Posted at 10:45 AM (CST) by & filed under In The News.

Moody’s downgrades Ukraine heralding imminent default
Published time: March 25, 2015 10:22

International rating agency Moody’s has downgraded the long-term issuer rating of Ukraine to the second lowest Ca grade from Caa3, leaving the outlook negative and a high possibility of the country’s imminent default.

“Although negotiations over the specific details of the restructuring are only now getting underway, Moody’s believes that the likelihood of a distressed exchange, and hence a default on government debt taking place, is virtually one hundred percent,” Moody’s said in a news release Tuesday.


Jim Sinclair’s Commentary

Things are somewhat different in the Crimea economically and socially.

Crimea’s Growth Fastest in 20 Years Thanks to Russia, Sanctions – Minister
Sputnik/ Artem Zhitenev
12:00 25.03.2015(updated 12:52 25.03.2015)

In an interview with Sputnik, Deputy Chairman of the Council of Ministers of Crimea Dmitry Polonsky explained how the republic won after rejoining Russia, how Western sanctions contributed to its economic development and what the West should focus on.

MOSCOW (Sputnik) – Crimea has been experiencing an upsurge in development following its reunification with Russia thanks to the country’s investment in the republic, Deputy Chairman of the Council of Ministers of Crimea Dmitry Polonsky told Sputnik on Wednesday.

“Crimea has not developed at such a pace as it has in the past year over the past twenty years,” Polonsky said, adding that the Russian government plans to invest almost 700 billion rubles ($12.1 billion) in the republic’s economy under the current social-economic development program, which will run until 2020.

Polonsky, who is Crimea’s Internal Policy, Information and Mass Communications Minister, stressed that during the 23 years prior to the March 2014 independence referendum, Crimea experienced “regression” due to the Ukrainian authorities lack of investment.



Cops can confiscate your cash without charging you with a crime
AOL  March 25, 2015

John Newmerzhycky was traveling down Interstate 80 inIowa with his pal Bart Davis when an Iowa State Trooper pulled them over.

Inside Edition’s Lisa Guerrero asked Newmerzhycky, “Were you obeying all the traffic laws, were you doing the speed limit?”

He replied, “I had the cruise control set. I wasn’t doing anything wrong.” He was pulled over anyway.

The entire stop was recorded on the trooper’s dash cam video. The officer could be heard saying, “If y’all step out here, I’ll write you a warning real quick and get you out of here.”

The officer seemed friendly enough, and gave Newmerzhycky a written warning for failing to signal when changing lanes.

Newmerzhycky thought he would be on his way, but just as he was heading back in his vehicle the officer can be heard asking, “Can I search your car?”

“I don’t see any reason to, no,” Newmerzhycky replied.

The officer asked, “Can I run a K-9 through the car?”

Newmerzhycky answered, “I’d prefer to be on my way. Do I have a right to say no?”

“You do,” the officer responded.


Posted at 9:55 AM (CST) by & filed under Jim's Mailbox.

Dear Jim,

At least Bill White is a realist. He knows when there is no good to come out of unreal attempts to puff up their economy without offering real help for the small and medium sized business that make up the EU.

CIGA Larry


That is exactly why it did not work much here. It is a sweetener for the banks.


"Belief That European QE Will Work Is Far-Fetched," Bill White Warns This Will "End Very Badly"
Submitted by Tyler Durden on 03/24/2015 20:00 -0400

As the title of Hinde Capital’s latest note ascribes, we are on "The Road to Nowhere," and this excellent discussion with former BIS Economic Adviser (and teller-of-the-truth) William White explains it all.. 

"I’m not sure [European QE] is going to do anything – certainly, nothing that’s good. The fundamental problem here, as I see it anyway, is that the European banking system is still broken… I think, increasingly, bankers are discomforted more than anything else (it’s not just the ex central bankers but increasingly the people that are still holding the levers)… they are starting to ask whether they have somehow been backed into a place where they don’t really want to be…. Unfortunately, [it] is getting bigger and bigger. There is a possibility at least that this whole exercise could end very badly."


Via Hinde Capital, The Cobden Centre, and True Sinews…

Max Rangeley: Well, thank you very much for being on the call today, Bill. That’s really great. So I’ve got a few questions here, which I thought we could go through. First, now that QE has started in Europe is this likely to cause further distortions rather than stimulate the economies of Europe, especially will it favour large corporations at the expense of small businesses, do you think?

William White: To be honest, I’m not sure it’s going to do anything – certainly, anything that’s good. The fundamental problem here, as I see it anyway, is that the European banking system is still broken. As you know, the European economy is heavily reliant on small and medium-sized enterprises, and they are reliant in turn on bank financing. Unfortunately, it is these firms that are not getting the bank financing that they need. Until that gets fixed, we will continue to have a huge problem in Europe.


Posted at 1:35 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams of shares the following with us.

- Headline February Real Retail Sales Fell by 0.8% (-0.8%), Annual Retail Sales Growth at Recession Level 
- First-Quarter Real Sales Contracting at 2.6% (-2.6%) Annualized Pace, Worst Showing Since Depths of Economic Collapse 
- Real Earnings Were Down for the Month 
- February Year-to-Year Inflation: 0.0% (CPI-U), -0.6% (CPI-W), 7.6% (ShadowStats) 
- Unstable Home Sales Data – New Sales in Protracted Stagnation, Existing Sales Trending Lower

"No. 706: February CPI, Home Sales and the Economy, Fed and Dollar " 




Total to raise $15 billion in China for Russian projects
Published time: March 23, 2015 13:56

French oil and gas producer Total is looking for $15 billion in investment from China to pay for expansion in Russia, the company’s CEO Patrick Pouyanne said. This could be the largest private corporate deal involving Chinese banks.

Total wants to expand the financing of the $27 billion dollar Yamal LNG project in Russia’s Siberia, said Pouyanne in an interview with the WSJ. The company says it’s possible the funding will be in either euro or yuan.

“You have a strong willingness to build the project financing [from the Chinese financial institutions – Ed.],” he said. “It’s not an easy task, to be clear. We would have preferred to do it with dollars.”

The attraction of dollar investment is complicated by the sanctions the US imposed against Russia in order to hamper its access to the global financial markets.

Total plans to close the deal by the middle of 2015, but Pouyanne didn’t mention which Chinese banks may be involved. The Yamal LNG project is being financed by Total, Russia’s Novatek and China National Petroleum Corp. Novatek has a 60 percent share in the project, while France’s Total and China’s CNPC have 20 percent each.

This $15 billion financing would be the largest private corporate deal Chinese banks have ever been involved in. Currently, the biggest deal is a $12 billion syndicated loan to Daimler AG agreed in 2013, in which two of the 34 banks were Chinese.


Jim Sinclair’s Commentary

You know it really is a situation wherein economic statistics logically argue with each other.

