Posted at 4:51 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Just your usual weekend in the "New Normal" of geopolitics.

India, Pakistan Intensify Shooting Across Border; Iran Downs Israel Drone; ISIS Seizes Military Airport
Tyler Durden on 08/24/2014 12:07 -0400

Since in the New Normal no geopolitical events appear to have any adverse impact on risk and asset prices (because the central banks are always there to protect investors should the market "plunge" by say 5%) with general newsflow completely irrelevant on what has been a straight line up in the S&P since the announcement of QE4 in December 2012, one might as well see how much further geopolitical events can be pushed further before it all crashes.

In other words, time for this weekend’s geopolitical update.

Overnight both Pakistan and Iran have done their best to add to the geopolitical instability, which has already englufed Ukraine, and half the middle-east and north Africa, when on one hand Indian and Pakistani troops intensified firing across the border over the weekend killing at least four, an Indian official said on Sunday, straining ties between the arch rivals who recently called off top-level diplomatic talks. On the other moments ago news broke that Iran had shot down an Israeli spy drone heading for Iran’s Natanz nuclear enrichment facility.

Taking these one at a time.

First, Reuters reports that lime last week India said its foreign secretary would not meet with her Pakistani counterpart as scheduled on Monday because of plans by Pakistan to consult separatists from the border state of Jammu and Kashmir ahead of the meeting.

The cancellation dashed any hopes of near-term peace deliberations, chances of which had risen after Pakistani Prime Minister Nawaz Sharif attended the inauguration of Indian Prime Minister Narendra Modi about three months ago.

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What if China, Russia Succeed in Going off the Dollar? — Alasdair Macleod
Thursday, August 21, 2014
Henry Bonner

Alasdair Macleod writes the blog FinanceAndEconomics.Org. His research aims to explain the relationship between the dollar and gold, and to warn investors about the biggest threats to their wealth from macro-economic events.

Besides what the Fed is doing by printing money, there is another big threat to the dollar, said Alasdair. Countries in Asia are banding together in order to rid themselves of using the dollar in international trade.

He also warned that credible allegation of misconduct at the London bullion exchange could accelerate the trend of Shanghai becoming the world’s trading hub for gold.

“There is a thing called the Shanghai Cooperation Organization, an agreement principally between China and Russia, whereby they tie up the whole of Asia as their backyard. Other members are the countries north of Tibet, Tajikistan, Kyrgyzstan, Uzbekistan, and so on. In or soon after September, four new members will join – India, Pakistan, Iran, and Mongolia. That’s almost half the world’s population. The objective of the SCO is basically to settle international trades between these countries without using the dollar. I’m not saying they will necessarily achieve that, but that’s what they want to do. They don’t want to see trade settlements reflected in bank accounts in New York.

“It’s not just members of the SCO, either, that could eschew the dollar. The Middle East, for example, now principally sends exports to China and India, so there’s no pressing reason to use the dollar there.

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Tripoli bombed as Libya descends further into chaos and Egypt denies involvement
Libya’s capital bombed by warplanes as Egypt denies sending jets into Tripoli
2:33PM BST 24 Aug 2014

War planes attacked targets in Libya’s capital Tripoli on Sunday, hours after forces from the city of Misrata said they had seized the main airport.

Tripoli residents heard jets followed by explosions at dawn, but it was not clear who sent the planes.

Egypt’s president denied on Sunday any military involvement in Libya – a day after Islamist militias accused Cairo and the United Arab Emirates of bombing their posts in Tripoli.

The Libyan air force denied it was behind the attacks, in part because it didn’t have the capabilities or technology to carry out such guided attacks. This has raised suspicions that foreign countries, including European countries, were behind the strikes.

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Jim Sinclair’s Commentary

Coming to your bank soon.

G20 edging towards deal on ‘bail-in’ bond cushion for banks
By Huw Jones
LONDON Thu Aug 21, 2014 5:04am EDT

(Reuters) – Government leaders are expected to agree in November that the world’s top banks must issue special bonds to increase the amount of capital which can be tapped in a crisis instead of calling on taxpayers to come to the rescue, industry and G20 officials said.

The bonds, known as "gone concern loss absorption capacity" or GLAC, are seen by regulators as essential to stopping the world’s 29 biggest lenders from being "too big to fail".

The plans are being drafted by the Financial Stability Board, the regulatory task force of the Group of 20 economies which declined to comment ahead of a G20 summit in November, when G20 leaders will discuss the reform before it is put out to public consultation.

The reform would put in place the final major piece of G20 regulation on banking as the global body turns to a "post-crisis" agenda of fostering economic growth and bedding down the rules it has approved.

There had been unease in Asia and parts of Europe over how big the bond issues need to be to provide this cushion but there is now a new optimism amongst bankers and regulators that the G20 will reach a deal in November.

"The industry is definitely in favor of making resolution, supported by an appropriately flexible concept of GLAC, work. That is the key pending aspect on ending too-big-to-fail," said Andres Portilla, director of regulatory affairs at the Institute of International Finance, a Washington-based banking and insurance lobby.

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Inflation Watch: Is The $5 Bill The New $1 Bill?
Submitted by Tyler Durden on 08/23/2014 17:53 -0400

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Events, food purchased away from home and live entertainment are increasingly unaffordable to the bottom 90%.

It’s starting to feel like a $5 bill is the new $1 bill: everything that could be purchased with one or two dollars not that long ago is now $5 or even $10. A few days ago I was enjoying the Butte County Fair in California’s farmbelt (the Central Valley), and it seemed like a rural county fair was a price baseline that was far enough away from the urban artifice of $100 meals at fancy bistros to reflect the statistically elusive real-world inflation.

Everything was $5, or close to it: the carnival rides for kids: $5. The games (ring toss, etc.): $5. Funnel cakes, cotton candy, etc.: $5.

Whatever wasn’t $5 was $10: pulled pork sandwich, etc. There was almost no need for $1 bills, except at the admission booth: adults, $8/day, kids/seniors $4.

So let’s add up the costs for a family of two adults and two kids. Let’s say the kids each get four rides–that’s 4 X $5 = $20 X 2 = $40. Each kid gets two food items: $5 X 2 = $10 X 2 = $20, and gets to play two games: $5 X 2 = $10 X 2 = $20.

That’s $80. The parents get something to eat and maybe play a game or two: that another $40. The admission fee is $16 for adults and $8 for the kids, $24. Parking is $5.

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Islamic State militants seize Syrian airbase
Tabqa base almost entirely controlled by Isis, while in Iraq the Shia Turkoman community north of Baghdad remains under siege
Martin Chulov, Middle East correspondent
The Guardian, Sunday 24 August 2014 19.08 BST

Islamic radicals have seized most of an airbase in eastern Syria and are tightening a stranglehold on a minority Turkoman community north of Baghdad, as their pillage of the heartland of the Levant gains further momentum.

Militants from Islamic State (Isis) had breached the borders of the Tabqa base, which was the last base east of Aleppo still held by the Syrian regime, and now appeared certain to seize full control within days in another blow to all sides trying to slow the group’s progress through Iraq and Syria.

About 300 miles to the east, a community of 18,000 Shia Turkomans holed up in the town of Amerli, north of Baghdad, said they were running out of food and hope after a two-month siege by Isis, which is trying to starve them to death or force them to convert to the militants’ hardline brand of Sunni Islam.

In both locations, the bodies of fighters were reportedly defaced and displayed by Isis members, who have become feared and scorned for their unchecked barbarity.

Witnesses at the Tabqa base, not far east of the Isis stronghold of Raqqa, said that several captured Syrian soldiers had been beheaded.

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How Isis came to be
Three years ago, Islamic State did not exist – now it controls vast swaths of Syria and Iraq. How did we get here?
Ali Khedery
theguardian.com, Friday 22 August 2014 17.44 BST

Three years ago, the Islamic State (Isis) did not exist; now it controls vast swaths of Syria and Iraq. Showing off its handiwork daily via Twitter and YouTube, Isis has repeatedly demonstrated that it is much more than a transnational terrorist organisation – rather, it is an entity with sophisticated command, control, propaganda and logistical capabilities, and one that has proven its ability to take and hold strategically critical territory at the heart of the Middle East.

But as world leaders grapple with how to respond to this unprecedented crisis, they must first understand how Isis came to exist.

Principally, Isis is the product of a genocide that continued unabated as the world stood back and watched. It is the illegitimate child born of pure hate and pure fear – the result of 200,000 murdered Syrians and of millions more displaced and divorced from their hopes and dreams. Isis’s rise is also a reminder of how Bashar al-Assad’s Machiavellian embrace of al-Qaida would come back to haunt him.

