Posted at 11:50 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Mr. Williams shares his latest with us.

- October Housing Starts Indicated Fourth-Quarter Contraction 
- PPI Headline Inflation of 0.2% Reflected Peculiarities of New Reporting Approach 
- October PPI Will Dampen Real Growth in New Orders for Durable Goods and Construction Spending

"No. 675: October Housing Starts, PPI" 


U.S. MINT REPORTS ON SILVER EAGLES: Huge Demand & Weekly Rationing
by SRSrocco on November 19, 2014

After the huge take-down in the price of silver on October 31st, demand for Silver Eagles skyrocketed.  Then on Nov. 5th after silver was knocked down another 5%, the U.S. Mint suspended sales of Silver Eagles.

It was reported that the U.S. Mint sold 2 million Silver Eagles on Nov. 5th before they suspended sales.  However, we didn’t see a huge increase in sales on their website for that day.  So, I decided to contact Michael White, Public Affairs person for the U.S Mint and ask him about this issue as well as some other questions.

Mr. White provided me that actual sales figures from Oct 31st to Nov. 18th.  These sales figures can be seen in the chart below:


On Halloween, Oct. 31st when Zombies knocked the price of silver down 4%, the U.S Mint sold 1,425,000 Silver Eagles that day.  After the weekend, Silver Eagle sales on Monday, Nov 3rd were a hefty 625,000.  As the price of silver trended lower on Tuesday, the U.S. Mint sold another 430,000 on Nov. 4th.

And then on Nov 5th, with the paper price of silver down 5%, demand for Silver Eagles increased to a level that totally wiped out all remaining Silver Eagle inventories at the U.S. Mint.  We must remember, there are Authorized Dealers who purchase Silver Eagles directly from the U.S. Mint to sell as retail or to wholesale dealers.


Deformations On The Dealer Lots: How The Fed’s ZIRP Is Fueling The Next Subprime Bust
by David Stockman November 19, 2014

On any given day, Janet Yellen is busy squinting at 19 essentially meaningless labor market graphs on her “dashboard”, apparently looking for evidence that ZIRP is working. Well, after 71 months of zero money market rates—-an unprecedented financial absurdity—-there are plenty of footprints dotting the financial landscape.

But they have nothing to do with sustainable jobs. Instead, ZIRP has fueled myriad financial bubbles and speculations owing to the desperate scramble for “yield” that it has elicited among traders and money managers. Indeed, the financial system is literally booby-trapped with accidents waiting to happen owing to the vast mispricings and bloated valuations that have been generated by the Fed’s free money.

Nowhere is this more evident than in the subprime auto loan sector. That’s where Wall Street speculators have organized fly-by-night lenders who make predatory 20% interest rate loans at 115% of the vehicle’s value to consumers who are essentially one paycheck away from default.

This $120 billion subprime auto paper machine is now driving millions of transactions which are recorded as auto “sales”, but, in fact, are more in the nature of short-term “loaners” destined for the repo man. So here’s the thing: In an honest free market none of these born again pawnshops would even exist; nor would there be a market for out-of-this-world junk paper backed by 115% LTV/75-month/20% rate loans to consumers who cannot afford them.

Indeed, instead of the BLS concocted “quit rate” and other such aggregated data noise about the nation’s massive, fragmented, dynamic and complicated complex of thousands of local and sectoral labor markets—- about which the Fed can and should do nothing—-Yellen might be gazing at the $1.6 billion in bids attracted earlier this year by Prestige Financial Services of Utah. That occurred in the junk bond market, which the Fed does heavily impact, and could not have possibly happened in the absence of ZIRP.


Jim Sinclair’s Commentary

The Flash Boys (mechanized high speed traders) are going to be the real Black Swans that breaks the system.

Flash Boys Raise Volatility in Wild New Treasury Market
By Susanne Walker and Lisa Abramowicz Nov 17, 2014 5:45 PM MT

In a flash, the bond market went wild.

What began on Oct. 15 as another day in the U.S. Treasury market suddenly turned into the biggest yield fluctuations in a quarter century, leaving investors worrying there will be turbulence ahead.

The episode exposed a collision of forces — the rise of high-frequency trading and the decline of Wall Street dealers — that are reshaping the world’s biggest and most important bond market. Money managers say the $12.4 trillion Treasury market is becoming less liquid, meaning securities can no longer be traded as quickly and easily as they used to be, thanks in part to the Federal Reserve’s bond-buying program.