Sales of New U.S. Homes Unexpectedly Rise to Seven-Year High

(Bloomberg) — Purchases of new homes in the U.S. unexpectedly rose in February to a seven-year high as stronger job gains helped bolster industry activity amid severe weather.

Sales climbed 7.8 percent to a 539,000 annualized pace, the most since February 2008, Commerce Department data showed Tuesday in Washington. The reading exceeded even the most optimistic forecast of economists surveyed by Bloomberg.

Americans withstood weaker income gains and higher property prices, braving a chillier-than-usual February to go out and buy a house last month. Further healing in the labor market and a boost in inventory should provide stronger support to an industry entering its busiest sales season.

“It looks like the spring selling season is off to a good start,” said Stan Shipley, an economist at Evercore ISI in New York, whose projection for 485,000 sales was among the closest in the Bloomberg survey. “With low mortgage rates, if you look at it, it’s very affordable for most potential homeowners,” even as credit remains tight, he said.

Stocks fluctuated as investors weighed stronger-than-forecast gains in consumer prices and new-home sales for clues on when the Federal Reserve will raise interest rates. The Standard & Poor’s 500 Index was little changed at 2,104.5 at 10:30 a.m. in New York. The S&P Supercomposite Homebuilding Index climbed 1.3 percent.


Jim Sinclair’s Commentary

Could Mother Nature be a little angry at us?

Welcome to the tropics: Bogota covered in 24 inches of snow
Mar 23, 2015 posted by Adriaan Alsema

Colombia’s capital Bogota was surprised on Sunday by a major hail storm that covered the south of the city with a 24-inch layer of icy snow.

The excessive hail caused a number of emergencies across the city.

Entire streets became either covered in ice or former rivers, while rooftops were damaged and trees fell down.

“Fortunately there are no victims, just material damage,” Javier Pava of the Bogota Disaster Rick and Prevention unit was quoted as saying by newspaper El Espectador.

The unit was called to rescue four people from a parking garage where the collapsed roof was impeding the victims from leaving.


Does Washington Intend War With Russia–PCR Interviewed by The Saker
March 23, 2015

The Saker interviews Paul Craig Roberts

I had been wanting to interview Paul Craig Roberts for a long time already. For many years I have been following his writings and interviews and every time I read what he had to say I was hoping that one day I would have the privilege to interview him about the nature of the US deep state and the Empire. Recently, I emailed him and asked for such an interview, and he very kindly agreed. I am very grateful to him for this opportunity.

The Saker


The Saker: It has become rather obvious to many, if not most, people that the USA is not a democracy or a republic, but rather a plutocracy run by a small elite which some call “the 1%”. Others speak of the “deep state”. So my first question to you is the following. Could you please take the time to assess the influence and power of each of the following entities one by one. In particular, can you specify for each of the following whether it has a decision-making “top” position, or a decision-implementing “middle” position in the real structure of power (listed in no specific order)

Federal Reserve
Big Banking
Council on Foreign Relations
Skull & Bones
Goldman Sachs and top banks
“Top 100 families” (Rothschild, Rockefeller, Dutch Royal Family, British Royal Family, etc.)
Israel Lobby
Freemasons and their lodges
Big Business: Big Oil, Military Industrial Complex, etc.
Other people or organizations not listed above?
Who, which group, what entity would you consider is really at the apex of power in the current US polity?

Paul Craig Roberts: The US is ruled by private interest groups and by the neoconservative ideology that History has chosen the US as the “exceptional and indispensable” country with the right and responsibility to impose its will on the world.


Jim Sinclair’s Commentary

From a reasonable source.

HSBC Not Closing Gold Vaults – Safety Deposit Boxes of Clients‏ Being Closed
Posted on March 24, 2015 by The Doc

An incorrect rumor that HSBC is rapidly and quietly closing gold vaults where clients gold bullion was stored and gold in the GLD ETF is stored has been swirling around the internet.

After conversations with key players in the industry including a bullion dealer who used the safety deposit boxes for storage and delivery to clients, we can now confidently say that the speculation was incorrect.

What HSBC is actually doing is closing its safety deposit box facilities some of which are in vaults and strong rooms in branches.


Jim Sinclair’s Commentary

I wonder if you can believe any figures from the government. Dollar strength should have overcome this.

Core Consumer Prices in U.S. Increase More Than Projected
by Bloomberg News
8:47 AM EDT March 24, 2015

(Bloomberg) — The cost of living in the U.S. excluding food and fuel rose more than forecast in February, reflecting broad-based gains that helped keep a floor under inflation.

The so-called core consumer-price index climbed 0.2 percent for a second month, a Labor Department report showed Tuesday in Washington. The median forecast of economists surveyed by Bloomberg called for a 0.1 percent increase. Prices overall also climbed 0.2 percent, the first advance in four months, as fuel costs stabilized.

An improving job market is helping underpin consumer confidence, giving American companies a little more pricing power. Members of the Federal Reserve’s policy making Federal Open Market Committee are looking for inflation to accelerate and close in on their 2 percent target as they weigh the timing of their first interest rate increase since 2006.

“You’re going to see some floor built into prices,” said Jacob Oubina, a senior U.S. economist at RBC Capital Markets LLC in New York, which correctly forecast the increase in core prices. For the Fed, the report “will give them confidence that headline inflation will be near 2 percent in the medium-term, which is all they want at this point.”

Stock-index futures held earlier gains after the report and the yields on Treasury securities were little changed. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.1 percent to 2,096.6 at 8:45 a.m. in New York. The yield on the benchmark 10-year note was 1.89 percent compared with 1.91 percent late on Monday.


Stratfor Founder: Russia “can endure things that would break other nations”

Throughout 2014 and into 2015, Russia has been under relentless assault by the Western elite who have engaged ineconomic, strategic and information warfare in a bid to force regime change in Moscow, a fact that is well documented by this point. What has been less well documented is the ability of the Russian people to withstand such tremendous economic hardships and full-frontal assaults down through history, whilst still remaining a strong and cohesive people. Russia is a one of the most unique countries on the planet who has responded to sanctions and demonization in a way no other country could have. Overthrowing the Russian government is a far greater challenge to the West than ousting any other regime on earth, a challenge that has as much chance of boomeranging and fracturing the West as it has of being successful.

In a December 2014 article titled: Viewing Russia from the Inside by George Friedman, the founder and CEO of the geopolitical intelligence firm Stratfor, (which is also known as the shadow CIA), Friedman details Russia’s ability to “endure things that would break other nations” as well as noting that “Russians don’t respond to economic pressure as Westerners do”:

“Russians’ strength is that they can endure things that would break other nations… Therefore, the Russians argued, no one should expect that sanctions, no matter how harsh, would cause Moscow to capitulate…. It would explain why the increased sanctions, plus oil price drops, economic downturns and the rest simply have not caused the erosion of confidence that would be expected. Reliable polling numbers show that President Vladimir Putin is still enormously popular. Whether he remains popular as the decline sets in, and whether the elite being hurt financially are equally sanguine, is another matter. But for me the most important lesson I might have learned in Russia — “might” being the operative term — is that Russians don’t respond to economic pressure as Westerners do.”



