Posted at 9:22 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Do you think the EU has figured out they have committed financial suicide by sanctioning Russia?

UK, French, German Citizens Wish to See EU Policy More Independent From US
© REUTERS/ Emmanuel Dunand/Pool
16:02 19.12.2014(updated 16:50 19.12.2014)

MOSCOW, December 19 (Sputnik) — Forty-six percent of European Union citizens argue that the 28-member bloc should act more independently from the United States, while only 28 percent think that Brussels is independent enough in its actions, a poll conducted by ICM Research exclusively for the Sputnik news agency revealed. The ICM Research questioned over 3,000 people in Germany, the United Kingdom, and France. Telephone interviews with adults in the three countries were conducted in December 2014.
According to the poll, the vast majority of German citizens, 62 percent, think that Brussels should become more independent from Washington, while only 15 percent of Germans believe that the European Union has already been acting independently enough from the United States.

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Philly Fed index falls to 24.5 in December
Published: Dec 18, 2014 10:05 a.m. ET

WASHINGTON (MarketWatch) — The Federal Reserve Bank of Philadelphia’s monthly index on regional manufacturers fell to 24.5 in December from 40.8 in November, which was the highest reading in almost 21 years, according to data released Thursday. Economists polled by MarketWatch had expected the Philly Fed gauge to pull back to 25 in December. Any reading above zero indicates that a net share of respondents saw an increase in the level of general business activity. Gauges of new orders and current shipments "weakened," and there was "deterioration" in the labor market, according to the report.

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Russia Busts "Gold-Selling" Rumors, Reports It Bought Another 600,000 Ounces Taking Gold Holdings To New Record High
Submitted by Tyler Durden on 12/19/2014 09:40 -0500

Yesterday, when we reported the latest rumor of Russian gold selling, this time out of SocGen, we said that "it should be noted that SocGen and its "sources" have a conflict: in an indirect way, none other than SocGen is suddenly very interested in Russia stabilizing its economy because as we wrote before, "Russia Contagion Spreads To European Banks : French SocGen, Austrian Raiffeisen Plummet" which also sent SocGen’s default risk higher in recent days. So if all it will take to stabilize the RUB sell off, reduce fears of Russian contagion, and halt the selloff of SocGen stocks is a "source" reporting what may or may not be the case, so be it."

Moments ago, as if to deter further speculation that Russia is indeed converting hard money earned from real resources for fiat paper, the Russian monetary authority made it quite clear, that at least in November, Russia not only did not sell any gold, but in fact bought another 600K ounces in the month of November.

• RUSSIAN MONETARY GOLD HOLDINGS RISE VS 37.6M ON NOV. 1

• RUSSIAN MONETARY GOLD HOLDINGS 38.2M TROY OZ AS OF DEC. 1

So we can now add another 600K to Russia’s most recent holdings:

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Posted at 11:48 AM (CST) by & filed under In The News.

China Prepares To Bailout Russia
Submitted by Tyler Durden on 12/17/2014 23:17 -0500

Earlier this evening China’s State Administration of Foreign Exchange’s (SAFE) Wang Yungui noted "the impact of the Russian Ruble depreciation was unclear yet, and, as Bloomberg reported, "SAFE is closely watching Ruble’s depreciation and encouraging companies to hedge Ruble risks." His comments also echoed the ongoing FX reform agenda aimed at increasing Yuan flexibility which The South China Morning Post then hinted in a story entitled "Russia may seek China help to deal with crisis," which which noted that Russia could fall back on its 150 billion yuan ($24 billion) currency swap agreement with China if the ruble continues to plunge, that was signed in October. Furthermore, two bankers close to the PBOC reportedly said the swap-line was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze.