“The way the market is set up right now, we’ll see instances like we did on that day,” said Michael Lorizio, senior trader at Boston-based Manulife Asset Management US LLC, which oversees $281 billion. “There’s going to be a learning curve as to how to handle that.”

The development reflects unintended consequences of new financial regulation, as well as steps the Fed has taken to breathe life into the U.S. economy. The implications, however, extend far beyond Wall Street, because the Treasury market determines borrowing costs for governments, companies and consumers around the world.

When the day began on Oct. 15, an unprecedented number of investors were betting that interest rates would rise and U.S. government debt would lose value. The news that morning seemed ominous. Ebola was spreading. So was war in the Middle East. At 8:30 a.m. in Washington, the Commerce Department announced a decline in retail sales.

Buy Quickly

The shift came all at once. The sentiment that the Fed would raise rates reversed. Traders who’d bet against, or shorted, Treasury bonds had to buy as many as they could as quickly as they could to limit their losses. By 9:38 a.m., 10-year Treasury yields plunged 0.34 percentage point, the most in five years.


Posted at 11:07 AM (CST) by & filed under Jim's Mailbox.


Certainly not dissimilar to the French Revolution. "Let them eat cake."

No water… no life!

When people are starved and destitute, there is no other avenue left to take but revolution.

A dangerous game being played here.

CIGA Wolfgang

Russia Warns Of Military Assault On The East
Wednesday November 19, 2014 4:34 AM

MOSCOW (AP) — Russia’s foreign policy chief on Wednesday claimed that Ukraine’s decision to freeze budget payments to the eastern rebel-held territories could be a precursor to a military onslaught.

Ukrainian officials announced earlier this month that they will freeze the $2.6 billion in state support to the areas now in rebel hands, which could further worsen the deplorable economic situation there.

In an address to the parliament, Russian Foreign Minister Sergey Lavrov voiced his suspicions that by doing so, Kiev is "preparing the ground for another invasion in order to solve the issue by force."


Posted at 1:06 PM (CST) by & filed under In The News.



Ukraine Admits Its Gold Is Gone: "There Is Almost No Gold Left In The Central Bank Vault"
Submitted by Tyler Durden on 11/18/2014 11:47 -0500

Back in March, at a time when the IMF reported that Ukraine’s official gold holdings as of the end of February, so just as the State Department-facilitated coup against former president Victor Yanukovich was concluding, amounted to 42.3 tonnes or 8% of reserves…


… and notably under the previous "hated" president, Ukraine gold’s reserves had constantly increased hitting a record high just before the presidential coup…


… we reported of a strange incident that took place just after the Ukraine presidential coup, namely that according to at least one source, "in a mysterious operation under the cover of night, Ukraine’s gold reserves were promptly loaded onboard an unmarked plane, which subsequently took the gold to the US." To wit:

Tonight, around at 2:00 am, an unregistered transport plane took off took off from Boryspil airport. According to Boryspil staff, prior to the plane’s appearance, four trucks and two cargo minibuses arrived at the airport all with their license plates missing. Fifteen people in black uniforms, masks and body armor stepped out, some armed with machine guns. These people loaded the plane with more than forty heavy boxes.


Russell – Stock Market Crash, Gold & Eventual Hyperinflation

With historic events taking place around the globe, the Godfather of newsletter writers, 90-year old Richard Russell, covered everything from a stock market collapse, to gold, hyperinflation, and massive numbers of homeless people in New York.  The 60-year market veteran also included a fantastic chart to go along with his outstanding commentary.

“On the news that Japan is back in recession, the Central Bank of Japan countered the news with a massive explosion in quantitative easing. On this news, Japan’s yen semi-crashed.

The stock market in the US continues with its bullish progression, a sell signal, little downward follow-through, and then either the Dow or the Transports goes to a new high. Today, with 50 minutes to the close, the Dow is well on its way to recording a new record high.”

Russell also included this quick note from Dennis Gartman:


Regulators Call for Takata Airbag Recall to Be Extended Nationwide

Federal auto safety regulators on Tuesday called on automakers to conduct a nationwide recall of vehicles that contain driver-side airbags made by the Japanese supplier Takata.

