Jim Sinclair’s Commentary
The latest from John Williams.
- Still No Relief Pending for the Economy or the Financial System
- Changes in 2013 Real Median Household Income and Income Dispersion Were Not Statistically Significant
- Stagnant Real Median Income Held at Post-Recession Low, Down 8.0% from Pre-Recession Peak, Lowest Since 1994, Below Levels of Late-1960s and Early-1970s
- Income Variance Held at Historic High, Suggestive of Still-Greater Economic and Financial Crises Ahead
- August Annual PPI Inflation Notched Higher
"No. 658: Annual Income Survey, August PPI"
Pentagon: US ground troops may join Iraqis in combat against Isis
Defense Secretary Chuck Hagel and General Martin Dempsey refuse to rule out greater role for US ‘advisers’ if airstrikes
Spencer Ackerman in New York
theguardian.com, Tuesday 16 September 2014 14.50 EDT
Secretary of defence Chuck Hagel and Army General Martin Dempsey before the Senate armed services committee.
The Pentagon leadership suggested to a Senate panel on Tuesday that US ground troops may directly join Iraqi forces in combat against the Islamic State (Isis), despite US president Barack Obama’s repeated public assurances against US ground combat in the latest Middle Eastern war.
A day after US warplanes expanded the war south-west of Baghdad, Army General Martin Dempsey, the chairman of the Joint Chiefs of Staff, told the Senate armed services committee that he could see himself recommending the use of some US military forces now in Iraq to embed within Iraqi and Kurdish units to take territory away from Isis.
“If we reach the point where I believe our advisers should accompany Iraqi troops on attacks against specific [Isis] targets, I will recommend that to the president,” Dempsey said, preferring the term “close combat advising”.
It was the most thorough public acknowledgement yet from Pentagon leaders that the roughly 1,600 US troops Obama has deployed to Iraq since June may in fact be used in a ground combat role, something Obama has directly ruled out, most recently in a televised speech last week.
Dempsey, who has for years warned about the “unintended consequences” of Americanizing the Syrian civil war that gave rise to Isis, said he envisioned “close combat advising” for operations on the order of taking Mosul, Iraq’s second largest city, away from Isis.
Jim Sinclair’s Commentary
The banksters and central planners are starting to get a little concerned about the separatist movement gaining traction in their attempts to brake the bonds of tyranny.
Spain Threatens to Block Vote in Catalonia
By Dow Jones Business News, September 16, 2014, 11:45:00 AM EDT
MADRID–Spain said it would use "the full force of the law" to block a planned nonbinding referendum on independence in Catalonia, including a suspension of the regional government’s ruling authority if necessary.
The warning Tuesday by Foreign Minister José Manuel García-Margallo was one of strongest by the Madrid government against a proposed Nov. 9 vote in the wealthy industrial region. It was made as Catalan leaders debated a backup plan should the vote be blocked–an early election of the region’s parliament that would test support for political parties seeking independence.
Mr. Garcia Margallo was asked specifically whether the central government’s options in dealing with the separatists included invoking article 155 of the Spanish constitution, which allows Madrid to supersede the authority of a regional government that is acting outside the law.
"Include what has to be included so that the referendum isn’t held," Mr. Garcia Margallo responded, at an event hosted by the Europa Press Agency. He said Catalonia couldn’t unilaterally take a decision that affected the country as a whole. "Each and every Spaniard is the owner of each and every square centimeter of the country," he said.
Mr. García Margallo spoke two days before an independence referendum in Scotland, where the strength of the separatist campaign is buoying separatists in Catalonia and unsettling the Spanish government. Polls indicate the Scottish contest is tightening, prompting the government in London to offer the Scots concessions permitting greater home rule.
By contrast, the Spanish government has adopted a more adversarial stance with Catalonia, saying it would sue to block the referendum in Spain’s Constitutional Court and declining to offer the region inducements to stay in Spain. Catalan secessionists say the central government drains all of its resources. Madrid maintains the region is treated fairly and benefits from the union.
Obama says Ebola outbreak a ‘global security threat’
16 September 2014 Last updated at 17:14 ET
President Barack Obama has called the West Africa Ebola outbreak "a threat to global security" as he announced a larger US role in fighting the virus.
"The world is looking to the United States," Mr Obama said, but added the outbreak required a "global response".
The measures announced included ordering 3,000 US troops to the region and building new healthcare facilities.
