Posted at 2:15 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Add this billionaire to the list of “gold bugs”!

Billionaire Crispin Odey, Who’s Had A Pretty Terrible Year, Is Betting Everything On Gold
August 13, 2016

It has been a violently turbulent year for bearish British billionaire (actually, as of April, he is no longer a member of the three comma club), Crispin Odey, whose hedge fund has plunged 29.9% YTD, following a 21% drop in 2015.

That’s the bad news. The good news is that the fund, which has a Sharpe ratio that will need a very big chart, was only down 4% in July when global central bank intervention went into overdrive.

Which brings us to Odey’s current investing mindset, and what he believes is the best trade for the future. Needless to say, with a gross notional allocation of 86% of his entire AUM, Odey is rather convinced that it is all about gold.

Here’s why Odey is betting it all on gold, from his latest investor letter:

Manager’s Report

There are some signs of exhaustion in the demand for gold and silver at present. The net speculative position is greater than normal and suddenly with the USA posting a higher than expected 255,000 additional new entrants to the workforce, the markets are hopeful that there will be a rate hike in September in the USA and the US dollar’s weakness might be over. Optimists are now going for a 3.8% third quarter rise in real GNP over there.

To be fair, we were wrong footed. All the sevices data out of the USA pointed to a weaker number. The second quarter GNP figure which had widely been expected to come in at +2.8% turned out to be only +1.2%. With capital spending following profits downwards and the world economy continuing to be weak, only consumer spending and bank consumer credit lending kept things going.

It is indeed ironic that the USA accuses China of growing only thanks to consumer spending and debt, when the USA is pursuing exactly the same policies. US banks in the second quarter grew their lending by 8.5% annualised, or by nearly 24% of GNP, which is following on from growing their lending by 11% last year, or nearly 30% of US GNP.
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Posted at 1:58 PM (CST) by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com (Early Sunday Release)

Dear CIGAs,

Chairman of GATA (Gold Anti-Trust Action Committee) Bill Murphy thinks financial markets are way more vulnerable than they appear. Murphy explains, “There are negative interest rates and low interest rates that just keep staying down there, and supposedly things are really good.  Look at our Dow at all-time highs, and yet something is really wrong.  Of course, this fits into the GATA premise on this whole thing.  There’s a lot of quantitative easing (money printing) and propping up of the markets, and it’s on very shaky ground.  The plug could be pulled at any time. . . . With interest rates where they are and debt growing all over the place, the reasons to be in gold are off the charts.”

Murphy says “silver is Kryptonite to central bankers” because there is little supply to use in the cartel’s suppression game.  Murphy says, “You mention the word Kryptonite and the key is what silver is doing.  It is an extraordinary situation right now. . . . It seems to me that, this year, silver is in play . . . . That is this big money talking on the JPMorgan crowd and their game.  They are gradually moving in for what I think is going to be one of the biggest market moves in history, and that is silver going to $50 (per ounce) and then a $100 (per ounce).  Basically, it’s because supply is drying up. . . . Where is all this supply coming from that this JPMorgan crowd has been feeding the market with, and I think they are hitting the wall with it.  I think this big money knows what’s going on, and they are quietly moving in.  That’s the reason silver has been trading like it has.  $18.50 was a key number.  That was the completion of a big base. . . . The next big key is to take out $20.50, but the real number is $21.   If it gets above $21, it’s going to start trading chaotically with volatile action on the upside.  The market move is going to be historic.”

Murphy has long charged there was suppression of gold and silver prices and has been proven 100% correct. He now charges, “The real key for this gold cartel, as we call it, is the suppression of the gold price.  They realized a long time ago they couldn’t have a dichotomy between the silver and gold.  So, they got involved in the silver market (to suppress the price) to make gold look like it should be doing what it is.  The problem is they are running out of physical silver to keep the price down. . . . Eventually, you are going to get a commercial signal failure in silver,  which means these so-called commercials, which is a misnomer because they are not commercials, they’re gold cartel trying to keep the silver price down.  They know when they lose control of silver, and it gets to $21 (per ounce), it will be the end of their gold suppression scheme. . . . It will be a gradual process because the price of silver is going to go bonkers.  It will show what they have been doing all these years.  I think they are finally reaching a tipping point. . . . The death knell to the gold cartel is the lack of supply of silver to keep the price down. . . . I think you are going to see the double top of $50 be taken out and go to at least $100 per ounce and maybe a lot more.  I think it’s going to move up faster than anybody can imagine. . . . Gold is going to move to some big number also. . . .If gold kept pace with inflation, it would be double what it is today.”

Click here to read the full article

Posted at 1:40 PM (CST) by & filed under General Editorial.