The nationwide move urged by the National Highway Traffic Safety Administration would expand a recall that has been limited to two states and two territories associated with high humidity. If automakers do not agree to expand the recall, the agency said, it will “use the full extent of its statutory powers” to compel them to do so.

The agency said it had yet to put together a detailed list of the models or model years affected. But the expansion affects “millions” of Ford, Honda, Chrysler, Mazda and BMW cars, David J. Friedman, deputy administrator of the agency, said during a conference call with reporters.

The agency said a recent airbag failure outside the regional recall area had prompted it to take the action.

The airbags contain a propellant that can cause them to explode when they deploy, spraying shrapnel from the casing into the car’s cabin and potentially injuring the driver or passenger. It is more likely to happen if the propellant becomes moist.


Russia, China seek to form Asia-Pacific collective security system — defense minister
November 18, 15:28 UTC+3

BEIJING, November 18. /TASS/. Defense ministries of Russia and China seek to form a regional collective security system in the Asia-Pacific region, Russian Defense Minister Sergey Shoigu said on Tuesday after talks with his Chinese counterpart Colonel General Chang Wanquan in Beijing.

According to the Russian defense minister, Russia and China are concerned over US attempts to strengthen its military and political clout in the Asia-Pacific Region (APR).

“During talks with Comrade Chang Wanquan, we discussed the state and prospects of the Russian-Chinese relations in the military field, exchanged opinions on the military-political situation in general and the APR in particular,” Shoigu said.

“We also expressed concern over US attempts to strengthen its military and political clout in the APR,” he said. “We believe that the main goal of pooling our effort is to shape a collective regional security system.”

Russia, China to hold joint naval drills in Pacific, Mediterranean in 2015

Sergey Shoigu announced that Russia and China will hold joint naval drills in the Pacific and in the Mediterranean in 2015.


Posted at 12:46 PM (CST) by & filed under Jim's Mailbox.

Hello Jim,

In Thailand I can watch Chinese TV.

I want to inform you regarding the APEC meeting in China as portrayed on Chinese TV. A "news" show gives 1.5 minutes to report on the APEC meeting. About one-third of it is the BRICs sitting together, then photo ops together, all smiles and hand holding showing a happy group united, then more BRIC reports. So the APEC meeting to the Chinese is mainly about BRICs. The new, new world order, eh what?

The Chinese viewers will likely see the BRICs as the stronger future. Oh ya.


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

Jim Sinclair’s Commentary

The latest from John Williams.

- Unexpected Production Decline Was on Top of Downside Revisions
- Annual Growth Dropped to Six-Month Low
- Implied Fourth-Quarter Production Pace Slowed Sharply
- Continued Contractions in, and Downside Revisions to, Auto Production Should Hammer Inventory and Third- and Fourth-Quarter-GDP Estimates

"No. 674: October Industrial Production"

Industrial Production Drops; Auto Manufacturing Slumps 3rd Month In A Row – Worst Run In 5 Years
Tyler Durden on 11/17/2014 09:27 -0500

Driven by a combination of Mining (-0.9% – biggest drop in a year), Utilities (-0.7% led by a 3.2% plunge in Natural Gas) and most of all motor vehicle manufacturing (-1.2%), US Industrial Production slid 0.1% in October (notably missing expectations of a 0.2% rise). This is the 3rd monthly drop in motor vehicle & parts production – the worst consecutive run since Jan 2009. It seems the government-free-credit inspired subprime auto boom that provided just enough impetus to a fragilee conomy to enable the Fed narrative of "things are better" to play out… has ended… abruptly.

Industrial Production drops, missing notably.


Worst auto production run since Jan 09



3 Billion Gallons Of Fracking Wastewater Pumped Into Clean California Aquifiers: "Errors Were Made" State Admits
Submitted by Tyler Durden on 11/17/2014 – 13:07

Dear California readers: if you drank tapwater this morning (or at any point in the past few weeks/months), you may be in luck as you no longer need to buy oil to lubricate your engine: just use your blood, and think of the cost-savings. That’s the good news. Also, the bad news, because as the California’s Department of Conservation’s Chief Deputy Director, Jason Marshall, told NBC Bay Area,California state officials allowed oil and gas companies to pump up to 3 billion gallons (call it 70 million barrels) of oil fracking-contaminated waste water into formerly clean aquifiers, aquifiers which at least on paper are supposed to be off-limits to that kind of activity, and are protected by the government’s EPA – an agency which, it appears, was richly compensated by the same oil and gas companies to look elsewhere. And the scariest words of admission one can ever hear from a government apparatchik: "In multiple different places of the permitting process an error could have been made."


