in times of war counterfeit the opponent’s currency and government bearer bonds to balloon the money supply, inflicting injury by inflation. These instruments, even not in official figures, act the same as a massive increase in the money supply. $134 billion is not massive by today’s standards but how do you know this is the only suitcase? Nobody is that stupid with funds of this size, even if they are counterfeit. You can be sure there is more where this came from. The probability then is that the $134 billion is not all of it and might just be the tip of the iceberg.

The above is common knowledge amongst intelligence services.

These are bearer bonds so you only need to have a few purchased in the market to successfully kill the serial number by counterfeiting your own serial numbers. You use these counterfeit instruments to make loans in modest amounts at various less-than-ethical international operations, preferably those that specialize in illicit funds. Lay a hundred million on the banker and get all the loans you want.

If the government bearer bonds are real then some big guy is making a run for it. This is top dog money, and would indicate a serious and well informed reasoning on the part of the entity running for the hills. People with this type of money are not usually stupid. That amount of real bearer bonds is a reach for drug funds. It would be governmental.

Yeah, mysterious, only to the naive world.

The Mysterious Case of the Seized Bearer Bonds, Worth $134 Billion
Sat Jun 13, 2009 at 03:50:09 PM PDT

The US media has been generally silent about $134 billion in bearer bonds seized by Italian police at the Swiss border. On June 8, AsiaNews reported:

Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar each.

Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.

Karl Denninger has been following the story, and it appears to be true that this vast sum was, in fact, seized.

It is a mystery why the story is receiving coverage in Europe and Asia, but not in the US. Rumors have been swirling about possible involvement of the Japanese, Chinese, and/or Korean governments, with the last being more likely if the bonds are counterfeit. Whether real or fake, the apparent fact of the smuggling raises all kinds of questions, with no easy answers. Mr Denninger applies his considerable intelligence to the matter, in Sherlock Holmes fashion:

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Posted at 10:12 PM (CST) by & filed under Jim's Mailbox.

Hi Jim,

I know how busy you are so I won’t be offended if I don’t hear back. About two years ago I decided to rebalance my portfolio from 2/3 mining stock to 1/3 stock to physical. Lately I am considering abandoning stock altogether in favor of physical. My main concern is that the dollar, ultimately doomed, is running out of time. I would hate to get stuck with a beeellion dollars of worthless paper. I have been very patient for ten years, but lately it appears to me that the freaks will be able to run out the clock. Would you recommend hanging in until the end of the "Summer of Hell," or should I begin liquidation now? As they say "don’t panic unless you have to, then be the first!"

Thanks for everything. You are in my prayers. We are ALL in my prayers.

CIGA Doug

Dear Doug,

The "Summer of Hell" as you put it might just be hell for the shorts. I can only say that this is certainly not the time to do that if the companies you hold are in fact sound.

The "Sell in May and go away" glib cliché might be very costly this time around.

I do not think Armstrong, Alf and I are all wrong at once. As I see it, we are extremely close to the next major move in gold move. We did look for pressure coming into the third week of June and for all practical purposes are just there.

Today was an exercise in doing everything possible to put into people’s mind just what you are thinking by the shorts pounding bids for this exact purpose.

If you care to sell into good strength in time to relieve fear that is another subject. If your emotions are driving you to suffering why not stop quoting the situations and wait at least one (preferably two) weeks. This is my most sincere and heartfelt advice I can offer you.

I am not devoid of understanding what pain is emotionally. I simply see it as a tool of the destroyers which is getting to you as a representative of the non-professional public.

Most sincerely,
Jim

Jim,

I have a friend here.

This guy has several degrees in the financial realm and was just hired out of his already good job by the FDIC in CA to come down and shut banks down. He told me tonight at a goodbye meeting that bank seizures and shutdowns were going to get worse and that "this is the big one". He has never heard of Jim Sinclair and knows nothing of the kind of talk that goes on here at JSMineset.