As Bloomberg reported, earlier in the evening, China’s Wang Yungui noted

*CHINA IS CLOSELY WATCHING RUBLE’S DEPRECIATION: SAFE’S WANG

*CHINA ENCOURAGES COS. TO HEDGE RUBLE RISKS, SAFE’S WANG SAYS

*REAL IMPACT OF RUBLE DEPRECIATION UNCLEAR YET, SAFE’S WANG SAYS

Adding that China plans sweeping reforms to promote FX flexibility.

And then The South China Morning Post hints,

Russia could fall back on its 150 billion yuan (HK$189.8 billion) currency swap agreement with China if the rouble continues to plunge.

If the swap deal is activated for this purpose, it would mark the first time China is called upon to use its currency to bail out another currency in crisis. The deal was signed by the two central banks in October, when Premier Li Keqiang visited Russia.

"Russia badly needs liquidity support and the swap line could be an ideal tool," said Bank of Communications chief economist Lian Ping.

The swap allows the central banks to directly buy yuan and rouble in the two currencies, rather than via the US dollar.

Two bankers close to the People’s Bank of China said it was meant to reduce the role of the US dollar if China and Russia need to help each other overcome a liquidity squeeze.

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IMF Now Ready To Slam The Door On The U.S. And The Dollar [2014 = 7]
Submitted by Tyler Durden on 12/17/2014 – 22:25

This is it, folks; this is the endgame right in front of our faces. The year of 2014 is the new 2007, with all the negative potential but 100 times more explosive going into 2015. Our nation has wallowed in slowly degrading financial conditions for years, hidden by fake economic statistics and manipulated stock prices. All of it has been a prelude to a much more frenetic and shocking event. We expect a hailstorm of geopolitical crises over the next year to provide cover for the shift away from the dollar. Ultimately, the death of the dollar will be hailed in the mainstream as a “good and necessary thing.” They will call it “karma.” They will call it “progress.” They will even call it “decentralization” and a success for the free market. But it will not feel like a positive development for the American public, who will suffer greatly as the dollar crumbles.

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Posted at 10:56 AM (CST) by & filed under Jim's Mailbox.

Dear CIGAs,

The Office of the Comptroller of the Currency ("OCC") issued a Press Release today entitled "Underwriting Standards Continue to Ease, OCC Survey Shows," that should be of significant interest to those of you who share Jim’s concerns about bail-in and the need to GOTS. The OCC is the federal regulator for nationally-chartered banks — the ones with N.A. after their names, like Bank of America, N.A., Citibank, N.A., JP Morgan Chase, N.A., etc.

The most pertinent statements I saw in the Release were as follows:

" ‘This year’s survey showed a continued easing in underwriting standards, with trends very similar to those seen from 2004 through 2006,’ said Jennifer Kelly, Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner."

"The underwriting survey showed national banks and federal savings associations (banks) continued to adapt to changing economic conditions and competition by adjusting underwriting. Examiners noted that banks have eased underwriting standards and increased levels of credit risk in response to competitive pressures, abundant liquidity, and desire for yield in the low interest-rate environment. Large banks, as a group, reported the highest share of eased underwriting standards. Leveraged loans, indirect consumer, credit cards, large corporate loans, and international loans experienced the most easing in standards and continued the trend from last year."

"Trends very similar to those seen from 2004 through 2006." If memory serves, that did not end particularly well.

The entire release is available at: http://www.occ.gov/news-issuances/news-releases/2014/nr-occ-2014-168.html.

Sincerely yours,
CIGA Richard

Posted at 7:27 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Some booming economic recovery!

1 in 5 Millennials Live in Poverty, Census Bureau Says
December 15, 2014 – 1:09 PM
By Ali Meyer

(CNSNews.com) – One in five young adults – ages 18 to 34 years old – live in poverty, according to data from the U.S. Census Bureau.

“More millennials are living in poverty today, and they have lower rates of employment, compared with their counterparts in 1980,” the Census states. “One in five young adults lives in poverty (13.5 million people), up from one in seven (8.4 million people) in 1980.”