ECB could buy gold to revive economy
Declining economic data may "theoretically" leave the door open for the European Central Bank to buy assets including gold and shares
By Peter Spence, Economics Correspondent
10:00AM GMT 17 Nov 2014

Gold, shares, and exchange-traded funds (ETFs) – the European Central Bank (ECB) may turn to buying any or all of these in an attempt to boost inflation in the currency bloc.

Yves Mersch, a member of the ECB’s executive board, said that the purchase of these assets was “theoretically” an option for the central bank, which earlier this year resolved to “take further unconventional measures to counteract a lengthy period of lower inflation”.

His speech, delivered in German, came as official statistics published on Friday showed inflation of just 0.4pc in the year to October.

Very low levels of inflation were characterised by Mr Mersch as “abnormally low”, as price growth remained well below the ECB’s target of close to 2pc.

The official said that while there was scope to buy such assets, the ECB is about to embark on a programme of asset-backed securities purchases.

“Every purchase of a security – or precious metal or foreign currency – naturally increases the credit risk of the buyer”, he added, noting that the ECB may lack a mandate to increase the risk of its balance sheet.


Eric Sprott: Global Gold Demand Is Overwhelming Supply
Submitted by Tyler Durden on 11/16/2014 21:23 -0500

Submitted by Adam Taggart via Peak Prosperity,

Precious metals have had an especially tough go of it over the past month. Both gold and silver are back in price territory last seen in 2010.

Eric Sprott returns to the program to discuss the facts as we know them in this market, and what’s likely to happen from here. Specifically, he explains the tremendous imbalance currently seen between global supply and demand for precious metals. In his view, prices will have to correct upwards — prodigiously — to bring the two back in alignment:

We see almost 60 tons a week being delivered on the Shanghai Gold Exchange. Well, you start annualizing 60 tons a week you’re talking 3,000 tons a year now. We saw 94 tons of gold go into India in September. We saw the Russian Central Bank buy 37 tons of gold in September. I mean I could come up with numbers that might suggest that we’ve got 400 tons a week of demand. And we only got 230 tons a week of mine supply. And I’ve only gotten to three data points. I haven’t even gone to the rest of the world.

We’ve now created a situation unfortunately in the market where between high frequency trading and algorithms and interference by the planers they can make things happen that looks like everything is OK. And it’s the "OK" part where I think we can really relate to gold not being allowed to go up. Because that’s the canary in the coal mine. If gold was above $2,000 we’d all be wondering: What the hell is going on here?  And so they haven’t allowed it to happen.

But by suppressing the price — and one of the great things about a price of $1,100/oz is that you can buy a lot of gold at $1,100 versus $1,900 — you can buy almost 50%-60% more gold than you could three years ago with the same amount of money. And you can buy 3x the silver. With the same amount of money!


Jim Sinclair’s Commentary

Another name of QE is Debt Monetization so expect DM to replace QE.

Industrial Output in U.S. Unexpectedly Fell in October
By Victoria Stilwell  Nov 17, 2014 12:23 PM ET

Factory production struggled to gain traction in October as automakers cut back for a third consecutive month, showing U.S. manufacturing was off to a slow start in the fourth quarter.

The 0.2 percent increase in output matched September’s advance after it was revised down, figures from the Federal Reserve in Washington showed today. Total industrial production unexpectedly dropped 0.1 percent, reflecting the vehicle pullback and less demand at utilities, mining companies.

A broadening in consumer spending beyond motor vehicles, where a recent dip left sales near the strongest levels in eight years, will be needed to give manufacturing an additional boost as growth slows overseas. American plants pumped out more machinery and electronics last month, a sign business investment is bolstering the economic expansion.

The outlook “remains quite favorable,” said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC in New York, who correctly forecast total output would drop. “If we do have consumers beginning to spend again and businesses starting to invest in a more meaningful manner, we should see that reflected in the industrial sector.”