The Fed Keeps Getting More and More Pessimistic

Is the pessimism getting overdone?
by Julie Verhage

In its latest outlook for the U.S. economy, the Federal Reserve once again lowered its projections for GDP growth.

On Wednesday, the Fed moved a step closer to hiking rates for the first time since 2006 by removing the word "patient," but appeared overall dovish as it downgraded economic growth and inflation projections. Earlier Bloomberg pointed out that unlike in December, Fed officials no longer see economic growth reaching 3 percent — this year, next year, the year after that, or in the long run.

Deutsche Bank Securities Chief International Economist Torsten Sløk sent out a chart today that crisply shows how the Fed is becoming more and more pessimistic as time goes on. You can see the recent projections in the dark blue line.


"The bottom line in the chart below is that the Fed is no longer expecting a strong rebound over the coming years. In my view, the risks are rising that the Fed is becoming too pessimistic about the outlook," he said. 


Posted at 3:23 PM (CST) by & filed under In The News.

US "Loses" $500 Million In Weapons Given To Yemen, Now In Al-Qaeda Hands
Submitted by Tyler Durden on 03/23/2015 14:59 -0400

And, naturally, after noting that "the employees said that more than 20 vehicles were taken by the fighters after the Americans departed from Sanaa’s airport" we asked how long until we have a "tabulation of losses to US taxpayers, just like the great Islamic State ‘robbery’ of hundreds of millions in US military equipment in Iraq?" That, of course, was another epic US intervention success story.

Anyway, thanks to WaPo we have an answer: according to Jeff Bezos’ recent media acquisition, "the Pentagon is unable to account for more than $500 million in U.S. military aid given to Yemen."

Obviously, "can’t account for" means "has lost." But while the US does not know where nearly half a billion in weapons can be found, it is more than informed who is the current owner: there are "fears that the weaponry, aircraft and equipment is at risk of being seized by Iranian-backed rebels or al-Qaeda, according to U.S. officials."

And just like that, America’s now laughable, pathetic foreign policy has not only resulted in another US-supported administration to be exiled or worse, but is has directly armed the adversary. And to think it was only 6 months ago when the Teleprompter in Chief was praising the "Yemen success story." From Obama’s Statement on ISIL as of September 10, 2014:

Now, it will take time to eradicate a cancer like ISIL.  And any time we take military action, there are risks involved –- especially to the servicemen and women who carry out these missions.  But I want the American people to understand how this effort will be different from the wars in Iraq and Afghanistan.  It will not involve American combat troops fighting on foreign soil.  This counterterrorism campaign will be waged through a steady, relentless effort to take out ISIL wherever they exist, using our air power and our support for partner forces on the ground.  This strategy of taking out terrorists who threaten us, while supporting partners on the front lines, is one that we have successfully pursued in Yemen and Somalia for years.  And it is consistent with the approach I outlined earlier this year:  to use force against anyone who threatens America’s core interests, but to mobilize partners wherever possible to address broader challenges to international order.

Some may find it odd then, that 6 months later this "strategy" has been flipped on its head, and the Obama administration is taking out its partners (in Yemen), while supporting the terrorists who threaten us.


Posted at 8:31 AM (CST) by & filed under In The News.

My Dear Friends,

This interview is extremely powerful and deserves your attention. Please listen to it.


Why we need to stop ignoring the U.S. debt problem?

Russia warns Denmark its warships could become nuclear targets
Russia tells Denmark not to join Nato missile shield or face becoming a target for Russian missiles
By Julian Isherwood, Copenhagen
2:51PM GMT 21 Mar 2015

Russia has gone on the offensive in the Baltic, warning Denmark that if it joins Nato’s missile defence shield, its navy will be a legitimate target for a Russian nuclear attack.

“I don’t think that Danes fully understand the consequence if Denmark joins the American-led missile defence shield. If they do, then Danish warships will be targets for Russian nuclear missiles,” said Mikhail Vanin, the Russian ambassador to Denmark, to the Jyllands-Posten newspaper.

“Denmark would be part of the threat against Russia. It would be less peaceful and relations with Russia will suffer. It is, of course, your own decision – I just want to remind you that your finances and security will suffer. At the same time Russia has missiles that certainly can penetrate the future global missile defence system,” Mr Vanin said.

Denmark’s Foreign minister, Martin Lidegaard, reacted strongly to the comments, calling the ambassador’s statement “unacceptable”.

“If that is what he has said, then it is unacceptable. Russia knows full well that Nato’s missile defence is defensive and not targeted at (Russia).


Jim Sinclair’s Commentary

You think there just might be unrest among the monetary intellectuals?

Low rates will trigger unrest as central banks lose control – BIS
Bank for International Settlements warns that low rates risk backlash as effects spill over into the real economy
By Szu Ping Chan
11:00AM GMT 18 Mar 2015

Low inflation, bond yields and interest rates around the world will push the boundaries of economic and political stability to breaking point if they continue on their downward trajectory, the Bank for International Settlements has warned.

The Swiss-based “bank of central banks” said the “sinking trend” of global rates would push countries further into uncharted territory.

It highlighted that $2.4 trillion (£1.6 trillion) of long-term global sovereign debt was now trading at negative yields, with an increasing number of investors willing to pay governments for the privilege of lending to them.

“As bond markets show us day after day, the boundaries of the unthinkable are exceptionally elastic,” said Claudio Borio, head of the Monetary and Economic department at the BIS.

“The consequences should be watched closely, as the repercussions are bound to be significant.”

The BIS warned that the low rate environment risked creating instability.

Low rates have already led to gaping pension deficits and lower bank profits, while the returns on savers’ deposits have also been eroded.



Jim Sinclair’s Commentary

Looks like USA’s dollar allies are advancing to the rear.

De-Dollarization Accelerates As More Of Washington’s “Allies” Defect To China-Led Bank
Tyler Durden on 03/19/2015 18:01 -0400

The global de-dollarization trend continues as it appears the UK’s move to join the China-led Asian Infrastructure Development Bank has indeed shown other US “allies” that spurning Washington’s advice is actually acceptable and concerns about the institution’s “standards” may simply be a diversion aimed at undermining China’s attempt to exercise more influence in its own backyard. Here’s more from the NY Times:

Ignoring direct pleas from the Obama administration, Europe’s biggest economies have declared their desire to become founding members of a new Chinese-led Asian investment bank that the United States views as a rival to the World Bank and other institutions set up at the height of American power after World War II.