Facing Assad’s army and intelligence services, Lebanon’s Hezbollah, Iraq’s Shia Islamist militias and their grand patron, Iran’s Revolutionary Guards, Syria’s initially peaceful protesters quickly became disenchanted, disillusioned and disenfranchised – and then radicalised and violently militant.

The Shia Islamist axis used chemical weapons, artillery and barrel bombs to preserve its crescent of influence. Syria’s Sunni Arab revolutionaries in turn sought international assistance, and when the world refused, they embraced a pact with the devil, al-Qaida.

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Posted at 1:17 PM (CST) by & filed under In The News.

To consider the [Supreme Court] as the ultimate arbiters of all constitutional questions is a very dangerous doctrine, placing us under the despotism of an oligarchy. Our judges are as honest as other men…and not more so, with the same passions for party, power, and privilege. Their power is extremely dangerous, as they are in office for life and not responsible, as the other functionaries are, to elective control.
– Thomas Jefferson.

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Angela Merkel heads to Kiev as some Russian aid trucks begin to leave Ukraine
First lorries from Moscow’s controversial aid convoy to rebel-held parts of Ukraine begin returning to Russia, reporters and OSCE monitors say
By Agencies
5:34PM BST 23 Aug 2014

A total of 184 vehicles from the Russian aid convoy which crossed into Ukraine on Friday without permission returned to Russia, a Ukrainian military spokesman said.

"According to our information as of 1pm (10.00 GMT), the departure from the territory of Ukraine by 184 Russian vehicles has been confirmed," the spokesman, Andriy Lysenko, told Reuters.

He said they had left through the same crossing point by which they had entered via the Ukrainian border settlement of Izvaryne. No checks by Ukrainian border guards or customs officers had taken place.

Asked how many Russian vehicles still remained in Ukraine, he replied: "I don’t know."

It comes after several countries rebuked Russia in that closed-door emergency meeting at the UN for "what many called an illegal and unilateral action by the Russian federation," British ambassador Mark Lyall Grant, the council president, told reporters.

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Isil besieges town of Amerli amid fears of repeat of Sinjar massacre
Hardline Islamists are surrounding the town of Amerli – sparking concern for the safety of the 18,000 Shia Turkmen residents, and fears of a repeat of the Mount Sinjar massacre
By Harriet Alexander, and Ruth Sherlock in Beirut
11:33AM BST 23 Aug 2014

The United Nations has called for a concerted effort to end the siege of Amerli, a town 110 miles north of Baghdad, which is home to 18,000 Shia Turkmen.

The town has been encircled by jihadists from the Islamic State of Iraq and the Levant (Isil) for the past two months. The majority of the residents of Amerli are part of the Turkmen ethnic group, who are descendants of Ottoman Turks and make up roughly four per cent of Iraq’s population. As Shia, they are directly targeted by Isil, who consider them apostates.

Nickolay Mladenov, special representative of the United Nations secretary-general for Iraq, called on the international community to halt “the unspeakable suffering of Amerli’s inhabitants” – who are left with little medicine and dwindling supplies of food, water and electricity.

“The situation of the people in Amerli is desperate and demands immediate action to prevent the possible massacre of its citizens,” he said.

“The town is besieged by Isil and reports confirm that people are surviving in desperate conditions. I urge the Iraqi government to do all it can to relieve the siege and to ensure that the residents receive lifesaving humanitarian assistance or are evacuated in a dignified manner.

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Isis gains in Syria put pressure on west to deliver more robust response
US looks at options for action in Iraq as Islamic State ramps up attacks while senior Tories call for UK to join in air strikes
Spencer Ackerman in New York, Andrew Sparrow and Martin Chulov
The Guardian, Friday 22 August 2014 15.48 EDT

Western powers are coming under mounting pressure to do more to confront Islamic State (Isis) in its stronghold in Syria, as the heavily armed militants edged closer to taking an important air base that would cement their domination over a swath of the country’s north.

As US aircraft continued to pound the Islamist militants in northern Iraq, the Obama administration was studying a range of options for pressuring Isis in Syria, primarily through training "moderate" Syrian rebels as a proxy force, with air strikes as a possible backup.

Leaders in Washington and London are adamant they will not collaborate with the regime of Bashar al-Assad in tackling their common enemy, and on Friday the Pentagon insisted that it had yet to decide on whether to expand the US air war into Syria.

But Isis has demonstrated its rampant authority in northern Syria in recent days, with the brazen murder of the US hostage James Foley and a series of attacks on towns and villages in the north, including the vital airbase at Taqba, where it has surrounded a detachment of Syrian army soldiers. It now holds a swath of territory in Syria and Iraq that is larger than the UK and home to at least four million people.

"The Islamic State is now the most capable military power in the Middle East outside Israel," a senior regional diplomat said on Friday.

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Jim Sinclair’s Commentary

Rates must in time rise. What a mess that will be.

Has Yellen opened door to rise in interest rates?
US Fed chief appears to raise prospect of a rise in interest rates, despite warning on difficulty of working out whether jobs market has been permanently transformed
By Katherine Rushton
4:06PM BST 22 Aug 2014

Janet Yellen, chairman of the US Federal Reserve, appeared to open the door to an early rise in interest rates on Friday, as she warned that it was almost impossible to determine whether the labour market would ever bounce back to its state before the economic crisis.

In a speech at the annual economic conference at Jackson Hole, Wyoming, she said that the Fed has used monetary policy in order to get as many people back work as possible, but it is becoming hard to tell how long it might take to reach the central bank’s targets.

“A key challenge is to assess just how far the economy now stands from the attainment of its maximum employment goal,” she said.

“Judgments concerning the size of that gap are complicated by ongoing shifts in the structure of the labour market and the possibility that the severe recession caused persistent changes in the labour market’s functioning."

She added: "At the FOMC’s most recent meeting … the Committee reaffirmed its view ‘that it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after our current asset purchase program ends, especially if projected inflation continues to run below the Committee’s 2pc longer-run goal, and provided that longer-term inflation expectations remain well anchored’.

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Jim Sinclair’s Commentary

Draghi will do anything in words to restrain the euro

ECB’s Draghi open to easing of austerity in eurozone
Mario Draghi suggested that countries in Europe should be encouraged to increase spending within the existing rules
By Andrew Critchlow
8:22PM BST 22 Aug 2014

Mario Draghi, the European Central Bank president, has opened the door for member states to ease back on austerity to reduce unemployment and revive flagging economic growth in the region.

“The long-term cohesion of the euro area depends on each country in the union achieving a sustainably high level of employment,” Mr Draghi said in a speech delivered at the global central bankers meeting in Jackson Hole.

“And given the very high costs if the cohesion of the union is threatened, all countries should have an interest in achieving this.”

Mr Draghi suggested that countries in Europe should be encouraged to increase spending within the existing rules designed to reduce deficits and rein in debt in order to boost economic reform and create more jobs.

His remarks follow a series of worrying figures that show growth in major economies such as Germany and France stalling, while Italy has returned to recession.

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Jim Sinclair’s Commentary

Makes some sense in a senseless world.

US and UK should back Assad to defeat ISIS – senior UK MP
Published time: August 22, 2014 11:30
Edited time: August 22, 2014 15:14

The US and UK must work with Bashar Assad’s Syrian regime if they are to defeat the Islamic State of Iraq and Syria (ISIS), the chairman of Britain’s intelligence and security committee warns.

Sir Malcolm Rifkind, one of the UK’s most senior MPs, told the Financial Times (FT) in an exclusive interview that the horrific murder of American journalist, James Foley, highlights the urgent need to take action against the extremist group Islamic State (IS, formerly ISIS/ISIL), whose swift rise to power in the Middle East has remained largely unchecked by Western intervention.

While the militants have annexed vast swathes of territory in northern Iraq, their central power base remains in Syria.

“ISIS need to be eliminated and we should not be squeamish about how we do it,” Rifkind told the FT on Friday.

Although he made it clear he does not support the Assad regime in principle, Rifkind reluctantly emphasized that “sometimes you have to develop relationships with people who are extremely nasty in order to get rid of people who are even nastier.”

Following a brutal civil war that has devastated and divided Syria while providing a breeding ground for the Islamic State, the Assad regime has faced isolation from myriad world powers.

Prior to Rifkind’s interview, Western states expressed no willingness to work with Damascus. On Wednesday, President Obama’s deputy national security adviser, Ben Rhodes, said Assad was “part of the problem.”