U.S. stocks fluctuated, after the Standard & Poor’s 500 Index climbed to a record last week, as corporate deals helped offset the industrial production data and a report showing Japan fell into a recession last quarter. The S&P 500 fell less than 0.1 percent to 2,038.09 at 12:20 p.m.


Posted at 9:37 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The latest from John Williams’

- October RetailSales Were Near Consensus, with Minimal Revisions and A Sharply-Slowing Pace of Fourth-Quarter 2014 Growth
- Negative Surpriseson the Economy and in the Political Arena Are Among Imminent Top Threats to U.S. Dollar

"No. 673: October Retail Sales, Consumer Liquidity, Updated Hyperinflation and DollarRisks"

Russia moves away from dollar, embraces Chinese currency
UPI International Top News
Friday November 14, 2014 5:47 AM

Russian President Vladimir Putin said Friday his country was deliberately moving away from using the U.S. dollar for international trade.

He told the Russian news agency Tass, in an interview, Russian oil sold to China will be paid for in renminbi, the Chinese currency, part of a trend by Russian companies to denominate imports and exports in renminbi or rubles, and not U.S. dollars.

"We’re moving away from the diktat of the market that denominates all the commercial oil flows in U.S. dollars," Putin said.

Direct transactions between the Russian and Chinese currencies amounted to $5.2 billion in October, up from $307 million in September, the Chinese central bank’s China Foreign Exchange Trading System reported.

"Volumes are picking up as both countries aren’t against using their own currencies instead of the dollar for mutual transactions. I expect the turnover to grow," Evgeny Gavrilenkov, a currency strategist at Mosciow’s Sberbank Rossii, told the Wall Street Journal .

To further keep the value of the ruble up without using U.S. dollars, the Russian Central Bank purchased 55 metric tons of gold in the third quarter of 2014.



David Stockman On Monetary Breakdown & Skyrocketing Gold

Today David Stockman warned King World News that the global monetary breakdown is going to intensify and this will lead to a skyrocketing gold price.  KWN takes Stockman’s warnings very seriously because he is the man former President Reagan called on in 1981, during that crisis, to become Director of the Office of Management and Budget and help save the United States from collapse.  Below is what Stockman, author of the website contracorner, had to say in his powerful interview.

Eric King:  “David, you’re thoughts on the gold market as there is all of this massive money printing all over the world.  It really is unprecedented.”

Stockman:  “Yes.  It’s leading to a breakdown of the monetary system, not to the classic hyperinflation which causes a flight to gold in the initial instance….


Posted at 8:33 AM (CST) by & filed under In The News.

Islamic State leader urges attacks in Saudi Arabia: speech
BEIRUT Thu Nov 13, 2014 1:08pm EST

(Reuters) – Islamic State leader Abu Bakr al-Baghdadi called for attacks against the rulers of Saudi Arabia in a speech purported to be in his name on Thursday, saying his self-declared caliphate was expanding there and in four other Arab countries.

Baghdadi also said a U.S.-led military campaign against his group in Syria and Iraq was failing and he called for "volcanoes of jihad" the world over.

Reuters could not independently confirm the authenticity of the speech – an audio recording carried on Islamic State-run social media. The voice sounded similar to a previous speech delivered by Baghdadi in July in a mosque in the Iraqi city of Mosul in July, the last time he spoke in public.

It followed contradictory accounts out of Iraq after U.S. air strikes last Friday about whether he was wounded in a raid. The United States said on Tuesday it could not confirm whether he was killed or wounded in Iraq following a strike near the city of Falluja.

Baghdadi urged supporters in Saudi Arabia, the world’s top oil exporter, to take the fight to the rulers of the kingdom, which has joined the U.S.-led coalition in mounting air strikes against the Islamic State group in Syria.



Investors Don’t Believe Low Oil Prices Are "Unequivocally" Good For America
Submitted by Tyler Durden on 11/13/2014 11:26 -0500

While investors are told day after day that low oil prices are "unequivocally" good for America’s economy (pick your number $20, $30, $40 billion tax cut for consumers), it appears they are not buying this big lie (that appears to forget the other side of the equation of capex, jobs, and spending from the Shale Oil miracle). As oil prices push to levels where the majority of US Shale plays become non-economic on a half-cycle basis, markets are voting withtheir money and shale-based stocks are pressing to new lows (down 50-70% in the last few months).