Ebola has killed 2,461 people this year, about half of those infected, the World Health Organization said.
The announcement comes as UN officials have called the outbreak a health crisis "unparalleled in modern times".
The spread of the disease means the funds needed to fight the outbreak have increased 10-fold in the past month, the UN’s Ebola co-ordinator said, saying it needs $1bn (£614m) to fight the outbreak.
Scotland Prepares For Bank Runs; ‘Quietly’ Sends Millions Of Banknotes North
Tyler Durden on 09/16/2014 08:57 -0400
As the Scotish independence vote draws near and remains too close to call, some analysts are suggesting Plan B for Scotland may be to choose to opportunistically default. This has done nothing to calm concerns of the aftermath of a "yes" vote – despite US asset managers proclaiming it irrelevant. Nowhere is that more clear than, as The Independent reports, Britain’s banks have been quietly moving millions of banknotes north of the border to cope with any surge in demand by Scots to withdraw cash in the event of a Yes vote in Thursday’s independence referendum, it has emerged. Bankers stressed there has been no sign yet of any increase in the amount of withdrawals from deposit accounts or ATMs, but the moves have been taking place over the past week or so in order to make sure ATMs do not run out on Friday in the event of a panic reaction to a “yes” vote.
As The Independent reports,
Britain’s banks have been quietly moving millions of banknotes north of the border to cope with any surge in demand by Scots to withdraw cash in the event of a Yes vote in Thursday’s independence referendum, it has emerged.
Sources told The Independent the moves have been taking place over the past week or so in order to make sure ATMs do not run out on Friday in the event of a panic reaction to a “yes” vote. There have been some suggestions that people will want to move their money to English banks in the event of an independence vote.
Jim Sinclair’s Commentary
Good for gold out of India and China this week.
China May Boost Gold Reserves Amid Imbalances in Holdings
By Bloomberg News Sep 15, 2014 10:59 PM ET
China may join other emerging countries in boosting gold reserves as the precious metal makes up a smaller share of its foreign-exchange holdings compared with developed economies, said a London-based researcher.
The country hasn’t announced any changes to state gold reserves since authorities in 2009 said holdings totaled 1,054.1 metric tons. While China holds the world’s biggest foreign-exchange reserves, bullion accounts for 1.1 percent of the total, compared with about 70 percent for the U.S. and Germany, the biggest gold holders, World Gold Council data show.
“It is clear that western central banks over time will be reducing their reserves and China and other Asian countries will be increasing,” David Marsh, managing director at the Official Monetary and Financial Institutions Forum, said in a Sept. 11 interview in Beijing. “Gold will become more traded amongst central banks in the next 30 years because there are colossal imbalances in world gold holdings as a percentage of overall asset reserves.”
Central banks, net buyers of gold for 14 straight quarters, helped limit bullion’s losses last year that were the most since 1981 and may increase purchases to as much as 500 tons this year after adding 409 tons last year, the London-based council said Aug. 14. The precious metal rose 3 percent this year as geopolitical tensions boosted demand for a haven.
Bullion for immediate delivery climbed 0.3 percent to $1,237.04 by 10:44 a.m. in Beijing, according to Bloomberg generic pricing. The metal fell 28 percent last year, the biggest annual decline in more than three decades, and is down 36 percent from a record $1,921.17 reached on Sept. 6, 2011.
US launches first ‘offensive’ airstrike on ISIS near Baghdad
Published time: September 15, 2014 23:43
Edited time: September 16, 2014 13:48
The United States launched at least one airstrike against Islamic State militants near Baghdad on Monday, marking the expansion of the US military campaign against the extremist group. The airstrike was reportedly requested by Iraqi forces under attack.
According to US officials cited by the Associated Press, the airstrike was authorized after Iraqi security forces requested air power support as they engaged Islamic State (IS) fighters south of Baghdad.
An unnamed defense official, meanwhile, told NBC News that the most recent air attack near Baghdad was an “offensive” strike, and there was no suggestion that militants were making headway towards the country’s capital.
US Central Command confirmed the air strike and affirmed that it was part of a new phase in the battle against IS.
Previous airstrikes in Iraq were characterized by the US as “defensive” in nature, as they were used to protect American diplomatic sites as well as crucial Iraqi facilities like the Mosul Dam.
By directly supporting Iraqi forces from the air as they participated in what ABC News described as a “firefight,” officials say the US is beginning to act on President Barack Obama’s strategy to actively engage the Islamic State (IS). As Obama announced last week, his plan is to “degrade and ultimately destroy” the group through expanded airstrikes and by forming a coalition against it.