The announcement on Tuesday by Germany, France and Italy that they would follow Britain and join the Chinese-led venture delivered a stinging rebuke to Washington from some of its closest allies. It also called into question whether the World Bank and the International Monetary Fund, which grew out of a multination conference in Bretton Woods, N.H., in 1944 and established an economic pecking order that lasted 70 years, will find their influence diminished.

The announcement by Germany, Europe’s largest economy, came only six days after Secretary of State John Kerry asked his German counterpart, Frank Walter-Steinmeier, to resist the Chinese overtures until the Chinese agreed to a number of conditions about transparency and governing of the new entity. But Germany came to the same conclusion that Britain did: China is such a large export and investment market for it that it cannot afford to stay on the sidelines.

South Korea, another US ally that the Obama administration has not-so-subtly lobbied to stay out of the AIIB for the time being, is reportedly reconsidering a bid to join and although reports that Seoul had already committed to the venture appear to have been a bit premature, the country will make a decision this month and is expected to discuss specifics this weekend at a meeting with Chinese and Japanese officials. Here’s FT:

The foreign ministers of China, Japan and South Korea will meet in Seoul this weekend for the first time in three years, in an effort to calm tensions in the region.


Jim Sinclair’s Commentary

Currency unions do not have a good history.

EU offers $2bn in unused funds to Greece
Published time: March 20, 2015 13:29

The European Commission has made $2 billion of unused funds available to Greece to help the country avert a cash crunch, EC head Jean-Claude Juncker says.

The offer was made a day after crisis talks between Greece’s new Prime Minister Alexis Tsipras and European leaders on Greece’s EU-IMF bailout.

Greek authorities said on Friday they were gradually moving towards meeting the requirements of international creditors on a more detailed reform plan, after Prime Minister Tsipras said his coalition would intensify work to avert the country’s bankruptcy.


US Armored Columns March Through Six Eastern European Countries
05:17 20.03.2015(updated 15:23 20.03.2015)

The United States Army will send a convoy of American soldiers and military vehicles through Eastern European countries near Russia’s western border, despite Moscow’s repeated expression of concern over NATO’s expansion of forces in the region.

The 1,100 mile journey, dubbed “Dragoon Ride,” will last from March 21 through April 1 and wraps up months the US Army spent training with allies in Poland and the Baltics.

American troops from the 2nd Cavalry Regiment will accompany their eight-wheeled armored combat vehicles, called Strykers, while the Army’s 12th Combat Aviation Brigade will provide aerial reconnaissance support.

The convoy will take soldiers from separate training locations in Estonia, Lithuania and Poland and transport them through Latvia, the Czech Republic and finally to their home base at Rose Barracks in Vilseck, Germany.

“It’s helped us further develop our understanding of freedom of movement in Eastern Europe,” Lt. Gen. Ben Hodges, US Army Europe commander, said in an interview with Defense News and Army Times reporters and editors.


Even Ed Yardeni Admits “This Is Not Investing… The Markets Are All Rigged”
Tyler Durden on 03/19/2015 16:30 -0400

“This is not investing,” exclaims Ed Yardeni in this brief clip, “it is all about central bankers… these markets are all rigged.” That is not a criticism he notes, “I just say that factually… I love these central bankers, they’ve been very good to the stock market.” The clip is then followed by a defense of this pumping by central banks, because “we are a 401(k) society.” Which apparently ignores the whole “massive inequality gap” issue that is staring America right in the eyes… But for now stocks are up so “shut up and enjoy it” as Larry Kudlow said yesterday.

3 minutes of confused fact-facing and justification…

(you’ll have to go to the story to hear the discussion)

Which is ironic given CBNC’s front page has duelling headlines proclaiming the markets are rigged and that Flash Boy’s claim that the markets are rigged has not been proven…



Sovereign Man
March 20, 2015
Sovereign Valley Farm, Chile

Imagine going to the bank to withdraw some cash.

Having some cash on hand is always a prudent strategy. Especially today as more and more bank deposits creep into negative interest rate territory, meaning that you have to pay the banks for the privilege of having them gamble with your money.

You tell the teller that you’d like to withdraw $5,000 from your account. She hesitates nervously and wants to know why.

You try to politely let her know that that’s none of the bank’s business as it’s your money.

The teller disappears for a few minutes, leaving you waiting.

When she returns she tells you that you can collect your money in a few days as they don’t have it on hand at the moment.

Slightly irritated because of the inconvenience, you head home.

But as you pull into your driveway later there’s an unexpected surprise waiting for you: two police officers would like to have a word with you about your intended withdrawal earlier…

If this sounds far-fetched, think again. Because it could very well become a reality in the Land of the Free if the Justice Department gets its way.

Earlier this week, a senior official from the Justice Department spoke to a group of bankers about the need for them to rat out their customers to the police.

What a lot of people don’t realize is that banks are already unpaid government spies.

Federal regulations in the Land of the Free REQUIRE banks to file ‘suspicious activity reports’ or SARs on their customers. And it’s not optional.

Banks have minimum quotas of SARs they need to fill out and submit to the federal government.

If they don’t file enough SARs, they can be fined. They can lose their banking charter. And yes, bank executives and directors can even be imprisoned for noncompliance.

This is the nature of the financial system in the Land of the Free.

And chances are, your banker has filled one out on you—they submitted 1.6 MILLION SARs in 2013 alone.

But now the Justice Department is saying that SARs aren’t enough.

Now, whenever banks suspect something ‘suspicious’ is going on, they want banks to pick up the phone and call the cops:

“[W]e encourage those institutions to consider whether to take more action: specifically, to alert law enforcement authorities about the problem, who may be able to seize the funds, initiate an investigation, or take other proactive steps.”

So what exactly constitutes ‘suspicious activity’? Basically anything.

According to the handbook for the Federal Financial Institution Examination Council, banks are required to file a SAR with respect to:

“Transactions conducted or attempted by, at, or through the bank (or an affiliate) and aggregating $5,000 or more…”

It’s utterly obscene. According to the Justice Department, going to the bank and withdrawing $5,000 should potentially prompt a banker to rat you out to the police.

There’s something else about this that I want to point out, though: this may be a very early form of capital controls in the Land of the Free.

This is the subject of today’s Podcast. You can listen in here:

Have a great weekend,

Simon Black

Underwater Homeowners “Here To Stay” Zillow Says
Tyler Durden on 03/20/2015 09:16 -0400

A few weeks back we commented on the rather disturbing news that repeat foreclosures jumped in January:

According to Black Knight Financial, both new and repeat foreclosures hit a 12-month high during the first month of the year with repeats (i.e. the borrower was rescued but has since entered the foreclosure process again) jumping 11% M/M. More troubling is the trend in repeat foreclosures which accounted for only 15% of total foreclosures during the crisis but now make up a startling 51%.