The data comes from a new Census release called “Young Adults: Then and Now,” which “illustrates characteristics of the young adult population (age 18-34) across the decades using data from the 1980, 1990 and 2000 Censuses and the 2009-2013 American Community Survey.”

In 1980, according to the Census, 14.1 percent of the total population ages 18 to 34 were living in poverty, which is determined by the millennial’s income in the past 12 months. In 1990, the percentage of millennials in poverty increased to 14.3 percent. In 2000, it climbed to 15.3 percent. And in 2009-2013 it reached the highest level recorded in the dataset of 19.7 percent.

Employment metrics, along with poverty metrics, have worsened for millennials. “Today, 65 percent of young adults are employed, down from 69 percent in 1980,” reports the Census.  In 1980, 69.3 percent of the population ages 18 to 34 were employed. In 1990, the percentage climbed to 70.6 percent. In 2000, it dipped to 68.7 percent, and in 2009-2013 it dipped again to 65.0 percent – the lowest level recorded in the dataset.

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Indian gold on "phenomenal" rise
By Mark O’Byrne
December 16, 2014

India’s gold imports were over a staggering 150 tonnes in November and have seen a "phenomenal" rise in India according to India’s Trade Secretary, Rajeev Kher.

A few weeks ago we said that the death of the Indian gold market was greatly exaggerated. The latest gold import data out of India confirms this.

clip_image002 

The import restrictions on gold that were imposed on Indians in August of 2013 were lifted at the end of last month. Despite the fact that the restrictions were still in place gold importation in November surged an incredible 571% relative to the same month last year at over 151.58 tonnes.

This was an increase of 38% from 109.55 tonnes a month earlier, trade ministry data showed on Tuesday.

The Indian government had recognised the socially destructive impact of the 80:20 scheme – which obliged importers to export 20% of it’s gold imports before bringing in another shipment – by pushing business into the hands of smugglers and thereby empowering criminality while losing out on the 10% duty currently charged on all gold imports.

It had been assumed that, because demand was being met by these “informal” supplies, the relaxing of the 80:20 policy would not have a dramatic impact on gold imports into India. That remains to be seen. Smuggling networks are now well established and arguably could provide cheaper gold than government-sanctioned channels.

The restrictions were put in place because the appetite of the growing Indian middle classes for gold was causing India to run large trade deficits. It is believed that it was also a misguided attempt at financial repression of gold in order to discourage Indians from buying physical gold. There were concurrent attempts to get Indians to open bank accounts and indeed to own digital and paper gold.

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Gold benefits as rouble implodes
Wednesday, December 17, 2014 by Proactive Investors

The spot price shot up US$11 to US$1,203 as fears grew for the Russian economy besieged by a crumbling oil price and sanctions.

Gold regained most of the ground lost Monday as the rouble went into freefall despite the frantic attempts of Russia’s central bank to prop up its beleaguered currency.

The spot price shot up US$11 to US$1,203 as fears grew for the Russian economy besieged by a crumbling oil price and sanctions.

The rouble dropped 19% against the dollar to more than 80 despite interest rates rising to 17% overnight.

It was not only Russia’s currency in trouble, though.

The Turkish lira slumped to an all time low, while latest data showing Chinese manufacturing declined last month only added to the bearish mood sweeping through equities markets.

US stock markets opened lower ahead of the start of the latest meeting of the US Federal Reserve’s interest rate committee.

Whether the volatility that has seen US shares fall for six days out of seven has any impact Fed thinking won’t be apparent until Janet Yellen gives her press conference after its conclusion Wednesday.

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Posted at 6:53 PM (CST) by & filed under General Editorial.

Dear Friends,

The blogger named James Emerson does not exist. He or she is writing under an assumed name, on a website operated by a company based offshore, and Tanzanian Royalty does not give credence to any commentator who refuses to be accountable. In addition, the company cannot by law give selective disclosure to reporters, but must disseminate the same information to all investors. Investors should refer to the company’s news release dated December 9, 2014.