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Islamic State militants seize four more foreign hostages in Syria
Jihadists flush with arms and relying on shock tactics abduct Europeans and Japanese national as US strikes continue
Martin Chulov, Middle East correspondent
The Guardian, Wednesday 20 August 2014 20.54 BST

Flush with looted weapons, buoyed by sweeping gains in Syria and eager to shock, Islamic State militants have seized four more foreign hostages near Aleppo in recent days, taking to more than 20 the number of foreigners they now hold.

The latest captives, two Italian women, a Dane and a Japanese national, were seized in or near Syria’s largest city. All held are either reporters, photographers or aid workers taken near Aleppo or Idlib. They have been subsequently moved to Raqqa, the Isis stronghold in north Syria.

The abductions have controversially proved good business for Islamic radicals. In the past six months at least 10 hostages, including a Dane, three French nationals and two Spaniards, were freed after lengthy negotiations with captors, who demanded ransoms. Some organisations have insisted on information blackouts about nationals still being held.

One former hostage said the suspected killer who appeared in the recent video, apparently murdering the US journalist James Foley, was one of three Britons who had guarded him in Raqqa. He said the man had been responsible for negotiating hostage releases, dealing with families of captives via email.

Attention will now turn to the captives still in Isis hands. Steven Sotloff, a freelancer who had contributed to Time magazine and Foreign Policy, was kidnapped a year ago near the Syrian-Turkish border. According to the video of Foley’s death, Sotloff’s fate depends on whether the US continues its aerial campaign in north Iraq, which has driven Isis fighters back from the key Mosul dam.

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Isis fighters surround Syrian airbase in rapid drive to recapture lost territory
Syrian reinforcements rush to defend Tabqa but there are fears that no regional military can slow group’s momentum
Martin Chulov, Middle East correspondent
The Guardian, Friday 22 August 2014 19.22 BST

Islamic State extremists rampaging through Iraq have now turned their sights back towards Syria, where only a besieged airbase stands between the terror group and a rush for the Mediterranean coast that could split the country in two.

The attack on the Tabqa airbase in eastern Syria comes as Isis continues to move back towards areas it controlled north of Aleppo until February. Using weapons the group looted from abandoned Iraqi military bases, Isis has returned with a vengeance to the area, stunning regional powers with its rapid advances.

Less than three months after taking Iraq’s second and fourth biggest cities, much of Anbar province and the Syrian border, the group is establishing itself with extraordinary speed as a regional power that will determine the fate of both countries. There are growing fears across the Middle East that no regional military can slow the group’s momentum.

Isis now controls a swath of land slightly larger than the UK, from Aleppo to central Iraq, and holds sway over a population of at least four million people. The group’s rapid ability to organise and consolidate continues to splinter a fractured body politic in Iraq and Syria and is fast causing ramifications for the broader Middle East.

"The Islamic State is now the most capable military power in the Middle East outside Israel," a senior regional diplomat said on Friday. "They can determine outcomes in a few days that the Syrian rebels took two years to influence. Their capacity is in sharp contrast to the Syrian regime, which is only able to fight one battle at a time and has to fight hard for every success.

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As South Africa Reels From Unexpected Bailout, One Bank Has A Modest Proposal: Give Us Your Gold
Submitted by Tyler Durden on 08/22/2014 13:57 -0400

In a historic first, three days ago, South Africa’s Rand Merchant Bank, a division of FirstRand Bank Limited, announced it would issue the FirstRand Gold Bond, or a bond denominated in South African Krugerrand gold coins. In other words, for the first time "holding" gold will pay a dividend (or in this case, interest). Sound odd? Maybe because it is.

Here is the statement from the Johannesburg Stock Exchange:

The Gold Bond has a term of five years and the first issue amounts to R2 billion. It requires investors to buy Krugerrands, which they then lend to FirstRand when purchasing the bond. At its expiry the value of the bond is determined by the current gold price, the Dollar/Rand exchange rate and the interest earned. This interest is calculated in terms of ounces of gold as represented by Krugerrands. Investors may take physical delivery of the Krugerrands on maturity or opt to get settled in cash.

Or they may end up with nothing if the bank is "suddenly" found to be insolvent. The marketing pitch is clear: have your gold and collect interest on it:

"The notes provide direct exposure to the rand gold price and a positive yield in the form of interest ounces payable on maturity. It offers both inflation and rand/dollar exchange rate protection while avoiding the significant storage and administration costs associated with other direct gold investment options available. Current market conditions are particularly attractive for gold investment because of rand/dollar weakness and expectations of higher inflation," says RMB Debt Capital Markets co-head Dale Wood.

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Washington’s Nightmare Comes True: The Russian-Chinese Strategic Partnership Goes Global (II)
Fri, Aug 22, 2014
By Andrew KORYBKO (USA)

PART II: Geopolitical Application

It is now time to segue into the geopolitical applications of the RCSP. This section will begin with Northeast Asia and then proceed counterclockwise into exploring the dual approaches towards Central Asia, South Asia, and Southeast Asia. It will then move on to Europe before looking at the Mideast/North Africa (MENA) and Latin America. It is only in Africa where the RCSP has yet to mature, although the possibilities most certainly are there for China to invite Russia’s balancing influence into the continent in the future and to influence regional leaders to expand their trade ties with Moscow. Finally, the conclusion will unify the article and demonstrate that the RCSP is truly the most important relationship of the 21st century and the definitive vehicle for multipolarity.

The reader is recommended to keep the following in mind while perusing this section: Each hand of the RCSP is intended to wash the other and complement its counterpart in regions/states where it may be at a relative disadvantage vis-à-vis its partner, with the end-game intent of establishing true global multipolarity. With that being stated, the geopolitical examination of the RCSP begins.

Northeast Asia

The essence of the RCSP in Northeast Asia is to carefully confront the US’ “unsinkable aircraft carrier” and neutralize its lethality. Both Russia and China had existing territorial disputes with Japan prior to the commencement of the RCSP, but Japan did not begin to aggravate these tensions until the early 2010s. The Japanese problem could more accurately be viewed as an American problem due to its occupation of and mutual security with the country, so via proxy, the RCSP is effectively faced with the hurdle of American obstruction over the process of Northeast Asian pacification. Tokyo always has the ‘opt-out clause’ of a normalization of ties with Moscow (which is in the national interests of both actors), but this does not seem to be on the horizon under Abe’s administration. The US occupation is too strong and influential for the country to break free in the near future, but should a stroke of luck occur breakout and movement towards true foreign policy independence transpire, it would place Moscow in a position to play a positive role in moderating Tokyo’s actions towards Beijing.

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Guest post: French, Swiss central banks swell rush to hold renminbi
Aug 20, 2014 3:58pm
By Jukka Pihlman, Standard Chartered

Adopted at pace by central banks around the world, China’s renminbi is now seen by many as a de facto reserve currency – and well on the way to becoming an official one.

Central banks have caught the renminbi fever, and are showing strong interest in investing part of their foreign-currency reserves in the Chinese currency, with more than 50 central banks now actively doing so either onshore or offshore.

Uptake is strongest in Asia, Africa and South America – regions with fast-growing trade and investment links with China – but even in Europe central banks are busy allocating reserves to the renminbi.

Earlier this year, Banque de France announced it is active in the renminbi market, and in July the Swiss National Bank received a Rmb15bn investment quota from the People’s Bank of China (PBOC), the Chinese central bank. The actions of these two large and sophisticated players are likely to reverberate in the European central-bank community, sparking others to follow.

The allocation shift by central banks is all the more remarkable, given that the renminbi does not yet qualify for official reserve-currency status. It is a powerful indicator of the great expectations in the renminbi as the currency continues on its path towards internationalisation.

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Fracking Possible Cause of 20 Earthquakes in Oklahoma in One Day

MOSCOW, August 22 (RIA Novosti) – The Oklahoma Geological Survey (OGS) recorded 20 earthquakes in the state in a single day following an increase in hydraulic fracturing, or fracking, Think Progress reports.

OGS noted that 18 of the 20 earthquakes on Tuesday were below magnitudes of 3.0, but the largest registered was a 4.3 near Guthrie, where over 10,000 people live. The fracking practice that Think Progress names as a potential cause of the earthquakes is not the fuel extraction itself, but a process called “wastewater injection,” in which leftover water used to frack wells is injected into the ground, potentially adding stress to existing fault lines.

Five more earthquakes have already occurred in Oklahoma since Tuesday, three of which registered above the 3.0 mark on the Richter scale, Think Progress reported.

Some 2,500 earthquakes have occurred in Oklahoma over the past five years, the United States Geological Survey (USGS) claims.