Here’s what the trend looks like:

Now, a new report from Zillow seems to offer further evidence that the US housing market may not be the picture of health after all (as if we needed more proof after housing starts cratered 17% in February). The percentage of homeowners underwater in the US was flat from Q3 to Q4 which doesn’t sound all that terrible until you consider that this figure had fallen for 10 consecutive quarters. Things look particularly bad in Florida and the midwest where Zillow notes more than 25% of borrowers are sitting in a negative equity position. Here’s more:

In the fourth quarter of 2014, the U.S. negative equity rate – the percentage of all homeowners with a mortgage that are underwater, owing more on their home than it is worth – stood at 16.9 percent, unchanged from the third quarter. Negative equity had fallen quarter-over-quarter for ten straight quarters, or two-and-a-half years, prior to flattening out between Q3 and Q4 of last year…


Posted at 8:03 AM (CST) by & filed under Jim's Mailbox.


Where are the citizens with the pitchforks?

The guy’s is already collecting two pensions each in excess of $30,000. Now he wants to add a third one. All he had to do was become a substitute teacher for one day!

With all due respect to many of the hardworking teachers out there, this is more blatant than some of the evil practices we witness on Wall Street.

Abuse of the law is becoming worse by the day. Soon, people will come to realize the law is worthless. Wyatt Earp realized that over 130 years ago. Perhaps Shakespeare was right.

The USA has become a corrupt maelstrom of laws designed to benefit the few.  What of the many?

“E Pluribus Unum” takes on a new meaning.

Everything is spiraling out of control. Currencies, debt, politically and economically influenced wars, monstrous flash trading destroying the markets, abused social nets, etc.

Thank the Lord for Gold. It’s like a dog… stays loyal and by your side till the end.

CIGA Wolfgang

Union lobbyist who worked one day as a teacher suing Illinois for $30,000 pension
By Eric Boehm
Published March 19, 2015

Piccioli is a retired union political activist who’s already pulling down a pair of state pensions from Illinois’ beleaguered public retirement system. But he’s taking the Teachers Retirement System to court to squeeze more money out of the state.

The Chicago Tribune reported Thursday that Piccioli is already collecting $31,000 annually from the Teacher Retirement System, but he could get an additional $36,000 annually if he wins his case. He’s also collecting a $30,000-pension from a different state retirement system for his time as a legislative aide in Springfield, according to the Tribune.

Piccioli is a retired lobbyist for the Illinois Federation of Teachers and never worked in a classroom, but he took advantage of a loophole in Illinois pension law to score his teaching pension.

In 2007, he worked one day as a substitute teacher at a Springfield school. Under Illinois pension law, that one day in the classroom allowed him to qualify for a pension that would pay him for all of his years of work as a member of the union.



Complacency is the key word here. People have become too complacent. As long as they see the exit door, they believe it will be their salvation.

Most feel confident that they will see any market turmoil coming, much as you would see the approaching storm clouds on the open prairie. But even the nimble will get their butts caught in the wringer when the turbulence hits.

Simply witness what happened this Wednesday.

The Euro surged over 4% against the Dollar! An event in a major currency that normally takes months, if not years, to transpire according to many traders!

When you’re caught with your pants down and seek the refuge of Gold, it just may be too late. You will pay dearly for its safety.

CIGA Wolfgang Rech

When The World’s Reserve Currency Flash Crashed: “I Haven’t Seen Anything Like It Since The Financial Crisis’
Zerohedge 3/20/2015

“I haven’t seen anything like it since the financial crisis,” said Paul Lambert, head of currency at Insight Investment, which manages $480 billion of assets.

Traders said Wednesday’s move brought back memories of January’s surge in the Swiss franc, when the currency climbed more than 40% after the Swiss central bank abandoned its policy of capping the franc’s strength against the euro. For a few minutes on Wednesday, the lack of dollar buyers caused a short-term freeze in electronic trading platforms, according to a New York-based trader at a major currency-dealing bank. “There was a lot of shouting on the desk, a lot of nervousness,” the trader said.



A refreshing article to read.

CIGA Perry

Why Gold Will See $2,000
ANZ’s Warren Hogan and Victor Thianpiriya say central bank demand may drive the metal to new highs as China emerges as a gold trading hub.
By Warren Hogan and Victor Thianpiriya
March 18, 2015


The income effect implies that consumer purchasing power increases as real wages rise, and as such, the demand for gold will increase as more people can afford to buy it. In Asia over the past few decades, the income effect has been dominant. The Asian economies (particularly China and India) have enjoyed strong growth, but still have a relatively tightly regulated and narrow financial system. Gold has been a beneficiary of these challenges as it is largely not subject to the same regulations as the wider financial system. Given that gold has also played a strong role in Asian cultures, the demand is even higher than purely financial factors would suggest.

Over the next five to ten years, the fundamentals of substantial economic growth and a constrained financial system will continue to provide support for gold.

Among the emerging countries within the Asia 10, average gold demand amounts to just 0.70 grams per person. This is roughly half the per capita consumption levels of more developed countries with higher incomes (e.g. Germany, USA, Canada, South Korea, and Japan as shown in Figure 3). Per capita gold demand in the emerging economies of the Asia 10 has the potential to double as these countries become richer and more industrialized.



This dynamic could have a profound effect on Asian demand for physical gold. Developed country investors currently hold around 2% of their portfolios in commodities, although some studies suggest an optimal allocation should be closer to 5%.4 Given its relative liquidity, gold may comprise around half of these holdings. We estimate that total retail and institutional gold demand for the Asia 10 region could amount to almost 5,000 tonnes per annum by 2030, up from 2,500 tonnes currently. Continued central bank purchases could add significantly to Asia’s overall demand.


Over the next decade, emerging market central banks will need to hold a larger stock of physical gold in their vaults to shore up confidence in the newly floating exchange rates. Many of these central banks already have large FX reserves, which have been building since the Asian currency crisis of the late 1990s. Advanced economy central banks will likely maintain existing gold holdings, implying continued net buying from the official sector over the years ahead.

Central banks have become aware of the risks inherent in their reserve portfolios, particularly given the financial market volatility experienced since the GFC, and have been diversifying their portfolios away from US dollars and Euro-denominated assets. A surge in public sector indebtedness since the crisis adds to the case for diversification. Some of this diversification has been into peripheral government bond markets, but we have also seen central banks buying gold, most noticeably those in emerging markets.

A recent IMF paper5 showed that gold was viewed by central banks as an asset that could be used to reduce risk. These results are consistent with a survey ANZ conducted with central banks and sovereign wealth fund managers in early 2014 which found that almost half of the respondents believed that gold was a safe haven asset over the long-term. 6 Additionally, over 60% of respondents believed that gold would constitute a larger proportion of central bank reserves over the next two years, with just over 20% expecting a decline. Further, around half of the respondents thought holding more gold could mitigate portfolio risks, most of which were central bankers from ‘low-middle income’ countries (see Figure 4).