If you have any questions about the company, please feel free to phone Tanzanian Royalty directly. We aim to dispel any lies and to address any concerns you may have. You may also call me directly at my office or on my cell. The numbers are as follows:

Office: 844 364 1830
Cell: 860 671 0846

Respectfully yours,
Jim

Posted at 3:17 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares the following with us.

- Headline November Housing Starts Fell Month-to-Month and Year-to-Year Amidst Ongoing Unstable Revisions 
- Smoothed for Extreme Reporting Volatility, Aggregate Housing Starts Show Pattern of Plunge and Low-Level Stagnation, No Economic Recovery

"No. 682: November Housing Starts" 
Web-page: http://www.shadowstats.com

 

Gold Imports ‘Phenomenal’ In India – 571 Percent Surge To 150 Tonnes in November
Posted on December 16, 2014 by Mark O’Byrne

Gold Imports ‘Phenomenal’ In India – 571 Percent Surge To 150 Tonnes in November

India’s gold imports were over a staggering 150 tonnes in November and have seen a “phenomenal” rise in India according to India’s Trade Secretary, Rajeev Kher.

A few weeks ago we said that the death of the Indian gold market was greatly exaggerated. The latest gold import data out of India confirms this.

clip_image002

The import restrictions on gold that were imposed on Indians in August of 2013 were lifted at the end of last month. Despite the fact that the restrictions were still in place gold importation in November surged an incredible 571% relative to the same month last year at over 151.58 tonnes.

This was an increase of 38 percent from 109.55 tonnes a month earlier, trade ministry data showed on Tuesday.

The Indian government had recognised the socially destructive impact of the 80:20 scheme – which obliged importers to export 20% of it’s gold imports before bringing in another shipment – by pushing business into the hands of smugglers and thereby empowering criminality while losing out on the 10% duty currently charged on all gold imports.
It had been assumed that, because demand was being met by these “informal” supplies, the relaxing of the 80:20 policy would not have a dramatic impact on gold imports into India. That remains to be seen. Smuggling networks are now well established and arguably could provide cheaper gold than government-sanctioned channels.

More…

Jim Sinclair’s Commentary

The Dollar versus the Ruble, a very interesting comparison.

clip_image004

December 16, 2014 
Castries, Saint Lucia

Last night, the Russian central bank announced a shock decision to hike up its key interest rate from 10.5% to 17%, effective immediately. Incredible.

On Monday alone the ruble declined more than 9% against the dollar, and almost 50% in 2014. It looks like a massacre.

If you listen to conventional financial news, they’ll all tell you that you’d have to be insane to own anything in Russia right now—stocks, bonds, currency, etc.

They’ll tell you that the ruble is in freefall, and that the dollar is the place to be.

But if you have been a reader of this column for any length of time, you know that I am a very data-driven person.

So… just for kicks, I decided to dive into the numbers and make an objective comparison between the US dollar and the Russian ruble.

The results might surprise you.

First of all, I start off with the premise that ALL paper currencies are fundamentally flawed.

Our global monetary system is absurd—the idea of letting unelected central bankers conjure as much money as they want to out of thin air is simply insane.

But it is true that some fiat currencies have better fundamentals than others. And if you want to understand the health of a currency, it’s imperative to look at the ISSUER of that currency, i.e. the central bank.

As with any bank, one of the most important metrics in determining a central bank’s financial health is its level of solvency.

Specifically we look at the bank’s capital (i.e. net assets) as a percentage of its total balance sheet.

The US Federal Reserve only has a basic capital ratio of 1.26%. Talk about razor thin. (This is down from 4.5% just a few years ago)

That means if the value of the Fed’s assets declines by only 1.26%, the issuer of the world’s dominant reserve currency becomes insolvent.

Now, what happens to the liabilities of an insolvent entity? They decrease in value. Just like how Greek bonds (the liabilities of the Greek government) collapsed a few years ago.