At $75, oil prices are crushing more and more economic scenarios for Tight-Oil…


and equity investors know it…



Obama Said to Plan Moves to Shield 5 Million Immigrants

WASHINGTON — President Obama will ignore angry protests from Republicans and announce as soon as next week a broad overhaul of the nation’s immigration enforcement system that will protect up to five million undocumented immigrants from the threat of deportation and provide many of them with work permits, according to administration officials who have direct knowledge of the plan.

Asserting his authority as president to enforce the nation’s laws with discretion, Mr. Obama intends to order changes that will significantly refocus the activities of the government’s 12,000 immigration agents. One key piece of the order, officials said, will allow many parents of children who are American citizens or legal residents to obtain legal work documents and no longer worry about being discovered, separated from their families and sent away.

That part of Mr. Obama’s plan alone could affect as many as 3.3 million people who have been living in the United States illegally for at least five years, according to an analysis by the Migration Policy Institute, an immigration research organization in Washington. But the White House is also considering a stricter policy that would limit the benefits to people who have lived in the country for at least 10 years, or about 2.5 million people.

Extending protections to more undocumented immigrants who came to the United States as children, and to their parents, could affect an additional one million or more if they are included in the final plan that the president announces.

Mr. Obama’s actions will also expand opportunities for immigrants who have high-tech skills, shift extra security resources to the nation’s southern border, revamp a controversial immigration enforcement program called Secure Communities, and provide clearer guidance to the agencies that enforce immigration laws about who should be a low priority for deportation, especially those with strong family ties and no serious criminal history.


Dollar bandwagon starting to get a little crowded
Sara Eisen | @saraeisen

No question, the U.S. dollar is the trade du jour.

Investors are betting on the buck for good reason: The U.S. economy is outperforming other global economies, and the Federal Reserve is moving closer to raising interest rates. At the same time, other central banks in Europe and Japan are moving in the opposite direction, easing policy to fight both deflation and slow growth.

That divergence in central bank policies has resulted in a $46 billion bullish trade on the dollar.

In fact, hedge funds and other large speculators are betting the dollar will strengthen against all major currencies, according to the latest weekly Commodity Futures Trading Commission report on futures positions. Traders have been increasing bullish dollar positions steadily since mid-May.

The enthusiasm is shared by forecasters as well.

Scotiabank said euro forecasts against the dollar from major Wall Street firms have fallen from 1.28 in August to 1.20 in November. They’ve also been upping their predictions for the dollar against the Japanese yen, British pound, Canadian dollar and Australia’s dollar.

Camilla Sutton, chief FX Strategist at Scotiabank, pointed out that the options market is also signaling growing bullish sentiment on the dollar. So-called risk reversals, or the difference in volatility between put and call options, show increasing demand for protection for a strong dollar in recent months.


Spike in Russian military activity is about more than Ukraine

A new study details the rise in close encounters between Russian forces and the West this year. The increase coincides with the Ukraine crisis, but it would be wrong to view it only in the light of recent events.

Ten days ago the Portuguese air force scrambled to intercept Russian bombers in the international airspace along its coast. Local media said the Russian planes involved were two strategic bombers which flew near the approach path for commercial aircraft to Lisbon international airport. It was the second such incident within several days and the latest sign of a spike in Russian activity close to NATO’s borders.

NATO recently said it had launched more than 100 intercepts of Russian aircraft so far this year – three times more than in all 2013. The alliance called the rise in Russian flights an "unusual level of air activity over European airspace."

Now, the London-based European Leadership Network (ELN) has published a study listing 45 close encounters by Russian forces with the West.

Among the encounters detailed are several classified as "high risk":

- the alleged abduction of an Estonian security service operative by Russian agents from an Estonian border post on September 5


Jim Sinclair’s Commentary

Gold will be a part of the strategy of all BRICs, not just Russia and China

Putin stockpiles gold as Russia prepares for economic war
Russia’s central bank added to its reserves of bullion in the third quarter, according to the latest report from the World Gold Council
By Andrew Critchlow, Commodities editor
6:00AM GMT 13 Nov 2014

Russia has taken advantage of lower gold prices to pack the vaults of its central bank with bullion as it prepares for the possibility of a long, drawn-out economic war with the West.

The latest research from the World Gold Council reveals that the Kremlin snapped up 55 tonnes of the precious metal – far more than any other nation – in the three months to the end of September as prices began to weaken.