Ukraine and EU ratify landmark Association Agreement
Published time: September 16, 2014 10:19
Edited time: September 16, 2014 13:03
Ukraine and the EU parliaments simultaneously ratified the economic and political parts of the Association Agreement that will strengthen ties between Kiev and Brussels. Economic integration is postponed until the end of 2015.
The document was approved at 1:00pm in Kiev and there was a synchronous signing session in the European Parliament in Strasbourg.
Ukraine’s Rada voted 355 votes in favor out of 381 total, and the European Parliament supported the ratification with 535 ‘yes’ votes and 127 against, with 26 abstaining.
What is the Association Agreement between Ukraine and the EU?
- Establishes a gradual deepening of economic and political ties between Ukraine and the EU
- A free trade zone will be established on December 31, 2015 to integrate Ukraine into Europe’s $17 trillion economy with 500+ million consumers
- This means Ukraine will lose preferential treatment and access to Russia’s $2.5 trillion and 146 million consumer market
- Ukraine will have to meet EU requirements on food safety and product quality
- Cooperate on several other issues: energy, industry, taxes, tourism, justice system, law, etc.
- It will make it easier for Ukraine to seek financial assistance from the EU
“From tomorrow I task the government with approving the implementation of the agreement and immediately implementing it into the force of law,” President Petro Poroshenko said at the ratification in Kiev. Poroshenko said he hopes the agreement will help Ukraine reform its economy and fight corruption, and that someday Ukraine hopes to apply for EU membership.
Jim Sinclair’s Commentary
This is a long term tradition in the financial world.
Investigators turn bankers into informants in forex probe – WSJ
Mon Sep 15, 2014 4:55pm BST
(Reuters) – U.S. investigators have turned several bank employees into informants to gather evidence against some of their colleagues in the probe of possible manipulation of currency markets, the Wall Street Journal reported, citing people familiar with the matter.
Britain’s Financial Conduct Authority (FCA) and U.S. regulators are investigating allegations that dealers at major banks colluded and manipulated key reference rates in the $5.3 trillion-a-day foreign currency market, the world’s biggest and least regulated.
Investigators from the U.S. Justice Department and Federal Bureau of Investigation (FBI) are preparing to seek criminal charges against individual traders as early as next month, the Journal said.
Leslie Caldwell, head of the Justice Department’s criminal division, told Reuters last week it was using more body wires and wiretaps to gather evidence in investigations.
Caldwell also indicated that there may not be any prosecutions this year in the foreign exchange probe.
"I think it’s too early to tell. We’re looking at the evidence, and we’re still working very hard, and there is a lot left to do, so I think it’s too soon to say," he said.
The Journal report said it isn’t clear which banks had secret informants cooperating with the government investigation.
Ethical standards in the foreign exchange market have been put under the spotlight since investigators in the United States, Europe and Asia started examining whether small groups of traders colluded to rig prices by sharing information about their clients’ orders.
Can the West defeat Isil?
The Big Question: Five reasons why the West will not find it easy to defeat Isil
By Bill Park, King’s College London
6:30PM BST 15 Sep 2014
An international coalition aimed at defeating the threat posed by the Islamic State of the Levant (Isil), "however long it takes", is taking shape. Arab states will join with Nato and other western countries, the Kurdistan Regional Government’s (KRG) peshmerga are receiving help from western countries and Iran, and Iranian advisers are on the ground throughout Iraq.
Even in light of last week’s increased CIA estimate, that Isil numbers around thirty thousand fighters – many of them novices to the battlefield – this looks to be an unequal fight. Isil is surely facing imminent defeat.
If only it were that simple. This burgeoning coalition is incomplete, brings together some strange bedfellows, contains mixed and conflicting agendas, varying degrees of commitment, intellectual confusion, and more than a dash of dishonesty.
As a consequence, there are five reasons why Isil might not be so easily banished:
1. Isil has exploited Sunni grievances in Iraq and Syria
First, the West has misunderstood the extent to which Isil has exploited Sunni grievances in Iraq and Syria, and relied on local Sunni ‘allies’ to do much of the fighting. Mosul fell to indigenous Islamicised former Ba’athists rather than to a bunch of Isil chancers.