Didn’t I read on this site years ago that we need 325,000 jobs just to keep up with birth and population growth? Also, I retouched a photo off the site.

CIGA Scott


Posted at 8:37 AM (CST) by & filed under In The News.


Jim Sinclair’s Commentary

Notice that Toyota has run out of white pickup trucks, and has now moved to mustard for ISIS?

If Damascus falls, Europe won’t be far behind – US senator
Published time: March 19, 2015 02:11

As a new report details the devastation wrought upon Syria by four years of rebellion, a Virginia state senator who once thanked the Syrian government for defending Christians is worried about the fate of Damascus, the Middle East and Europe.

“If Damascus falls, the dreaded black and white flag of ISIS will fly” over Syria, Virginia state Senator Richard Black told RT. “Within a period of months after the fall of Damascus, Jordan will fall and Lebanon will fall,” he said, adding that the self-proclaimed Islamic State would then target Europe next.

Black is no stranger to the Syrian crisis. Last year, he wrote a letter thanking the government in Damascus for a “gallant and effective campaign” to liberate Christian villages on the border with Lebanon. Most Americans are not aware that Christianity started in present-day Syria, he pointed out.

Years of US interventions in the Middle East and elsewhere have resulted in vast numbers of displaced Christians in Syria, Iraq and the Balkans. “If you look at the history of American involvement,” since the first Iraq war, Black told RT, “the one central theme has been that in each instance we’ve purged Christians from various countries.” Christians who lived in Kosovo for over a thousand years “are gone, completely annihilated.”

During the four-day pogrom in Kosovo 11 years ago, more than 4,000 Christian Serbs were driven out of six towns and nine villages. Over 900 houses and 39 churches were also destroyed by ethnic Albanian rioters.


Jim Sinclair’s Commentary

Not what the US dollar, or US interests wants.

EU nations to join China bank: report
MARCH 17, 2015 12:15PM

France, Germany and Italy have agreed to follow Britain’s lead and join a China-led international development bank, The Financial Times said on Tuesday citing ‘European officials’.

The decision by the European troika follows Britain’s decision to join the bank and will add further pressure on Australia and the US to follow suit.

With Australia, South Korea and other nations also contemplating following suit, the moves are viewed as China eroding America’s ties with its closest allies.

It is estimated the Asian region will need at least $800 billion a year in new infrastructure over the next decade and the bank is seen as a way to fill the funding gap.

President Obama’s strategy of pressing allies not to join the AIIB is a losing proposition, according to Elizabeth Economy, a senior fellow and director of Asia Studies at the US-based Council on Foreign Relations independent think tank.

Ms Economy argues the US needs to join the AIIB.


Jim Sinclair’s Commentary

Could be the pan calling the tea pot a vessel with an iron heart.

Cheney: Obama is ‘worst president of my lifetime’
David Jackson, USA TODAY 11:22 a.m. EDT March 18, 2015

Dick Cheney is not a big fan of President Obama (and vice-versa).

In an interview published in Playboy, Cheney called Obama “the worst president in my lifetime,” and that his damaging legacy will endure.

“I used to have significant criticism of Jimmy Carter,” said the former Republican vice president. “But compared to Barack Obama and the damage he is doing to the nation — it’s a tragedy, a real tragedy, and we are going to pay a hell of a price just trying to dig out from under his presidency.”

Cheney attacked Obama’s foreign policy, including a “precipitous withdrawal” and the status of the U.S. military.

“The way Obama is functioning now, he’s crippling the capacity of future presidents to deal with future crises,” Cheney toldPlayboy. “It takes a long time to build up that military force. And I am absolutely convinced there will be a future president — two or three times down the road, perhaps — who will be faced with a major crisis and will not have the military capability he needs to deal with it.”

Obama and aides have said that Cheney and President George W. Bush undermined military strength with an unnecessary 2003 invasion of Iraq, and damaged U.S. relations with allies in the process.


Jim Sinclair’s Commentary

God help the equity market if Ben keels over.

Ben Bernanke Was Right: “No Rate Normalization During My Lifetime”
Submitted by Tyler Durden on 03/18/2015 15:27 -0400

With the Fed’s credibility terminally smeared across the windshield of the Marriner Eccles-mobile, courtesy of the latest “dots” projection which proved yet again – and beyond any doubt – that the FOMC members are just a pack of chimps throwing darts, and perhaps feces, at a fed funds dart board, we can now honestly say that the one Fed (ex) member who was 100% accurate (if only in this case), and who saw the writing on the wall early on and got the hell out of Marriner Eccles while he could, is Ben Bernanke.

As a reminder, this is what he said (via Reuters):

“At least one guest left a New York restaurant with the impression Bernanke, 60, does not expect the federal funds rate, the Fed’s main benchmark interest rate, to rise back to its long-term average of around 4 percent in Bernanke’s lifetime. “Shocking when he said this,” the guest scribbled in his notes. “Is that really true?” he scribbled at another point, according to the notes reviewed by Reuters.”

Yes, it really is.


Here Is The Reason Why Stocks Are Soaring, Or Farewell “Recovery”… Again
Submitted by Tyler Durden on 03/18/2015 14:20 -0400

Why are stock soaring in response to the Fed statement and latest set of projections? Because, as Bloomberg promptly calculated, the FOMC revised down all forecasts for 2015 since the previous SEP was released on Dec. 17.

The median dot for year end 2015 falls to 0.625% from 1.125% in Dec: a whopping 0.50% cut.

And there goes not only the “recovery” but any imminent rate hike. 

The details:

The central tendency for GDP this year is 2.3%-2.7% vs 2.6%-3%. But the real hammer was 2016 and 2017: these were just slashed from 2.5%-3.0% and 2.3%-2.5% as of December, to 2.3-2.7% and 2.0-2.4%.

Unemployment rate 5.0-5.2% vs 5.2%-5.3%

The Fed now sees PCE inflation at 0.6%-0.8%. This was supposed to be 1%-1.6% just three months ago.

Core PCE 1.3%-1.4% vs 1.5%-1.8%

And the one that matters most, the “dot plot”, saw the median dot for 2016 fall to 1.875% vs 2.5%, and decline to 3.125% from 3.625% for 2017.


And here is a comparison of the dots since September 2014 courtesy of @Not_Jim_Cramer. The Fed: wrong as ever.


Posted at 12:01 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Here is a confidential picture taken inside one of the Fed meetings.


Jim Sinclair’s Commentary

Somehow they understand in Europe.

Police Barricade European Central Bank Ahead Of Protests
Associated Press
Tuesday March 17, 2015 12:05 PM

FRANKFURT, Germany (AP) — Police in Frankfurt, Germany, have put up barricades and barbed wire around the headquarters of the European Central Bank as they brace for potentially violent demonstrations against government austerity and capitalism.

The Blockupy alliance says activists plan to try to blockade the new headquarters of the ECB ahead of a ceremony Wednesday inaugurating the building, and to disrupt what they term capitalist business as usual.