Prior to 2008, Oklahoma recorded an average of one earthquake per year. Since the expansion of fracking operations, Oklahoma has become the most seismically-active state in the United States, with hundreds of earthquakes registered per year, Ring of Fire Radio said.

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Former top general calls on Obama to wipe out Isis in wake of Foley killing
John Allen, who commanded Afghanistan war, writes op-ed amid varying US views on how to respond to journalist’s beheading
Spencer Ackerman in New York and Dan Roberts in Washington
The Guardian, Wednesday 20 August 2014

An influential retired US general has called on Barack Obama to order the destruction the militant group responsible for murdering American journalist James Foley amid conflicting views in the administration on how to respond to the atrocity.

As Obama’s foreign policy team debates expanding its renewed air war in Iraq after the killing of Foley by the Islamic State (Isis), John Allen, a retired marine general who commanded the Afghanistan war from 2011 to 2013, urged Obama to “move quickly to pressure its entire ‘nervous system’, break it up, and destroy its pieces.”

Allen’s argument, presented in an op-ed for the DefenseOne website, echoes remarks by secretary of state John Kerry and comes amid internal dispute in the Obama administration over the future course of its two-week air war in Iraq. Much diplomatic effort is said to be spent broadening and hardening a region-wide effort against Isis, something Allen endorsed, with Turkey and Qatar being a particular near-term focus for Kerry.

The debate is said to be fluid. At present, a US official anticipated more continuity than change in future military operations against Isis, but said: “It may ultimately evolve.”

On Wednesday, six new airstrikes continued to hit Isis positions near the Mosul Dam, three days after Obama declared that it was no longer under Isis control. Nearly two-thirds of the 90 US strikes since 8 August have taken place near the critical dam.

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Car Repos Soar 70% As Auto Subprime Bubble Pops; "It’s Contained" Promises Fed
Submitted by Tyler Durden on 08/20/2014 23:00 -0400

While on the surface the US economy has been chugging along from GDP-crashing "snow in the winter" to GDP-cratering "warmer|cooler than expected weather in the spring|summer|fall", with bouts of GDP-boosting inventory accumulation inbetween, in recent months two very disturbing trends about that all important dynamo behind the economy, the US consumer, have emerged.

On one hand we wrote three weeks ago that a "shocking" 77 million, or one third, of Americans face debt collectors: a statistic which crushes any suggestion that US household credit is substantially improving based on trends in 30, 60, or 90-day delinquency, as it means that the real pain is not at the near-end of the default/delinquency timetable, but the far end, which incidentally has just as dire an impact on one’s credit score as a plain vanilla default (and explains why none other than Fair Issac has jumped in to "adjust" its credit methodology to artificially boost FICO scores of these millions of Americans).

On the other hand, we have been closely following the ongoing deterioration of the car subprime loan bubble: something that both Bloomberg and the Fed have both also been paying close attention to recently, yet a bubble which nobody wants to burst, because as we wrote several days ago, it is none other than the subprime car loan bubble that allowed car production to surge the most last month since Obama’s Cash for Clunkers capital misallocation program, in the process lifting overall manufacturing and Industrial Production, and thus GDP.

Earlier today Experian released its latest, Q2, metrics that tie these two very worrying trends together, namely the trend in delinquencies, defaults and repossessions.

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Chair Janet Yellen says economy still needs Fed support
Investors had been anticipating any firmer sign regarding an interest rate increase in a speech Friday by Federal Reserve head Janet Yellen; she instead offered further uncertainty.
By MARTIN CRUTSINGER MATTHEW BROWN
The Associated Press

JACKSON HOLE, Wyoming — If anyone thought Janet Yellen might clarify her view of the U.S. job market in her speech here Friday, the Federal Reserve chair had a message:

The picture is still hazy.

Though the unemployment rate has steadily dropped, Yellen suggested that other gauges of the job market have become harder to assess and may reflect persistent weakness. These include many people jobless for more than six months, millions working part time who want full-time jobs and weak pay growth.

Yellen offered no clarity on the timing of the first interest-rate increase, which most economists still expect by mid-2015.

Investors had been anticipating any firmer sign from Yellen about whether an improving economy might prompt the Fed to act sooner than expected to start raising rates. She instead offered further uncertainty.

Damage inflicted by the Great Recession had complicated the Fed’s ability to assess the U.S. job market and made it harder to determine when to adjust rates, Yellen said.

“Uncertainty is the key word,” said Ian Shepherdson, chief economist at Pantheon Economics. “Yellen is not about to leap from the fence at the next (Fed) meeting.”

Yellen said that for now, a broad assessment of the job market suggests that the economy still needs Fed support in the form of ultra-low rates and that inflation has yet to become a concern.

“The assessment of labor-market slack is rarely simple and has been especially challenging recently,” Yellen said at the conference, which the Federal Reserve Bank of Kansas City sponsors each year at a lodge beside the Grand Tetons.

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Jim Sinclair’s Commentary

There is no practical solution to the corner the Fed has painted itself into.

The Perils of the Federal Reserve’s Dual Mission: The Fed has its hands full with monetary policy, even if it backs off its fruitless efforts to improve the job market
Richard Epstein Contributor
8/22/2014 @ 7:26PM

I have just signed on with Forbes to write a regular column of issues relating to finance and regulation.  The larger area (like so many others) is in turmoil today, and I hope to cast a steely-eyed view on a set of continuing problems that as yet have resisted in rational solution.  It is always good news for a budding columnist to enter the market when the world is in a state of genuine disarray, for the sorry state of public affairs increases the opportunity for constructive criticism. I hope to that my own increasing involvement in the area, coupled with a general background in both law and economics and constitutional law could add a new blood to a troubled field.

The Grim Scene

It is no coincidence, I might add that the financial wizards at the Federal Reserve are meeting right now in Jackson Hole, Wyoming to thrash out a collective response to a lackluster economic scene.  Unfortunately, the only point of agreement among the cognoscenti is that the view outside their window is a lot nicer than their consensus view on the state of the economy.  In her remarks, Chairwoman Janet Yellin kept all her options open on the ever more urgent question of whether, and if so when, the Fed will start to move to raise interest rates.

She has good reason to be cautious, even if her caution reveals how little she knows about what to do, and not how much.  Right now, a prolonged soulless recovery from the recession limps along in states of disarray as overall levels of job growth and economic remain tepid. The constant effort to jump start the economy may not have created any short-term inflation, which is all to the good.  But by the same token, it has not created any economic growth either, which is all to the bad.  The halting nature of the recovery is all too evident in the United States, but the international club of chronic slow growers hardly rates an exclusive membership list.

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obama 3 branches

Yellen says job market makes Fed hesitant on interest rate increase
MARTIN CRUTSINGER
August 22, 2014 at 10:04 pm

Washington — Federal Reserve Chair Janet Yellen said Friday that the Great Recession complicated the Fed’s ability to assess the U.S. job market and made it harder to determine when to adjust interest rates.

Yellen’s remarks to an annual Fed conference offered no signal that she’s altered her view that the economy still needs Fed support from ultra-low interest rates. The timing of a Fed rate increase remains unclear, though many economists foresee an increase by mid-2015.

The Fed chair noted that while the unemployment rate has steadily declined, other gauges of the job market have been harder to evaluate and may reflect continued weakness. These include high levels of people who have been unemployed for more than six months, many people working part time who would like full-time jobs and weak pay growth.

Yellen repeated language the Fed has used at its last meeting that record-low short-term rates will likely remain appropriate for a “considerable time” after the Fed stops buying bonds to keep long-term rates down. The Fed’s bond buying is set to end this fall.

But Yellen said the Fed’s rate decisions will be dictated by how the economy performs.

“Monetary policy is not on a preset course,” she said. The Fed “will be closely monitoring incoming information on the labor market and inflation in determining the appropriate stance of monetary policy.”

More…

Posted at 1:01 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Here is something for you, a dog selfie. (courtesy of Daily Mail). Hope you are better soon.

Congratulation on the new member of your family.

CIGA Margaret

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Jim,

These kinds of incidents create opportunities for something really bad to happen.

CIGA Larry

Pentagon says Chinese Jet Carried Out ‘Aggressive’ and ‘Dangerous’ Intercept of Navy Intelligence Jet
Su-27 flew within 20 feet of P-8 anti-submarine warfare jet in South China Sea
BY: Bill Gertz
August 21, 2014 6:45 pm

The Pentagon on Friday called a Chinese jet’s encounter with a U.S. anti-submarine warfare aircraft an “aggressive” and “dangerous” act and said it has protested the action with Beijing.

Pentagon Press Secretary Rear Adm. John Kirby told reporters that the incident took place Tuesday in international airspace.