Vladimir Putin’s government is understood to be hoarding vast quantities of gold, having tripled stocks to around 1,150 tonnes in the last decade. These reserves could provide the Kremlin with vital firepower to try and offset the sharp declines in the rouble.

Russia’s currency has come under intense pressure since US and European sanctions and falling oil prices started to hurt the economy. Revenues from the sale of oil and gas account for about 45pc of the Russian government’s budget receipts.

The biggest buyers of gold after Russia are other countries from the Commonwealth of Independent States, led by Kazakhstan and Azerbaijan.

In total, central banks around the world bought 93 tonnes of the precious metal in the third quarter, marking it the 15th consecutive quarter of net purchases. In its report, the World Gold Council said this was down to a combination of geopolitical tensions and attempts by countries to diversify their reserves away from the US dollar.



Russia to Fly Bombers to U.S. Gulf as Ukraine Escalates
By Volodymyr Verbyany and Kateryna Choursina Nov 12, 2014 3:16 PM ET

Russia plans to extend long-range bomber patrols as far as the Gulf of Mexico and the eastern Pacific Ocean, its defense minister said, as NATO accused Vladimir Putin’s government of sending more troops into Ukraine.

With Ukraine warning its conflict is close to returning to open war, Russian Defense Minister Sergey Shoigu said his country’s military will start conducting regular long-range bomber patrols along Russia’s borders and over the Arctic Ocean. His ministry rejected an assertion from the North Atlantic Treaty Organization’s top general that it was moving combat troops and heavy weapons into Ukraine’s rebel-held east.

“In this situation, we have to maintain a military presence in the western part of the Atlantic and the eastern part of the Arctic Ocean, in the Caribbean and in the Gulf of Mexico,” Shoigu said, according to a statement on the Russian Defense Ministry website.

Standoff in Ukraine

Pressure has been growing between Russia and the U.S. and the European Union as Ukraine and pro-Russian rebels in its eastern regions accuse each other of gearing up for a renewed military push that risks adding to the death toll of more than 4,000. The UN Security Council is scheduled to hold an emergency session in New York today over the conflict.


Posted at 8:29 AM (CST) by & filed under Jim's Mailbox.

Dear Mr. Sinclair,

I see many very hard attacks on you personally in recent weeks. I believe that is connected to gold price and miners price decline and especially to your correct observations on the gold price.

I want to say that in 2000 nobody was brave enough and wise to say that price will go to USD 1600 – except you!

I hold my holdings that were rescued from UBS "captivity"(custody) and certificated and delivered in form of mining shares certificates. I believe that time will come that this will have some value, as precious metals have to rise – as everything has gone even worse in recent years.

I would be grateful to you for some remarks on miners, as I live here in Europe and cannot come to your meetings.

Thank you again and all the best,

Dear A,

The miners that will lead the field on the recovery are those with relative low cost production, good resources and a cash reserve.




Einstein had a wonderful quote:

"Insanity: doing the same thing over and over again and expecting different results."

Perhaps the world’s Central Banks should take heed.

Japan had massive QE for decades – didn’t work.
USA had massive QE for a decade – didn’t work.

Now Europe is contemplating massive QE. Think it’ll work? Think again.

Either they are insane, according to Einstein, or there is an ulterior motive, using economic weakness as a cover.

The latter is my guess. Saving the crap shooters in the world’s financial casinos, namely the big insurance companies, big banks, and large hedge funds. This has nothing to do with creating economic prosperity.

CIGA Wolfgang

ECB putting eurozone economy at risk, German expert group says
12.11.14 @ 19:16

BRUSSELS – The European Central Bank’s (ECB) plans to pump more cheap credit into banks risk undermining the long-term health of the eurozone, according to Germany’s leading economic expert group.

The ECB’s "extensive quantitative easing measures" posed "risks for long-term economic growth in the euro area, not least by dampening the member states’ willingness to implement reforms and consolidate their public finances", the German Council of Economic Experts (GCEE) said in its annual report, published on Wednesday (12 November).

The report added that the ECB "should avoid massively expanding its balance sheet as long as it does not forecast deflation in the euro area."

The report is the latest German warning shot to be aimed in the direction of Mario Draghi’s ECB, which has started to pump more money into the economy in a bid to stimulate greater financial activity.