All,

My wife Kathryn recently completed her latest portrait “A Twist on the 20′s”. She has started a bridal portrait that she will use as a sample for several exclusive wedding venues here in Texas. She is about halfway done with the bridal portrait, I promise it will knock your socks off! She has found what she wants to paint and it fits perfectly with her desire to paint “bright”. I’ll forward to you when finished. In the meantime, if you’d like to see past works, they can be found at Kathryn Holter Fine Portraitures

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Posted at 4:13 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

I am screwed, you are screwed, we all are screwed and no one seems to care at all.

Funny Money Accounting—-Why Social Security Will Be Bankrupt In 10 Years
August 12, 2016

…Here follows a deconstruction of Rosy Scenario. It underscores why the nation’s entitlement based consumption spending will hit the shoals in the decade ahead.

In their most recent report, the so-called “trustees” of the social security system said that the trust fund’s near-term outlook had improved. So the stenographers of the financial press dutifully reported that the day of reckoning when the trust funds run dry has been put off another year—-until 2034.

The message was essentially take a breath and kick the can. That’s five Presidential elections away!

Except that is not what the report really says. On a cash basis, the OASDI (retirement and disability) funds spent $859 billion during 2014 but took in only $786 billion in tax revenues, thereby generating $73 billion in red ink.

By the trustees’ own reckoning, in fact, the OASDI funds will spew a cumulative cash deficit of $1.6 trillion during the 12-years covering 2015-2026.

So measured by the only thing that matters—-hard cash income and outgo—-the social security system has already gone bust. What’s more, even under the White House’s rosy scenario budget forecasts, general fund outlays will exceed general revenues (excluding payroll taxes) by $8 trillion over the next twelve years.

Needless to say, this means there will be no general fund surplus to pay the OASDI shortfall.
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Jim Sinclair’s Commentary

The latest from John Williams’ www.shadowstats.com

- Nominal Retail Sales Disappointed Expectations, Dropping by 0.04% (-0.04%) in July
- July PPI Services Margins Declined by 0.27% (-0.27%), Goods Prices Fell by 0.37% (-0.37%), Construction Costs Plunged by 0.61% (-0.61%), Total Final Demand PPI Was Down by 0.36% (-0.36%)
- Yet, Across-the-Board Deflation Generally Is Not the Common Experience
- In What Will Become an Increasingly Regular Pattern, Initial Market Response to the Intensifying Economic Downturn Will Be a Weaker Dollar and Higher Gold, Silver and Oil Prices

“No. 825: July Nominal Retail Sales, Producer Price Index, Consumer Conditions ”

www.shadowstats.com

Posted at 11:52 PM (CST) by & filed under In The News.

DEA regularly mines Americans’ travel records to seize millions in cash
Brad Heath, USA TODAY8:33 p.m. EDT August 10, 2016

WASHINGTON — Federal drug agents regularly mine Americans’ travel information to profile people who might be ferrying money for narcotics traffickers — though they almost never use what they learn to make arrests or build criminal cases.

Instead, that targeting has helped the Drug Enforcement Administration seize a small fortune in cash.

DEA agents have profiled passengers on Amtrak trains and nearly every major U.S. airline, drawing on reports from a network of travel-industry informants that extends from ticket counters to back offices, a USA TODAY investigation has found. Agents assigned to airports and train stations singled out passengers for questioning or searches for reasons as seemingly benign as traveling one-way to California or having paid for a ticket in cash.

The DEA surveillance is separate from the vast and widely-known anti-terrorism apparatus that now surrounds air travel, which is rarely used for routine law enforcement. It has been carried out largely without the airlines’ knowledge.

It is a lucrative endeavor, and one that remains largely unknown outside the drug agency. DEA units assigned to patrol 15 of the nation’s busiest airports seized more than $209 million in cash from at least 5,200 people over the past decade after concluding the money was linked to drug trafficking, according to Justice Department records. Most of the money was passed on to local police departments that lend officers to assist the drug agency.

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Bill Holter’s Commentary

…it doesn’t matter who you vote for, it matters “who” counts the votes!

Princeton Professor Shows How Easy it Is to Hack an Election in Just 7 Minutes
Claire Bernish August 7, 2016

A professor from Princeton University and a graduate student just proved electronic voting machines in the U.S. remain astonishingly vulnerable to hackers — and they did it in under eight minutes.

In fact, Professor Andrew Appel and grad student Alex Halderman took just seven minutes to break into the authentic Sequoia AVC Advantage electronic voting machine Appel purchased for $82 online — one of the oldest models, but still in use Louisiana, Pennsylvania, New Jersey, and Virginia, Politico reported.

After Halderman picked the hulking, 250-pound machine’s lock in seven seconds flat, Appel wrested its four ROM chips from a circuit board — an easy feat, considering the chips weren’t soldered in place.

Once freed, Appel could facilely replace the ROM chips with his own version “of modified firmware that could throw off the machine’s results, subtly altering the tally of votes, never to betray a hint to the voter,” Politico’s Ben Wofford explained.