“We have registered our strong concerns to the Chinese about the unsafe and unprofessional intercept, which posed a risk to the safety and the well-being of the air crew and was inconsistent with customary international law,” Kirby said, adding that the incident was “very, very close, very dangerous.”

More…

Posted at 2:18 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Jim has injured his hand and will be taking a few days off responding to emails to help with the recovery. He will reply as soon as he is able to do so.

JSMineset Editor

Posted at 9:54 AM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

So far, nothing is stopping the angry citizens.

U.S. police come under gunfire, arrest 31 in Missouri racial unrest
BY SCOTT MALONE AND ELLEN WULFHORST
FERGUSON Mo. Tue Aug 19, 2014 9:21am EDT

(Reuters) – U.S. police said early on Tuesday they came under heavy gunfire and arrested 31 people during another night of racially charged protests in Ferguson, Missouri, sparked by the fatal shooting of an unarmed black teenager by a white policeman 10 days ago.

Demonstrations, mostly peaceful but with spasms of violence by smaller groups, have flared since Michael Brown, 18, was shot dead while walking down a residential street on August 9.

State Highway Patrol Captain Ron Johnson, briefing reporters on Monday’s night’s violence, said "our officers came under heavy gunfire" in one area.

"Not a single bullet was fired by officers despite coming under heavy attack," he told a news conference. Riot police had confiscated two guns from protesters and what looked like a petrol bomb. Four officers had been injured.

Johnson separately told CNN that two people were shot within the crowd, but not by police, and were taken to hospital. There was no immediate word on their condition.

The violence has captured headlines around the world, raising questions about the state of U.S. race relations nearly six years after Americans elected their first black president.

"This has to stop. I don’t want anybody to get hurt. We have to find a way to stop this," said Johnson, an African-American who grew up in the area and who took over security efforts after the mostly white local force was accused of using excessive force against blacks.

More…

Housing Permits, Starts Surge Driven By Renewed Rental Housing Scramble
Tyler Durden on 08/19/2014 08:59 -0400

After June’s very disappointing housing starts and permits numbers, which plunged to 893K and 963K respectively well below consensus expectations, it was time for the Department of HUD to show how it’s done, and moments ago the July housing starts and permits data literally blew away Wall Street expectations, as Starts soared from an upward revised 945K to 1093K, the highest print since November 2013, while permits surged from an also upward revised 973K to 1052K, smashing expectations of 1000K and the biggest beat since October.

Starts:

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And Permits:

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So is this the housing recovery everyone’s been waiting for? Sadly, no, because one glance at the internals reveals that virtually all of the surge higher was on the back of multi-family housing units. Specifically, in permits, virtually all of the rise was due to multi-family, aka rental, unit construction, which soared by 73K, from 309K to 382K, a 24% increase, while single family, residential, units were up by a tiny 6K, or less than 1%.

More…

China allows 3 more banks including StanChart to import gold -sources
By A. Ananthalakshmi and Fayen Wong
SINGAPORE/SHANGHAI Tue Aug 19, 2014 9:08am BST

(Reuters) – China has allowed three more banks, including a foreign lender, to import gold, sources with direct knowledge of the matter said, as the world’s top gold buyer gears up for its strongest effort yet to gain pricing power of the metal.

The move, which brings the number of firms allowed to import gold into China to 15, comes ahead of the launch in September of a new international bullion exchange in Shanghai with which China hopes to become a price-discovery centre.

China and other Asian gold trading centres such as Singapore are calling for more localised pricing of the precious metal as they seek alternatives to the so-called London fix, the global benchmark for spot gold prices, which is being investigated by regulators on suspicion that it may have been manipulated.

Standard Chartered (STAN.L), Shanghai Pudong Development Bank (600000.SS) and China Merchants Bank (600036.SS) were given regulatory approval recently to import gold, five sources with direct knowledge of the matter told Reuters.

"We were given the license earlier this month. We haven’t started importing yet but we will soon," said a source at one of the three banks, speaking on condition of anonymity as the news has not yet been publicly announced.

More…

East Asia Geared Up For RMB Gold Trading
Published: 18-08-2014 22:57

Weekly withdrawals from the Shanghai Gold Exchange (SGE), which equals Chinese wholesale demand, have been nearly flat for four weeks in a row. 33 metric tonnes have been withdrawn in week 32 (August 4 – 8), up a modest 4.2 % w/w. Year to date 1,127 tonnes have been withdrawn, annualized 1,831 tonnes.

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Gold premiums also remained flat, around zero.

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The total volume of gold contracts traded on the SGE during week 32, including the Chinese OTC market, was 131 tonnes. On the Shanghai Futures Exchange (SHFE) the traded volume was 365 tonnes, added to the SGE volume makes 496 tonnes (counted unilaterally). 

More…

Posted at 10:27 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

This is very good news for gold long term.

Shanghai Gold Exchange Said to Plan FTZ Contract for Sept
By Bloomberg News Aug 18, 2014 2:00 AM MT

The Shanghai Gold Exchange plans to start bullion trading in the city’s free-trade zone on Sept. 26, according to three people with knowledge of the matter.

The people asked not to be identified because they aren’t authorized to speak to the media. Gu Wenshuo, a spokesman for the exchange, confirmed that the trading system is being tested, without giving further details.

Shanghai wants to become a regional bullion-trading hub, giving foreigners access to the world’s largest physical-gold market, Xu Luode, the exchange’s chairman, told a conference in Singapore in June.

The gold contract will be priced and settled in yuan and the infrastructure is in place for trading to start in the third quarter, Xu said in June. The zone will have a vault capable of holding 1,500 metric tons of gold, which can either be imported into China or be in transit to other markets, Xu said.

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Jim Sinclair’s Commentary

Mr. Dude takes an August afternoon nap.

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Ron Paul’s Texas Straight Talk 8/18/14: What Have We Accomplished in Iraq?

Poroshenko expands police powers
Special means and firearms now can be used without warning

Ukrainian President Petro Poroshenko signed a law Aug. 18 that expands the powers of police in what the country calls the anti-terrorist operation (ATO).

“The document gives the right to law enforcers to apply without warning measures of physical effect, special means and firearms against persons who are recognized terrorists under the Law of Ukraine [called] ‘On [the] struggle against terrorism,’” a presidential statement said.

The law is intended to increase the safety level of law enforcers in the course the ATO and facilitate “more efficient fulfillment of tasks on neutralization of terrorists,” according to the president’s statement.

Poroshenko also spoke with US Vice President Joseph Biden on Aug. 16 regarding aid shipments. Poroshenko said Ukrainian humanitarian assistance had already been delivered to the International Committee for the Red Cross (ICRC), but that safe passage had still not been secured from the separatists for the delivery of Russian aid, according to the White House.

“The two leaders agreed that Russia’s sending military columns across the border into Ukraine and its continued provision of advanced weapons to the separatists was inconsistent with any desire to improve the humanitarian situation in eastern Ukraine. Both leaders reaffirmed their support for a diplomatic resolution to the crisis and called on Russia to enter into good faith negotiations,” the White House statement said.

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August 18, 2014 
Spoleto, Italy

The sniper took a breath in as he put the fleeing form of Peter Fechter into the crosshairs of his rifle.

As he exhaled, he squeezed the trigger, landing his bullet squarely in the young boy’s back.

Watching Peter’s body fall, he mentally congratulated himself on what he’d just done to protect his nation.

It was just after 2pm, August 17, 1962 when Peter’s body hit the ground at the foot of the Berlin Wall.

There he lay in broad daylight for a full 50 minutes, screaming for help, before he was finally carted away.

What had Peter Fechter done to threaten the nation and deserve this public execution?

Nothing at all.

The boy was just an 18-year-old bricklayer, who wanted a chance at freedom, when he became the first person to die trying to escape over the Wall.

52 years later, the same things are still happening, and not in totalitarian East Germany, but right in the United States itself.

This time, the 18-year-old victim’s name was Michael Brown, an unarmed hospital worker, who was gunned down by police on the streets of Ferguson, Missouri.

After both young casualties, people were incited to protest in anger against the brutality of the state, and in both cases, the people had tear gas rained down upon them.

Who could possibly still believe that the police are there to protect and serve the people?

No matter the justifications they came up with, it’s was suddenly clear that the Wall was built to keep people in, not to keep others out.

Just the same, the police today are not there to keep you safe from criminals, but to keep the biggest criminals—the politicians—safe from you.

Though on the surface the current protests in Ferguson are about race, they reveal a much deeper truth about the situation. As they protest, the people are following their instincts, and their instincts are telling them not to trust the state.