The Ba’athists were supported by local Sunni tribes who were angry at their marginalisation by Nouri al-Maliki’s Shia-led Baghdad government. This was true in Anbar province too, which in early 2014 Baghdad lost to a similar local coalescence of Isil, tribal, and ex-Ba’athist elements. We should also not overlook the extent to which local Sunni Arabs turned against their Yazidi, Christian, Turkmen and Kurdish Iraqi neighbours.
In the struggle to topple neighbouring Syria’s Assad regime, the West drew back from arming the (Sunni) opposition due to its fractiousness and the jihadist elements it contained. This may have been sensible, but it left a vacuum that the more ruthless jihadists could exploit, and was used to ‘prove ‘ the west’s indifference. Many al-Qaeda and Free Syrian Army (FSA) fighters have long since joined with Isil’s more formidable campaign.
Jim Sinclair’s Commentary
This is how the embarrassment of bread lines is avoided, and votes garnered.
Food-stamp enrollment in Illinois outpaces job creation by nearly 2-to-1
10 Sep 2014 | Michael Lucci
Illinois’ sluggish jobs recovery is coming at a tremendous cost. For every post-recession job created in Illinois, nearly two people have enrolled in the Supplemental Nutrition Assistance Program, commonly known as food stamps.
In the recession era, the number of Illinoisans dependent on food stamps has risen by 745,000. Without adequate job creation in the state, Illinois families have had no choice but to depend upon food stamps to put bread on the table.
The Prairie State has had the worst recovery from the Great Recession of any state in the U.S. There are nearly 300,000 fewer Illinoisans working today than in January 2008, and 170,000 fewer payroll jobs.
Ebola outbreak: US to send 3,000 troops to west Africa to fight epidemic
Regional centre in Liberia will coordinate efforts to train health workers and build treatment centres to help tackle crisis
theguardian.com, Tuesday 16 September 2014 11.06 E
The US said it would send 3,000 troops to help tackle the Ebola epidemic that has raged for nine months, overwhelming fragile health systems in Guinea, Liberia and Sierra Leone.
A regional centre run by the US army in Monrovia, the capital of Liberia, where the outbreak is spiralling out of control fastest, will coordinate efforts to build more than a dozen treatment centres and train thousands of healthcare workers.
More than 2,400 people have died from the deadly virus, for which there is no approved cure. A handful of cases have been recorded in Nigeria and Sierra Leone. All 26 previously recorded outbreaks have been successfully contained largely by isolating patients, but the World Health Organisation said on Tuesday that cases will continue to rise for at least six more months in an epidemic that has jumped borders and erupted in urban areas.
WHO said about $987.8m (£609m) is needed for everything from paying health workers and buying supplies to tracing people who have been exposed to the virus, which is spread by contact with bodily fluids like blood, urine or diarrhoea.
Foreign medical teams with up to 600 experts, as well as at least 10,000 local health workers, are needed to stem the outbreak, the global health body has said.
About $23.8m is needed to pay burial teams and buy body bags, since the bodies of Ebola victims are highly infectious and workers must wear protection suits.
Scotland Gold Demand Seen Rising Before Independence Vote
By Nicholas Larkin Sep 16, 2014 6:32 AM ET
Scottish demand for gold as a protection of wealth has increased before a referendum this week on independence, according to GoldCore Ltd., a brokerage that sells and stores bullion coins and bars.
Demand from Scotland so far this month is 59 percent above the three-month average and 91 percent more than a year earlier, Mark O’Byrne, a director at GoldCore in Dublin, which has more than $200 million in bullion under management, said by e-mail today. Purchases also gained from England and Wales, both from existing clients as well as new customers, he said.
Campaigning for the Sept. 18 referendum on the 307-year-old union is nearing its climax, with three of the four polls published at the weekend showing the “no” campaign ahead, while the fourth put the pro-independence push ahead by the biggest ever margin. The pound slipped to an almost 10-month low against the dollar last week.
“With continued sterling volatility and uncertainty about the future of the pound in the short term and possibly for the foreseeable future, the Scottish independence question is a major macroeconomic and monetary risk to the U.K.,” O’Byrne said. “They are parking some money in gold due to concerns about the outcome of the Scottish referendum.”
Gold for immediate delivery rose 3.1 percent to $1,238.73 an ounce in London this year, according to Bloomberg generic pricing. Denominated in sterling, the metal gained 5.2 percent to 765.55 pounds an ounce. Scotland accounts for the second-largest share of GoldCore’s customers, after Ireland.