What are the Fed’s liabilities? Open your wallet. Those green pieces of paper aren’t ‘dollars’. Just look. They have “Federal Reserve Note” (i.e. debt) printed on them.

So the Fed’s pitiful financial condition directly affects the value of the dollar over the long-term.

On the other hand, the Russian central bank’s ratio is 12.5%—literally almost TEN TIMES GREATER than the Fed.

Capital cushion is crucial because when the unsuspected happens, this is what can help keep you afloat.

Think about it: you might be able to keep going without savings, perhaps even accumulating debt, but only until something happens out of the blue.

Until your car breaks down, or you need to go to the hospital, for example. Then all of a sudden, your lack of capital can become a serious issue.

Another important metric is gold. As I mentioned, since all fiat currencies are fundamentally flawed, it’s important to see the amount of REAL ASSETS that a central bank holds in reserve.

To make an apples-to-apples comparison, we look at a central bank’s GOLD reserves as a percentage of the money supply, i.e. how much gold backs the money supply.

In Russia, it’s 6.2%. And rising. Last year it was 5.5%, and the central bank is continuing to heavily stockpile more.

How much gold backs the dollar?

Precisely zero point zero percent. Zilch. Nada.

The Fed doesn’t own gold. It loudly proclaims this on its own website: “The Federal Reserve does not own gold.”

It holds ‘certificates’ which are redeemable for US dollars. But there’s not a single ounce of gold backing the US dollar.

So… with no gold and pitifully razor thin solvency levels, it really wouldn’t take much of a shock to topple the dollar.

By comparison, the ruble is much better capitalized and actually has something backing it.

Now, I’m not necessarily advocating to buy the ruble, but hard, publicly available numbers clearly demonstrate the discrepancy between “sentiment” and objective data.

And at a time when the ruble and the whole Russian economy have been beaten down so much that Apple alone is now worth more than the whole Russian stock market, Russian assets certainly make for an interesting speculation.

The bottom line, however, is—if you wouldn’t own the ruble, then what are you doing holding 100% of your assets in the dollar?

Sovereign Man’s Tim Staermose is currently on the ground in Sydney and was literally a block away when yesterday’s tragic events unfolded. Here’s his first hand account.

Until tomorrow, 
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Simon Black 
Founder, SovereignMan.com

Jim Sinclair’s Commentary

Compared to the Talking Heads, this is blasphemy.

GEAB N°90 is available ! Global systemic crisis 2015 – Oil, currencies, finance, societies, the Middle East : Massive storm in the Western port!
- Public announcement GEAB N°90 (December 15, 2014) -

For almost two years, by combining various points of view (speculative, geopolitical, technological, economic, strategic and monetary…), we have continued to anticipate a major crisis in the entire oil sector.

Today, no one doubts the fact that we are actually at that point, and the GEAB must therefore anticipate the consequences of this veritable atomic bomb, which has begun to blow up all the old system’s pillars: everything which we have known, international currencies, financial markets, the US, the Western alliance, world governance, democracy, etc.

Here, we would like to look back on a historic GEAB anticipation, that of Franck Biancheri in February 2006, which announced the beginning of the global systemic crisis under the title “the end of the West we have known since 1945” (1). It will have taken nine years for this Western world to collapse (or seven years, if we begin the process with the 2008 subprime crisis, as one should really do)… During these nine years, the GEAB has worked to educate on the crisis, with the avowed aim of raising all the existing solutions to exit it as quickly and as painlessly as possible. Apparently, outside the work carried out by the BRICS which, also anticipated by the GEAB, got through a huge task to lay down the foundations of tomorrow’s world, the Western world, meanwhile, has made some positive efforts here and there, signs of which we detect in some places. But at the end of 2014, and after the huge destabilization caused by the crash of Euro-Russian relations in the Ukrainian crisis, our team is struggling to put forward a positive scenario for the coming year.