He is absolutely not given to hyperbole. Things are gonna’ get worse. Obama was so right; "You ain’t seen nothing yet."

CIGA Bob

Dear Jim,

A link to the E2020 update of June 17 is provided below. In reading it, I couldn’t help but think about your own predictions for the dollar and its affect on the price of gold. These folks have been mostly spot on with past economic forecasts.

CIGA Doug

Click here to read the report…

Posted at 3:31 PM (CST) by & filed under In The News.

"The limits of tyrants are prescribed by the endurance of those whom they oppress."
–Fredrick Douglass, August 4, 1857

Jim Sinclair’s Commentary

Here is a rock and hard place. The dollar is becoming less acceptable as a reserve currency because of all the QE.

A failure to apply QE at warp speed will result in the 30 year US Treasury breaking its 28 year uptrend line. That will send rates into the stratosphere and then China’s treasury instruments into the trash heap. QE must continue. The uptrend line will break harder on the downside in November of 2009.

China sells US bonds to ‘show concern’
Jun 17 04:20 AM US/Eastern

A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday.

The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction.

"China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar," He Maochun, a political scientist at Tsinghua University, told the Global Times.

According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March.

It was the first month since June 2008 that Beijing failed to purchase more US T-bills.

Zhang Bin, a researcher at the Chinese Academy of Social Sciences, said China’s move showed a more cautious attitude.

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Jim Sinclair’s Commentary

I could not have said this better. The dollar will not survive this Fall and will fall sharply this winter.

"US officials wanted to attend Yekaterinburg as observers. They were told no. It is a word that Americans will hear much more in the future."

Washington is unable to call all the shots
Financial Times
By Michael Hudson
Published: June 15 2009 03:00 | Last updated: June 15 2009 03:00

Challenging the American empire will be the focus of meetings in Yekaterinburg, Russia, today and tomorrow for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other leaders of the six-nation Shanghai Co-operation Organisation. The alliance comprises Russia, China, Kazakhstan, Tajiki-stan, Kyrgyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia.

The attendees (who will be joined on Tuesday by Brazil for trade discussions) have assured American diplomats that dismantling the US financial and military hegemony is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the US or for the dollar as a vehicle for trade among these countries.

The meeting is an opportunity for China, Russia and India to "build an increasingly multipolar world order", as Mr Medvedev put it in a St Petersburg speech this month. What he meant was this: we have reached our limit in subsidising the US military encirclement of Eurasia while also allowing the US to appropriate our exports, companies and real estate in exchange for paper money of questionable worth.

An "artificially maintained unipolar system", Mr Medvedev said, was based on "one big centre of consumption, financed by a growing deficit, and thus growing debts, one formerly strong reserve currency, and one dominant system of assessing assets and risks".

Keen observers of America, if not effective managers of their own economies, these countries argue that the root of the global financial crisis is that the US makes too little and spends too much. Especially upsetting is US military expenditure – such as military aid to Georgia or the presence in the oil-rich Middle East and central Asia – using money that foreign central banks recycle.

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Jim Sinclair’s Commentary

You ask what is next from a person screaming for attention, lacking all his paddles in the water and seemingly being ignored by the public? A shot at Hawaii that misses hopefully.

North Korea may fire a missile toward Hawaii
By HYUNG-JIN KIM, Associated Press Writer
Thu Jun 18, 7:48 am ET

SEOUL, South Korea – North Korea may fire a long-range ballistic missile toward Hawaii in early July, a Japanese news report said Thursday, as Russia and China urged the regime to return to international disarmament talks on its rogue nuclear program.

The missile, believed to be a Taepodong-2 with a range of up to 4,000 miles (6,500 kilometers), would be launched from North Korea’s Dongchang-ni site on the northwestern coast, said the Yomiuri daily, Japan’s top-selling newspaper. It cited an analysis by the Japanese Defense Ministry and intelligence gathered by U.S. reconnaissance satellites.