Appel and a team of other so-called cyber-academics have hacked into various models of electronic voting machines in order to prove to the public the equipment is ridiculously bereft of security. Together with Ed Felten, Appel and a group of Princeton students “relentlessly hacked one voting machine after another … reprogramming one popular machine to play Pac-Man; infecting popular models with self-duplicating malware; [and] discovering keys to voting machine locks that could be ordered on eBay.”

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Posted at 11:48 PM (CST) by & filed under USAWatchdog.com.

Dear CIGAs,

So, is the world headed for a “Mad Max” future? Financial writer Bill Holter says, “I think the chances are better than a coin flip that we have societal breakdown. If you are asking should you hold cash, my opinion is yeah, you should have some cash and very little bank balances because that is going to go away. You are going to have to have some physical cash, which will actually . . . after the system shuts down, become more valuable. The dollar will purchase more real goods for several weeks simply because if all the banks are closed and nobody has cash, then cash is scarce. That will work up until, all of a sudden, the light switch gets flipped and people understand that cash has no real value. People are not going to trade real eggs or real tomatoes for dollars. They will say I want something real for something real. That’s where your dollar collapses.”

On gold, the math is simple. Holter says, “The punchline to this is the system has never been risker and more leveraged than it is today. Yet, the price or the cost of insurance (gold and silver) has never been cheaper than it is today with the exception of late last year in October, November and December of 2015.”

Holter goes on to point out, “They have purposely diluted the price of gold in order to portray a strong dollar. . . . The reason they need to portray a strong dollar is to continue confidence in the system. It allows dollars to continue to be accepted. It also allows the U.S. Treasury to turn around and continue to borrow. That’s not working so well because the Federal Reserve has had to step up and buy major portions of auctions.”

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Posted at 10:30 AM (CST) by & filed under General Editorial.

A liberal’s paradise would be a place where everybody has guaranteed employment, free comprehensive healthcare, free education, free food, free housing, free clothing, free utilities, and only law enforcement has guns.  And believe it or not, such a place does indeed already exist: It’s called Prison.

Sheriff Joe Arpaio

 

Jim Sinclair’s Commentary

Has anyone checked Daddy War-bucks?

Audit Reveals The Pentagon Doesn’t Know Where $6.5 Trillion Dollars Has Gone
August 8th, 2016

A new Department of Defense Inspector General’s report, released last week, has left Americans stunned at the jaw-dropping lack of accountability and oversight. The glaring report revealed the Pentagon couldn’t account for $6.5 trillion dollars worth of Army general fund transactions and data, according to a report by the Fiscal Times.

The Pentagon, which has been notoriously lax in its accounting practices, has never completed an audit, would reveal how the agency has specifically spent the trillions of dollars allocated for wars, equipment, personnel, housing, healthcare and procurements allotted to them by Congress.

Beginning in 1996 all federal agencies were mandated by law to conduct regular financial audits. However, the Pentagon has NEVER complied with that federal law. In 20 years, it has never accounted for the trillions of dollars in taxpayer funds it has spent, in part because “fudging” the numbers has become standard operating procedure at the Department of Defense, as revealed in a 2013 Reuters investigation by Scot Paltrow.

According to the report by the Fiscal Times:

An increasingly impatient Congress has demanded that the Army achieve “audit readiness” for the first time by Sept. 30, 2017, so that lawmakers can get a better handle on military spending. But Pentagon watchdogs think that may be mission impossible, and for good reason…

The Defense Finance and Accounting Service (DFAS), the behemoth Indianapolis-based agency that provides finance and accounting services for the Pentagon’s civilian and military members, could not provide adequate documentation for $6.5 trillion worth of year-end adjustments to Army general fund transactions and data.

The DFAS has the sole responsibility for paying all DOD military and personnel, retirees and annuitants, along with Pentagon contractors and vendors. The agency is also in charge of electronic government initiatives, including within the Executive Office of the President, the Department of Energy and the Departing of Veterans Affairs.

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Bond Market’s Big Illusion Revealed as U.S. Yields Turn Negative – Bloomberg
August 7th, 2016

For Kaoru Sekiai, getting steady returns for his pension clients in Japan used to be simple: buy U.S. Treasuries.

Compared with his low-risk options at home, like Japanese government bonds, Treasuries have long offered the highest yields around. And that’s been the case even after accounting for the cost to hedge against the dollar’s ups and downs — a common practice for institutions that invest internationally.

It’s been a “no-brainer since forever,” said Sekiai, a money manager at Tokyo-based DIAM Co., which oversees about $166 billion.

That truism is now a thing of the past. Last month, yields on U.S. 10-year notes turned negative for Japanese buyers who pay to eliminate currency fluctuations from their returns, something that hasn’t happened since the financial crisis. It’s even worse for euro-based investors, who are locking in sub-zero returns on Treasuries for the first time in history.

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