We’re seeing people’s trust in the state beginning to crumble, not just with police, but with one government agency after another. More and more people are waking up to the fact that none of these institutions are really there to protect them.

The NSA says it’s there to keep you safe from terrorists, but in reality they’re spying on you to protect their power over the populace.

The Fed says it’s there to make the economy more stable, but they intentionally fuel economic volatility in ways that benefit their friends.

The FDA says it’s there to protect people from unsafe foods, but their regulations and endorsements of certain ingredients actually make your food more dangerous.

There’s an invisible wall going up around us, everywhere in Western civilization. People are starting to realize it and that’s why there’s so much anger. But rather than getting angry or emotional, it’s time to get ready.

Rational people have a plan B.

Because if you wait too long, you’ll wake up one day and see that the Wall has been built, and suddenly stands far greater than your ability to escape it unscathed.

Until tomorrow,

Simon Black 
Senior Editor, SovereignMan.com

Ferguson: Missouri national guard to be deployed
Announcement follows most intense violence since shooting of Michael Brown, with police firing teargas at protesters hours before curfew
Jon Swaine and Rory Carroll in Ferguson
The Guardian, Monday 18 August 2014 14.59 BST

The national guard in Missouri is to be deployed to the city of Ferguson after the most intense night of violence since the shooting of an unarmed 18-year-old, in which police used teargas against protesters hours before a midnight curfew came into effect.

Missouri’s governor, Jay Nixon, announced in the early hours of Monday that he had signed an executive order directing national guard troops to protect the northern suburb of St Louis from “deliberate, coordinated and intensifying violent attacks on lives and property in Ferguson.

“These violent acts are a disservice to the family of Michael Brown and his memory, and to the people of this community who yearn for justice to be served, and to feel safe in their own homes.”

The escalation in the crisis came after the eighth night of unrest since Brown was killed by a police officer, Darren Wilson, in disputed circumstances on 9 August. An autopsy released as the clashes raged concluded that Brown was shot six times, including twice in the head.

Bouts of gunfire rang out around Ferguson throughout Sunday night and early Monday morning. Three people were injured and a series of shops and restaurants were vandalised and looted. Heavily armed police repeatedly fired teargas and rubber bullets during running battles with the crowds. Several people were arrested for failing to disperse and journalists were detained and threatened by police with guns.

More…

 

The Coming Race War Won’t Be About Race
Kareem Abdul-Jabbar
Aug. 17, 2014

Ferguson is not just about systemic racism — it’s about class warfare and how America’s poor are held back, says Kareem Abdul-Jabbar

Will the recent rioting in Ferguson, Missouri, be a tipping point in the struggle against racial injustice, or will it be a minor footnote in some future grad student’s thesis on Civil Unrest in the Early Twenty-First Century?

The answer can be found in May of 1970.

You probably have heard of the Kent State shootings: on May 4, 1970, the Ohio National Guard opened fire on student protesters at Kent State University. During those 13 seconds of gunfire, four students were killed and nine were wounded, one of whom was permanently paralyzed. The shock and outcry resulted in a nationwide strike of 4 million students that closed more than 450 campuses. Five days after the shooting, 100,000 protestors gathered in Washington, D.C. And the nation’s youth was energetically mobilized to end the Vietnam War, racism, sexism, and mindless faith in the political establishment.

You probably haven’t heard of the Jackson State shootings.

On May 14th, 10 days after Kent State ignited the nation, at the predominantly black Jackson State University in Mississippi, police killed two black students (one a high school senior, the other the father of an 18-month-old baby) with shotguns and wounded twelve others.

There was no national outcry. The nation was not mobilized to do anything. That heartless leviathan we call History swallowed that event whole, erasing it from the national memory.

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What Have We Accomplished in Iraq?
written by ron paul
sunday august 17, 2014

We have been at war with Iraq for 24 years, starting with Operations Desert Shield and Storm in 1990. Shortly after Iraq’s invasion of Kuwait that year, the propaganda machine began agitating for a US attack on Iraq. We all remember the appearance before Congress of a young Kuwaiti woman claiming that the Iraqis were ripping Kuwaiti babies from incubators. The woman turned out to be the daughter of the Kuwaiti ambassador to the US and the story was false, but it was enough to turn US opposition in favor of an attack.

This month, yet another US president – the fourth in a row – began bombing Iraq. He is also placing US troops on the ground despite promising not to do so.

The second Iraq war in 2003 cost the US some two trillion dollars. According to estimates, more than one million deaths have occurred as a result of that war. Millions of tons of US bombs have fallen in Iraq almost steadily since 1991.

What have we accomplished? Where are we now, 24 years later? We are back where we started, at war in Iraq!

The US overthrew Saddam Hussein in the second Iraq war and put into place a puppet, Nouri al-Maliki. But after eight years, last week the US engineered a coup against Maliki to put in place yet another puppet. The US accused Maliki of misrule and divisiveness, but what really irritated the US government was his 2011 refusal to grant immunity to the thousands of US troops that Obama wanted to keep in the country.

Early this year, a radical Islamist group, ISIS, began taking over territory in Iraq, starting with Fallujah. The organization had been operating in Syria, strengthened by US support for the overthrow of the Syrian government. ISIS obtained a broad array of sophisticated US weapons in Syria, very often capturing them from other US-approved opposition groups. Some claim that lax screening criteria allowed some ISIS fighters to even participate in secret CIA training camps in Jordan and Turkey.

This month, ISIS became the target of a new US bombing campaign in Iraq. The pretext for the latest US attack was the plight of a religious minority in the Kurdish region currently under ISIS attack. The US government and media warned that up to 100,000 from this group, including some 40,000 stranded on a mountain, could be slaughtered if the US did not intervene at once. Americans unfortunately once again fell for this propaganda and US bombs began to fall. Last week, however, it was determined that only about 2,000 were on the mountain and many of them had been living there for years! They didn’t want to be rescued!

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Russia: no ceasefire agreed but Kiev’s objections to relief convoy dropped
Sergei Lavrov says talks with Ukraine failed to agree ceasefire but questions over Russian mission have been removed

Russia’s foreign minister has said that talks with Ukraine have failed to agree a ceasefire but all objections to a Russian humanitarian convoy entering the country have now been dropped.

Sergei Lavrov said on Monday that "all questions" regarding the mission had been removed and agreement had been reached with Ukraine and the International Committee of the Red Cross (ICRC), but it was unclear if he was referring to security guarantees, which the ICRC wants to receive from all sides including pro-Russia rebel fighters, before accompanying more than 200 trucks into Ukraine.

An ICRC spokeswoman in the region where the trucks were parked said earlier it was still waiting for the security guarantees.

The convoy has been parked for days in Russia near the border amid objections from Kiev, which believes the convoy could be a Trojan horse for Russia to get weapons to the rebels – a notion that Moscow has dismissed as absurd.

Lavrov met late on Sunday in Berlin with counterparts from Ukraine, France and Germany; the talks concluded with agreement for the four to meet again.

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US bombers help Kurds retake dam as Obama writes to Congress
Military reports two waves of attacks around Mosul dam
Kurds say they have retaken the strategically important facility
President: operations ‘limited in scope and duration’
Martin Pengelly in New York and agencies
theguardian.com, Sunday 17 August 2014 23.24 BST

The US on Sunday launched two waves of air strikes against Islamic State (Isis) militants in northern Iraq, in the most extensive American military operations in the country since the withdrawal of ground troops in 2011.

The strikes helped Kurdish peshmerga fighters to regain control of the strategically important Mosul dam captured by militants two weeks ago.

“Mosul Dam was liberated completely,” Ali Awni, an official from Iraq’s main Kurdish party, told AFP, a statement confirmed by two other Kurdish sources.

Early in the day US aircraft, for the first time including land-based bombers, carried out 14 strikes. Later, US Central Command confirmed further strikes had been carried out by “fighter and attack aircraft”.

In a letter to Congress, outlining the rationale and justification for the strikes, Obama said the integrity of the dam was crucial to the security of the US embassy in Baghdad. The US has consistently cited the security of US personnel in Baghdad as cover for its military operation to support the Kurds.

Sunday’s first strikes were the first time that bombers as well as fighter jets and drones had been involved in the current air campaign, which began on 8 August alongside drops of humanitarian aid to Yazidi refugees marooned on Mount Sinjar.

More…

Ukraine officially recognizes Russian aid convoy as humanitarian
Published time: August 16, 2014 21:28 
Edited time: August 17, 2014 10:43

Ukraine Minister of Social Policy Lyudmila Denisova has signed an order officially recognizing the Russian convoy stuck at the border as humanitarian aid cargo of the International Committee of the Red Cross.