The missile launch could come between July 4 and 8, the paper said.

While the newspaper speculated the Taepodong-2 could fly over Japan and toward Hawaii, it said the missile would not be able to hit Hawaii’s main islands, which are about 4,500 miles (7,200 kilometers) from the Korean peninsula.

A spokesman for the Japanese Defense Ministry declined to comment on the report. South Korea’s Defense Ministry and the National Intelligence Service — the country’s main spy agency — said they could not confirm it.

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Jim Sinclair’s Commentary

Now here is an example of World Class closing of the barn door after the horses have left. Who are they kidding?

Standard & Poor’s Cuts Ratings On 22 Banks
6/17/2009 1:36 PM ET

(RTTNews) – Credit ratings agency Standard & Poor’s lowered its ratings and revised its outlooks on 22 U.S. banks on Wednesday, citing concerns that operating conditions will be less favorable than they were in the past due to volatile financial markets during credit cycles and tighter regulatory supervision.

Standard & Poor’s also said the changes reflect its ongoing broad-ranging reassessment of industry risk for U.S. financial institutions. The agency indicated that the banking industry is now in a transition period and will likely undergo material structural changes.

Further, the agency said its overall assessment of the industry includes expectations that loan losses are likely to continue to increase and could rise beyond current expectations.

Standard & Poor’s credit analyst Rodrigo Quintanilla said, "We believe the banking industry is undergoing a structural transformation that may include radical changes with permanent repercussions."

"Financial institutions are now shedding balance-sheet risk and altering funding profiles and strategies for the marketplace’s new reality," Quintanilla added. "Such a transition period justifies lower ratings as industry players implement changes."

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Jim Sinclair’s Commentary

Actually, I am amazed that something as correct and intelligent as this is entertained by the dullest people on the planet.

I smell politics and pressure on the Fed to ramp up QE without waiting for a second crisis.

Ron Paul’s "Fed Transparency" Bill Gets Majority House Support
Posted Jun 12, 2009
From The Business Insider, June 12, 2009:

The US House of Representative has joined the Cult of Paul.

Ron Paul, the famously anti-Federal Reserve Congressman from Texas has got 221 of his colleagues to sign onto a bill (via Zero Hedge) that would require a fresh, outside audit of the Federal Reserve. That’s more than enough to get the bill out of the House, though it now faces the more adult and deliberative House of LordsSenate, who are likely to have less interest in such seditious shenanigans.

The first Senate co-sponsor is rumored to be Jim DeMint of South Carolina, a favorite among the hard right and a possible Presidential candidate.

More…

Posted at 7:27 PM (CST) by & filed under General Editorial.

Dear Friends,

I am working quite hard to prepare for a business trip to China late next week.

Emails today went over the 700 mark which is an indicator in itself. The record stands at 6000 emails in a single day.

I am trying to answer as many calls, emails and faxes as possible, however that number will be nowhere near everyone who has emailed in. The reality is I am only one man and there is not enough time in the day. Trader Dan and Editor Dan are equally buried.

For those of you who follow Alexa Page Ranks, I was informed that JSMineset’s rank yesterday was 36,027, roughly what it has been all week. Not bad for a website run fully by a number of people you could count on a single hand.

Thank you all for the support!

Respectfully yours,
Jim and the JSMineset Team

Posted at 4:57 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Gold insures not only your finances, but potentially you as a person!

17 days in June are behind us. The third week of June is upon us. The downside in gold had $918 and $932 as its most probable lows. $932 was a fulcrum point of the US night sessions around the world.

Monty has always been the balance man in the gang. It seems like he is moving to the right of this mess by today’s report. Review the 2007 Au consolidation before it fired up and out and compare that to the recent gold market action here.

Get done whatever you plan to do now as a bottom here and into next week seals Armstrong’s $5000 and Alf’s potential overrun in this leg of $3500.