2015 will show the complete collapse of the Western world we have known since 1945. It will be a gigantic hurricane, which will blow and rock the whole planet, but the breach points are to be found in the “Western Port”, which hasn’t been a port for a long time but, as will be clearly shown in 2015, has been in the eye of the storm in fact, as we have repeatedly said since 2006. Whilst some boats will try to head offshore, the Ukrainian crisis has had the effect of bringing some of them back to port and firmly re-mooring them there. Unfortunately, it’s the port itself which is rocking the boats and it’s those with the strongest moorings which will break up first. Of course, we are thinking of Europe first and foremost, but more so Israel, the financial markets and world governance.

Of course peace is at stake, a peace which is no more than a vain word, moreover. Ask China, India, Brazil, Iran, etc., if the West still conveys any image of peace. As for democratic values, what we show serves more as a foil than a model… to the extent that the universal principle of democracy is relegated to the value of culturally relativized concepts and finishes by serving antidemocratic agendas of all ilks, in Europe and elsewhere. Yet it’s not the democratic principle that is the problem (quite the opposite is needed to reinvent ways to apply it, in partnership with the new emerging powers), but really the West’s inability to have known how to adapt its implementation to society’s new characteristics (the emergence of supranational political entities, the Internet which is transforming the social structure..)

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Housing Permits Tumble Most Since January, Starts Miss
Tyler Durden on 12/16/2014 08:41 -0500

There goes another pillar of the sustainable growth meme. Housing Permits tumbled 5.2% MoM – the biggest drop since January (amid the Polar Vortex) to 1.035mm SAAR. Permits dropped in all regions except the Northeast. Housing Starts dropped 1.6% MoM to 1.028mm SAAR. The South was the only region with a rise in completions as the Northeast was cut in half and both single- and multi-family residences slid.

Both Starts and Permits miss, with forward-looking permits signaling notable weakness ahead.

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Here are starts broken down by single and multi-family.

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Posted at 3:17 PM (CST) by & filed under Jim's Mailbox.

Jim,

The secret to increasing consumer spending and enhancing GDP (what we’ve been trying to do for 6 years)…

The Russians have found it! A currency with no faith and trust behind it. But we’re working on it.

Consider it a "Pot of Gold at the End of the Rainbow." (unfortunately like that pot, once you get there, it’s gone).

CIGA Wolfgang

Russia Prepares For GDP Surge As Consumers Scramble To Spend Their Plunging Rubles
Submitted by Tyler Durden on 12/16/2014 – 13:40

In the most ironic twist of all amid the "currency crisis" enveloping Russia, we suspect the world’s central bankers will be looking on jealously as The CBR manages to achieve precisely what The BoJ and The Fed are desperate to achieve. In raising inflation expectations, The FT reports, Russians are hurriedly turning their depreciating Rubles into jewelry, furniture, cars, and apartments as the currency’s collapse prompts a shopping spree that will likely lead to a surge in GDP. As one anxious shopper noted, "none of us know what’s happening. We’re all worried that the currency will keep falling," and so "it’s time to buy furniture!" And sure enough, shopping centers are currently experiencing a spectacular rush.

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Hello Jim,

I read your blog on a daily basis and consider it to be the best source of commentary on the daily events and gold related news.

Following the latest developments considering Russia and the ruble, the pain and the economic devastation that was brought by the West on the Russian people, I’m wondering what Russians can do in retaliation. How can they economically "hit" the West (mainly the US I guess) in the way that it will hurt? You once said that Russia can do a great deal of damage to the US economy. I’m sorry, but I just don’t see how this can be. If you can, please share your thoughts on the matter.

Thanks!,
CIGA Lev.

PS – I myself was born in USSR

Dear Lev,

The price of oil is the most effective economic sanction that can be conceived of. It may have started politically, but the algos have gone wild. The greatest risk is the risk of war and it seems as if some element of our government favor that.

Respectfully yours,
Jim