"In accordance with Articles 4 and 5 of the Law of Ukraine ‘On Humanitarian Aid’ considering the initiative of the President of Ukraine Petro Poroshenko on receiving humanitarian aid within the framework of international humanitarian missions under the auspices of the International Committee of the Red Cross (ICRC) to recognize the cargo as humanitarian aid,” the document reads.

Russian and Ukrainian officials have agreed on Sunday to proceed with the inspection of the first group of 16 Russian trucks of the humanitarian convoy, the International Committee of the Red Cross (ICRC) said.

The ICRC will be supervising the delivery of the aid and will go ahead after it receives security guarantees from the warring sides in Ukraine.

More…

Next time?
Bill Holter for Miles Franklin

Around mid morning on Friday we heard news that the Ukraine had "destroyed part of a Russian convoy".  The stock market immediately dropped nearly 200 points, Treasury bonds were bid 10 basis points lower, oil was higher and gold which had been hammered $20 lower earlier ran back to unchanged.  I do want to mention that "the sale" which knocked gold down was some $2 billion worth of COMEX futures.  $2 billion, this would amount to a little more than 1 week’s production from ALL mines in the ENTIRE world.  Again, "who" would ever sell their product in this fashion where they receive THE worst price of the week?  The real laugher is that this was not even "gold" which was sold, the sale was merely COMEX futures.  This game however will shortly end as the Shanghai exchange comes on line which will be a 100% physical exchange.  China has a history of meting out harsh and should I say "physical" penalties for financial crimes, selling something that does not exist would fall into this category.  This further display of naked short selling is not what I’d like to write about today.

  The "announcement" of the destruction of a Russian convoy had all the makings of being the spark for WWIII.  As soon as I heard the "news" and saw the markets react, my first thought was "this is the beginning".  Were it true, the situation would have already escalated in every fashion.  The escalation would have certainly been militarily but also financially.  What the heck really happened though?  Anything?  Here it is more than a day(s) later and what do we really know?  Was there a Russian convoy destroyed?  Was there even a Russian convoy on Ukrainian soil?  Was anything at all destroyed?  The Telegraph put this article out Friday eveninghttp://www.telegraph.co.uk/news/worldnews/europe/ukraine/11038156/Ukraine-destroys-parts-of-convoy-of-Russian-military-vehicles.html , the headline clearly states "Ukraine destroys part of Russian military convoy".

  First, two British journalist "saw firsthand" the military convoy cross the border.  Do we have any pictures?  Did they not have cameras with them?  This is possible but not probable, but surely they had cellphones right?  So where are the pictures?  I haven’t even seen any pictures showing destroyed vehicles in the light of day after the alleged attack.  Russia denies having any vehicles on Ukraine soil nor having anything destroyed.  Yet the president of Ukraine himself swears to it?  What really happened if anything?  Zerohedge even speculated the Ukraine may have even fired on their own units.

  I have to ask again just as I did after the Malaysian airliner was brought down last month, where are the satellite images?  Russia says they don’t have any because there are none, the White House tweeted "can’t confirm convoy destroyed".  Who is going to come forward with proof one way or another as to what happened?  Was this just another false flag to start war which went sour and failed?  I hope you understand just how serious this is.

  Sadly, I will give you my opinion on what "is happening".  Some who read what I am about to write and will say I am "un patriotic" or "un American".  This couldn’t be further from the truth.  After watching the U.S. "back" tyrants in various countries and support the coups of "puppets gone bad" who would no longer do our bidding, I can only say we are wrongheaded and dangerous.  In my opinion, Washington is doing anything and everything possible to start a war.  This war of course will end up being against the interests of China and Russia.  Is this war "winnable"?  No it is not and the danger is we end up in a nuclear conflict.

  But why?  Why does it seem the U.S. is hell bent on war?  There are several reasons all of which turn back to the U.S. dollar itself and the power involved in issuing the reserve currency.  First, it is my opinion that Washington knows the game is about over.  The economy has not and cannot be kick started because there is too much debt weighing it down.  I also believe we are at the end of the road where it comes to keeping a lid on gold and silver, I believe the metal to deliver has just about run out.  I also believe the realization that there is very little good collateral left to be lent or borrowed against has sunk in.  Even outright lies about economic numbers are no longer supporting confidence which is waning.  Remember, "confidence" is what holds up fiat money.  It is the failure of confidence that Washington is trying to hide or misdirect your attention from.

  It is my opinion that we have come to the point where a scapegoat is needed and dirty tracks must be covered.  The dollar system is a Ponzi scheme which cannot just fall apart on its own without having something to point at as the "cause".  The thought process I am sure is if a war is started and "we win", the dollar can then be "forced" upon the world.  If we lose?  This will be pointed to as the reason the economy is in shambles, the markets collapsed, your bank closed and your dollars cratered in purchasing power.  Never mind the fact we ran wild deficits, printed money and have done everything that history has shown us was imprudent and reckless.  A war will (they hope) act as a distraction from the financial chaos.  I believe the thinking here is the public will be so involved with their own problems that the perpetrators of the grand fraud might get a pass.  Whether this would/will work or not is another question.

  It is my opinion the world knows all of the above and is in the process of isolating the U.S..  Our actions to start a war have eaten away at the trust in our currency.  "Trust" was all we had left and we have lived off of it for years.  It seems the more we lost it, the more we "pressed" to keep it using bullying tactics which only served to eat further away at the remaining trust.  As I wrote last week, we are "kicking the table over" because there are no other options.  Starting a war will do this.

The above was written over the weekend.  Here we are Monday morning and "it never happened".  Nothing happened so please move along and just forget about it!  Actually, Friday’s news has already been completely forgotten.  What you should not forget personally is the fact that you were given "news" on Friday which was completely false.  What will you believe "next time"?  There will be a next time, you can count on it.  There unfortunately will be "next time’s" until one gets the desired end which results in the war called for by the script.

Regards,
Bill Holter

Posted at 8:39 PM (CST) by & filed under In The News.

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Obama writes to Congress as Iraq air strikes include bombers for first time
Military reports two waves of attacks around Mosul dam
President: operations ‘limited in scope and duration’
Martin Pengelly in New York and agencies
theguardian.com, Sunday 17 August 2014 23.24 BST

The US on Sunday launched two waves of air strikes against Islamic State (Isis) militants in northern Iraq, in the most extensive American military operations in the country since the withdrawal of ground troops in 2011. The strikes supported an offensive by Kurdish peshmerga fighters which aimed to regain control of the strategically important Mosul dam.

Early in the day US aircraft, for the first time including land-based bombers, carried out 14 strikes. Later, US Central Command confirmed further strikes had been carried out by “fighter and attack aircraft”.

In a letter to Congress, outlining the rationale and justification for the strikes, Obama said the integrity of the dam was crucial to the security of the US embassy in Baghdad. The US has consistently cited the security of US personnel in Baghdad as cover for its military operation to support the Kurds.

Sunday’s first strikes were the first time that bombers as well as fighter jets and drones had been involved in the current air campaign, which began on 8 August alongside drops of humanitarian aid to Yazidi refugees marooned on Mount Sinjar.

A statement from US Central Command said the 14 strikes had been carried out “to support humanitarian efforts in Iraq, and support Iraqi security forces and Kurdish defence forces”. Isis fighters around the dam and the Kurdish capital of Irbil were hit nine times on Saturday.

More…

Ukraine officially recognizes Russian aid convoy as humanitarian
Published time: August 16, 2014 21:28
Edited time: August 17, 2014 10:43

Ukraine Minister of Social Policy Lyudmila Denisova has signed an order officially recognizing the Russian convoy stuck at the border as humanitarian aid cargo of the International Committee of the Red Cross.

"In accordance with Articles 4 and 5 of the Law of Ukraine ‘On Humanitarian Aid’ considering the initiative of the President of Ukraine Petro Poroshenko on receiving humanitarian aid within the framework of international humanitarian missions under the auspices of the International Committee of the Red Cross (ICRC) to recognize the cargo as humanitarian aid,” the document reads.

Russian and Ukrainian officials have agreed on Sunday to proceed with the inspection of the first group of 16 Russian trucks of the humanitarian convoy, the International Committee of the Red Cross (ICRC) said.

The ICRC will be supervising the delivery of the aid and will go ahead after it receives security guarantees from the warring sides in Ukraine.

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With Aid Doctors Gone, Ebola Fight Grows Harder
By SHERI FINKAUG. 16, 2014

When people started dying of Ebola in Liberia, Clarine Vaughn faced a wrenching choice: Should she send home, for their own health and safety, four American doctors working for Heartt, the aid group she led there? Or should she keep them in the country without proper supplies or training to fight the virulent, contagious disease, which was already spreading panic?