Some 10,000 people are expected for a rally in Frankfurt’s main square, the Roemerberg. Organizers have chartered a special train bringing demonstrators from Berlin and are busing in others from around Germany and other European countries.

Frankfurt police say most demonstrators are expected to be peaceful, but that violence-prone elements could use the crowds as cover.

The ECB, along with the European Commission and International Monetary Fund, is part of the so-called “troika” that monitors compliance with the conditions of bailout loans for financially troubled countries such as Greece. Those conditions include spending restraint and reducing deficits, moves that are aimed at reducing debt but have also been blamed for high unemployment and slow growth.

Greece’s new left-wing government blames such policies for a “humanitarian crisis” leading to poverty for pensioners and the unemployed.

ECB President Mario Draghi has called for more spending by governments that are in good financial shape such as Germany — a call that has been mostly ignored by elected officials.

The ECB says it plans to be “fully operational,” although some employees may work from home.


ECB Prepares For Grexit, Anticipates 95% Loss On Greek Debt
Submitted by Tyler Durden on 03/18/2015 09:57 -0400

Dear Greek readers: the writing is now on the wall, and it is in very clear 48-point, double bold, and underlined font: when the ECB “leaks” that it is modelling a Grexit, something Draghi lied about over and over in 2012 and directly in our face too, take it seriously, because it is time to start planning about what happens on “the day after.” And incidentally to all those curious what the fair value of peripheral European bonds is excluding ECB backstops, the ECB has a handy back of the envelope calculation: a 95% loss.

Which also is the punchline, because while the ECB is making it very clear what happens next in the case of a “Graccident”, it has yet to provide an explanation how it will resolve the billions of Greek debt held on its own balance sheet which are about to be “marked-to-default”…

… and on which it is prohibited from suffering a loss, or else Draghi will have to fabricate even more on the run rules about how the ECB balance sheet is loss-proof… expect in this case, or that, or the other.

From Manager Magazin, google-translated:

The European Central Bank (ECB) is preparing for a possible Greek exit from the euro zone. In internal model calculations, the central bank has already calculated the consequences of different scenarios on the prices of Greek government bonds.

Fernando González Miranda, head of risk analysis of the ECB, assumed for his model calculations three different developments of the Greek crisis, the magazine reports. These variants have also been presented to our colleagues from the Bundesbank few days ago.

Under this method, the value of Greek government debt – currently around € 320 billion – in the event of a sudden, “accident-like” Farewell to the Greeks from the Euro-zone (“Graccident”) shrink to around 5 percent of the principal amount. If it were the Greek Government, however, to complete the withdrawal on the basis of ordered negotiations (“Grexit”), the ECB expects a residual value of government bonds by nearly 14 percent. And should it even create the country to negotiate a recent haircut, without having to give up the single currency, the government securities could keep at least a quarter of its original value.


Putin made his move…
Russia has begun “dumping” U.S. dollars

Dear Concerned American,

This is a quickly developing story that you need to see. It’s being reported that under the direct order of President Vladimir Putin, Russia has begun dumping U.S. dollars.

In the most recent month, the amount of dollars dumped added up to an estimated $8.8 billion in a 30-day period. However, new details are emerging that suggest this attack on our currency may quickly escalate.

Putin has been taking a series of calculated measures to expose weak spots in our economy and national security that pre-date his Crimean invasion.

But according to this must-see presentation from our team of financial experts, what he’s now setting in motion could bankrupt millions of Americans virtually overnight. That’s why we’re giving you access privileges to watch it right now – along with free follow-ups from Money Morning on this and more of the biggest stories that affect your personal wealth.

Click here to view this presentation…

Stay Safe,


Mike Ward
Publisher, Money Morning

Jim Sinclair’s Commentary

A hodgepodge of controls from cash to gold.

Google Translation :

The finance minister, M S, announced several measures including the prohibition to pay more than 1,000 euros in cash, as part of the “fight against the financing of T” in Le Parisien / Aujourd’hui en France on Wednesday.
In the name of ‘”the fight against the financing of T’” M S launches a manhunt to cash, writes that in “Finance Minister announces measures to minimize the use of cash. “
The first measure concerns the “prohibition to pay more than 1,000 euros in cash,” said Le Parisien explains. “So far, French consumers could address up to 3,000 euros cash purchases This maximum will be decreased to 1,000 euros. For non-residents, ie foreign tourists, the maximum is also lowered, from 15,000 to 10,000 euros. The cash payment allows indeed to recycle money from dubious origins. “
The measure “will be applied from 1 September 2015,” said M S the newspaper.
“The large withdrawals” will “systematically monitored,” the newspaper. “Banks should report any movement of funds or behavior that they consider suspicious to Tracfin, the Economy Ministry’s department for the fight against money laundering and financing of terrorism. But there was far no automatic threshold statement, “the paper recalls.
Now, “they will systematically report to Tracfin any deposit or withdrawal of superior species to 10,000 euros a month.” And from 1 January 2016. This delay is necessary to allow time for banking organizations to update their computer systems, points M S.
“From January 1, exchange offices will ask for ID when a person wants to exchange more than 1,000 euro currency,” the newspaper.
Another measure, “the obligation to declare capital transiting cargo.” “A customs declaration is mandatory if you enter the country with a ticket suitcase or a valuable commodity like gold,” the newspaper said. “But so far, it was not if you were delivered by post. From 1 January 2016, these physical capital transfers cargo and express cargo will have to be declared to  the customs.”

Jim Sinclair’s Commentary

The EU committed economic suicide when it signed on to the Russian sanctions.

Against US Strategy: Spain Calls for End to Confronting Russia
Madrid has recently joined the growing club of EU nations objecting to anti-Russian sanctions

The article originally appeared at German Economic News.

Translated for RI by Anita Zalaldinova

Spanish Foreign Minister Jose Manuel Garcia-Margallo spoke out against anti-Russian sanctions during his state visit to Moscow. These sanctions, he said, are harmful for both sides. Prior to this, Hungary, Italy, Greece and Cyprus had spoken out against the sanctions as well.

Spanish Foreign Minister Jose Manuel Garcia-Margallo said after a meeting with his Russian counterpart Sergei Lavrov in Moscow on Tuesday that the continuation of anti-Russian sanctions or their extension basically depend on ‘whether the agreements on Ukraine are complied with or not’. The sanctions are not advantageous for either side, EU Observer quoted García-Margallo.

In addition, there is no need for the extension of sanctions. Since the rebels in Ukraine withdrew their heavy weapons on the basis of the Minsk peace agreement which they thus obey. This is a positive development. The EU also needs to take into account Russia interests while developing its relations with Ukraine. García-Margallo added that the food sanctions of the Kremlin had affected the Spanish economy.

‘These sanctions have inflicted great damage on the Spanish economy (…) We have large losses, especially in the agricultural sector (…) I think that we need to somehow include Russia’s interests into the Association Agreement between the EU and Ukraine’, said the Spanish Foreign Minister.

Russian Foreign Minister Sergei Lavrov believes in a revision of the sanctions. ‘I would appreciate and prefer the situation in which each Member State of the EU is guided by its national interests’, said Lavrov. So Spain is a ‘long-standing and trusted partner’ but the Ukrainian crisis has led to a ‘difficult phase’ in European-Russian relations. Madrid and Moscow would like to create a bilateral multy-agency working group in order to combat international terrorism and to facilitate the adoption of Russian children by Spanish families.


A Nation Divided (Or “It’s Not The Weather, Stupid”)
Tyler Durden on 03/17/2015 18:55 -0400

Blame the weather… not so fast… It appears to be time to geographically and seasonally adjust the data…

And here is Steve Liesman Status Quo “It’s the weather, stupid” meme being destroyed by Diana Olick…

Whether you “believe” or not, the ranting is hilarious and we are sure Diana Olick will not be seen on screen again for a while (which is shame for numerous reasons)

Jim Sinclair’s Commentary

Who said the Greek exit from the EU would not be contagious?

Grexit Contagion Resumes After IMF Slams “Most Unhelpful Client Ever”
Submitted by Tyler Durden on 03/18/2015 09:20 -0400

Draghi, we have a problem. Despite the omnipotent buying power of the all-knowing ECB, peripheral European bond spreads are blowing out again (and stocks dropping) as Grexit fears start to spread contagiously across the continent. As Greece’s cash crunch looms ever closer (with capital controls looming) and bulls “throw in the towel” on the “nuts” Greeks, the IMF has come out and rubbed Mediterranean salt into that wound by telling the Eurogroup that Greece is the most unhelpful country the organization has dealt with in its 70-year history. As Bloomberg reports, in a short and bad-tempered conference call on Tuesday, officials from the ‘Troika’ complained that Greek officials aren’t adhering to a bailout extension deal leaving Dijsselbloem hinting at Cypriot templates for Greece.

The ‘Troika’ is not happy… International Monetary Fund officials told their euro-area colleagues that Greece is the most unhelpful country the organization has dealt with in its 70-year history, according to two people familiar with the talks. As Bloomberg reports,

In a short and bad-tempered conference call on Tuesday, officials from the IMF, the European Central Bank and the European Commission complained that Greek officials aren’t adhering to a bailout extension deal reached in February or cooperating with creditors, said the people, who asked not to be identified because the call was private.

German finance officials said trying to persuade the Greek government to draw up a rigorous economic policy program is like riding a dead horse, the people said, while the IMF team said Greece’s attitude to its official creditors was unacceptable. The German Finance Ministry didn’t respond to multiple requests seeking comment.

Concern is growing among officials that the recalcitrance of Prime Minister Alexis Tsipras’s government may end up forcing Greece out of the euro, as the cash-strapped country refuses to take the action needed to trigger more financial support. Tsipras is pinning his hopes for a breakthrough on a meeting with ECB President Mario Draghi, German Chancellor Angela Merkel, French President Francois Hollande and European Commission head Jean-Claude Juncker this week in Brussels.



March 18, 2015
Santiago, Chile

The United States government just went from “Please, baby, don’t leave me,” to frustrated threats and whining.

After the UK announced it will join new China-led Asian Infrastructure Investment Bank (AIIB) as a founding member late last week, Germany, France and Italy decided yesterday to follow Britain’s lead and join as well.

Welcome to the beginning of the end of the US dollar’s domination. It’s happening.

For the past few decades America was the undisputed global economic and political superpower.

The entire world happily used the US dollar, and hence, the US banking system. More importantly, the world happily placed its trust in the US government.

But there’s a limit to how irresponsible, reckless, and threatening you can be. Eventually such behavior catches up to you.

That time has now come.

The US government is now drowning in debt that can never be repaid. The US government’s own numbers, in fact, estimate its level of insolvency at roughly $60 trillion.

This means that when you add up all the assets of the United States—every acre of land, every tank, every drone, every drop of oil in the strategic reserve… and subtract all the debt and liabilities, the result is MINUS $60 trillion.

That is the net worth of the United States government.

On top of that, the US government has chosen to use its once-trusted currency and banking system as weapons to blackmail the rest of the world.

FATCA (the Foreign Account Tax Compliance Act) is probably the best recent example.

FATCA’s provisions require every single bank in the world to jump into bed with the Internal Revenue Service and agree to all sorts of expensive, debilitating information-sharing agreements.

And any bank which dares to defy the US government gets effectively blackballed from the US banking system and subject to a 30% withholding tax.

On top of that, the US government has taken to slamming foreign banks with the most astonishing fines—$9 billion, for example, in the case of French Bank BNP Paribas.

BNP’s wrongdoing was conducting business with countries, like Cuba and Iran, that the US government doesn’t like.

Bear in mind, BNP is a French bank and broke no French law whatsoever.

Moreover, the business was done through its Swiss subsidiary, and they broke no Swiss law either.

That didn’t matter to Uncle Sam, which fined the bank $9 billion under threat of being kicked out of the US banking system.

Blackmail. Extortion. Intimidation. This isn’t the behavior of a trusted friend. It’s the behavior of an arrogant sociopath.

And the rest of the world is sick of it.

Other countries—even allied nations—see that times are changing. There are new players on the rise, and the US isn’t the only option anymore.

Increasingly they’re turning to China, who, by some metrics, is already the largest economy in the world.

And the US government can’t do anything about it.

This is happening now with increasing speed. It’s mainstream news everywhere: the US is being shunned by its allies for the new kid on the block.

This has major implications for the United States. History shows that when reserve currencies change, the losing country almost invariably goes through significant turmoil.

But here’s the thing—the world is changing. But it’s not coming to an end.

Yes, things will change dramatically in the West in the coming years.

The standard of living that was attainable in the US because of its economic dominance will diminish.

For cues, look to Europe to see how unsustainable policies unravel when you don’t have the backing of the world’s reserve currency.

But people who recognize and embrace these changes early will prosper, for there will be tremendous opportunities throughout this process.

Modern technology means that all of our lives don’t have to be trapped within one single bankrupt country.

You can move your savings abroad to safety.

You can structure your business and assets so that you keep more of your hard-earned income for yourself and your family.

You can seek out investment opportunities out there that aren’t subjected to chasing bubbles induced by world central banks.

You can plan ahead and establish an alternative residency in a safe and thriving place, and perhaps even qualify for a second passport.

Bottom line– the world is changing. We can’t stop the end of the dollar’s dominance. All we can control is how we react to it… and when.

This is a real opportunity. Either an opportunity to gain, or an opportunity to lose. The choice is ours to make.

Until tomorrow,
Simon Black