After much agonizing, Ms. Vaughn, who lives in Liberia, pulled the doctors out and canceled plans to bring in more. The African physicians and nurses left behind told her they understood, but felt abandoned. They said, “We need you guys here,” she recalled.

Since then, Ms. Vaughn has wondered if the American doctors might have made a difference, and she asked the aid group AmeriCares to help. It sent in a planeload of supplies that landed in Monrovia, the Liberian capital, last Sunday.

The departure of many Western development workers from Guinea, Liberia and Sierra Leone, the West African countries hit hardest by Ebola, has further weakened the region’s understaffed health systems at the very moment they are facing one of the most volatile public health crises ever. Liberia, population four million, has fewer than 250 doctors left in the entire country, according to the Liberia Medical and Dental Council. Seven doctors there have contracted Ebola, and two of them have died.

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Jim Sinclair’s Commentary

Is the city of Ferguson headed your way?

Stop the Pentagon program that militarizes U.S. police forces
By Michael Shank and Elizabeth Beavers
August 14, 2014

There is a growing bipartisan public outrage about the local police force’s fiercely militarized response to protestors in Ferguson, Missouri.

From Democrats to Republicans, progressive to libertarian, citizens across the political spectrum are denouncing the efforts to stop demonstrations over the police killing of Michael Brown, an unarmed, African-American teenager.

Legislators are also speaking out against this militarization of police. Representative Justin Amash (R-Mich.) described the situation as “frightening.” Senator Claire McCaskill (D-Mo.) a moderate, called the police tactics “the problem instead of the solution.” Meanwhile, libertarian Senator Rand Paul (R-Ky.) stated flatly in an op-ed, “We must de-militarize the police.”

Americans have been stunned to see pictures of police driving armored vehicles through neighborhoods, brandishing weapons of war at unarmed citizens.

But this is nothing new. In October 2013, Mine-Resistant Ambush-Protected vehicles (MRAPs) were regularly finding their way from the wars in Afghanistan and Iraq to the Main Streets of America. They were the latest acquisitions in a growing Pentagon practice that’s militarizing America’s municipal police forces.

In that one month, police departments in Boise and Nampa, Idaho, each acquired an MRAP, as did the force in High Springs, Florida. The offer of war-ready machinery, at practically no cost, has proven hard to resist for local police departments. They look increasingly like soldiers equipped for battle.

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Jim Sinclair’s Commentary

Not the best news for the dollar.

U.S. Investment Outflow Hits Record as China Cuts Holdings
By Kasia Klimasinska Aug 15, 2014 8:04 AM MT

The U.S. posted a record cross-border investment outflow in June as China and Japan reduced their holdings of Treasuries and private investors abroad sold bonds and notes.

The total net outflow of long-term U.S. securities and short-term funds such as bank transfers was $153.5 billion, after an inflow of $33.1 billion the previous month, the Treasury Department said in a report today. The June figure, and $40.8 billion in net selling of Treasury bonds and notes by private investors in June, were the largest on record, the Treasury said.

“Right at the beginning of June, you had a very strong sell-off of Treasuries and that’s what frightened a lot of private investors,” Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York, said by phone. “As yields stayed lower in subsequent months, some of the investors probably resumed their buying.”

China’s holdings of U.S. Treasuries declined by $2.5 billion to $1.27 trillion, while Japanese holdings dropped $600 million to $1.22 trillion, according to a Treasury report today.

China and Japan’s combined share of total foreign holdings of Treasuries has declined since 2004. It dropped to 41.4 percent in June from 50.9 percent in August 2004, according to data compiled by Bloomberg.

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In The West Respect for Truth No Longer Exists
Paul Craig Roberts

The Western media have proved for all to see that the Western media comprises either a collection of ignorant and incompetent fools or a whorehouse that sells war for money.

The Western media fell in step with Washington and blamed the downed Malaysian airliner on Russia. No evidence was provided. It its place the media used constant repetition. Washington withheld the evidence that proved that Kiev was responsible. The media’s purpose was not to tell the truth, but to demonize Russia.

Now we have the media story of the armored Russian column that allegedly crossed into Ukraine and was destroyed by Ukraine’s rag-tag forces that ISIS would eliminate in a few minutes. British reporters fabricated this story or were handed it by a CIA operative working to build a war narrative. The disreputable BBC hyped the story without investigating. The German media, including Die Welt, blared the story throughout Germany without concern at the absence of any evidence. Reuters news agency, also with no investigation, spread the story. Readers tell me that CNN has been broadcasting the fake story 24/7. Although I cannot stand to watch it, I suspect Fox “news” has also been riding this lame horse hard. Readers tell me that my former newspaper, The Wall Street Journal, which has fallen so low as to be unreadable, also spread the false story. I hope they are wrong. One hates to see the complete despoliation of one’s former habitat.

The media story is preposterous for a number of reasons that should be obvious to a normal person.

The first reason is that the Russian government has made it completely clear that its purpose is to de-escalate the situation. When other former Russian territories that are part of present day Ukraine followed Crimea, voted their independence and requested reunification with Russia, President Putin refused. To underline his de-escalation, President Putin asked the Russian Duma to rescind his authority to intervene militarily in Ukraine in behalf of the former Russian provinces. As the Russian government, unlike Washington or EU governments, stresses legality and the rule of law, Russian military forces would not be sent into Ukraine prior to the Duma renewing Putin’s authority so to do.

The second reason the story is obviously false is that if the Russian government decides to invade Ukraine, Russia would not send in one small armored group unprotected by air cover or other forces. If Russia invades Ukraine, it will be with a force capable of rolling up the rag-tag Ukrainian forces, most of which are semi-private militias organized by nazis. The “war” would last a few hours, after which Ukraine would be in Russia’s hands where it resided for hundreds of years prior to the dissolution of the Soviet Union and Washington’s successful efforts in 1991 to take advantage of Russian weakness to break apart the constituent provinces of Russia herself.

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Posted at 8:28 PM (CST) by & filed under Jim's Mailbox.

Jim,

The stupidity and ignorance on display with the Germans continuing to fein unhappiness with the Russians and suggesting they are willing to have more sanctions against them is absolutely and completely foolish.

The current sanctions that Germany has against the Russians has boomeranged on Germany and is at least part of the reason for the decline in Germany.

CIGA Larry

End of the Wirtschaftswunder? Germany’s sudden slowdown
By Noah Barkin
BERLIN Fri Aug 15, 2014 6:26am EDT

(Reuters) – The German soccer team’s romp to victory in last month’s World Cup was hailed at home as a symbol of the country’s emergence as a confident global economic power.

But in an ironic twist, the feel-good triumph in Brazil may have come at a time when Germany’s new "Wirtschaftswunder", or economic miracle, is coming to an end.

In recent weeks, the economy that proud German politicians have taken to describing as a "growth locomotive" and "stability anchor" for Europe, has been hit by a barrage of bad news that has surprised even the most ardent Germany skeptics.

The big shocker came on Thursday, when the Federal Statistics Office revealed that gross domestic product (GDP) had contracted by 0.2 percent in the second quarter.

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Jim,

This pullback must have happened because of the weather. I am sure it is the same as the spring pullback that was caused by the snow. I couldn’t possibly mean that the economy is failing.

CIGA Larry

New York Manufacturing Index Indicates Notably Slower Growth In August
8/15/2014 9:51 AM ET

While the Federal Reserve Bank of New York released a report on Friday showing that business conditions for New York manufacturers continued to improve in August, the bank said the improvement was less widespread than in the previous month.

The New York Fed said its general business conditions index dropped to 14.7 in August from 25.6 in July, although a positive reading continues to indicate an increase in regional manufacturing activity. The index has been expected to dip to a reading of 20.0.

The bigger than expected pullback by the general business conditions index came after it reached a four-year high in the previous month.

A slowdown in the pace of new orders growth contributed to the sharp drop by the headline index, with the new order index sliding to 14.1 in August from 18.8 in July.

The report also showed a slowdown in the pace of job growth in the New York manufacturing sector, as the number of employees index fell to 13.6 in August from 17.1 in the previous month.

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Jim,

I’m kind of skeptical of whatever the many "spokesmen" of the Ukrainian government come out with. I can’t help feeling that if they had destroyed even one APC with their incredibly accurate artillery fire (after all they have been practicing on houses and hospitals) there would be pictures all over the web. Haven’t seen any yet.

Regards,
CIGA Jim

Dear Jim,

It is all lies!

Jim