Posted at 3:56 PM (CST) by & filed under Jim's Mailbox.

Jim,

A lot of hoopla surrounding Janet Yellin’s “Extended Period of Time”.  Whether she would keep the phrase in her statements or remove it. It’s all meaningless.

She did keep the phrase in her remarks, much to the delight of the stock market, yet people are not paying attention to her definition:

“Extended period of Time” (for keeping rates low) is NOT based on a calendar, but on incoming economic data.

That means the Fed could raise rates next week if it wanted to.

That makes the phrase… MEANINGLESS.

CIGA Wolfgang

Posted at 3:54 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

John Williams shares the following with us.

- With Some Double-Counting, Sharp Declines in Headline Inflation Boosted Monthly Real Retail Sales and Earnings 
- An Issue with Consistent Measurement of Gasoline Prices? 
- August Annual Inflation: 1.7% (CPI-U), 1.6% (CPI-W), 9.4% (ShadowStats) 
- Outlook Weakened for 2015 Social Security COLA

"No. 659: August CPI, Real Retail Sales and Earnings" 
Web-page: http://www.shadowstats.com

Just Three Days?
Author : Bill Holter
Published: September 18th, 2014

So many topics to choose from today, Russia is pushing back on sanctions and has already begun to cut gas supplies to Europe.  The Scottish independence vote which if "yes" means the end to a 1,000 year empire and brings into question the Anglo American banking and financial systems themselves.  The ISIS situation and whether (in reality "how") we go back there with boots on the ground or not.  We also have the FOMC meeting and statement coming today where we will find out whether QE will be publicly discontinued or not …I say "publicly" because the reality is such that QE will remain forever whether admittedly or in the shadows and hidden from view.  We also have news of India tripling their gold demand as new physical gold exchanges open in China tomorrow.  The "live" date has been pushed forward by a week or more, I can only wonder what this means because the Chinese NEVER do anything by chance or without reason.

  I could have chosen any of these topics but I had a conversation with a very long time friend and client this morning and he brought up the question that seems to be burning in everyone’s mind, "when?".  When does everything come apart at the seams?  Please don’t get this wrong, he was not asking me "when?" I thought, rather, he was commenting on how many people are expecting some sort of "slow burn".  He said "so many people think this will be 3 years, 5 years or even 12 years" to unravel.

  Here is the point, the "fuse", or I should say "fuses" are lit from so many different directions I don’t have enough fingers and toes to count them all.  Only one fuse (cause) needs to reach the powder keg but the way it looks to me is we will more than likely see many reach the powder at the same time.  When I say same time I believe all within the same week as many are interconnected and many will be advanced by the ignition of others.

  When my buddy said "3 years" I immediately said to him "you mean 3 days right?".  He said to me "that’s exactly what I’m talking about, once this thing goes how can it last more than 3 days?".  Let me explain this, once we "ignite" I don’t see how the markets can function for any more than 3 days (two weeks at the absolute maximum) before being closed.  Today, everything relies on everything else for "value" or "foundation".  It’s like a building block tower where pulling even one block will take the whole thing down…and this happens quickly, NOT in some slow motion, slow burn or controlled collapse.  This would be nice but unfortunately not the case.

More…

China opens gold market to foreigners, seeks more pricing power
2014-09-18 17:14

SHANGHAI, Sept. 18 (Xinhua) — Foreigners now have access to China’s gold market after the Shanghai Gold Exchange (SGE) launched its international board on Thursday.

The yuan-denominated board was opened in the China (Shanghai) Pilot Free Trade Zone (FTZ), a move to encourage foreign participation in China’s tightly controlled gold market.

The launch will mark the first time China has allowed foreign investors to participate in the country’s gold trade.

Despite being the world’s largest producer and consumer of the precious metal, China has little say over the pricing of gold in the global market. Authorities hope to gain greater influence over pricing by granting global investors access to the country’s 3.2 trillion yuan (522.8 billion U.S. dollars) gold trading market.

The new international board hopes to challenge current gold market leaders London and New York. So far, it has attracted dozens of foreign members, including renowned international commercial and investment banks but it did not release their names.

Gold contracts listed on the SGEI will include a 99.5 percent 12.5 kg contract widely traded among central banks and bullion investors on the global market, a 99.99 percent 1 kg contract traded in China’s domestic gold market and 100 gram contract of the same purity. Daily price volatility will be capped at 30 percent on either side of the closing price from the previous day.

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Jim Sinclair’s Commentary

This assures a Bric based SWIFT system totally competitive with Brussels.

European Parliament Calls For Excluding Russia From SWIFT System
Updated 03:50 p.m. Moscow time

MOSCOW, September 18 (RIA Novosti) – In a resolution adopted Thursday, the European Parliament called on the EU member states to consider excluding Russia from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) financial transaction system.

The European Parliament “calls for the EU to consider excluding Russia from… the Swift system,” the resolution reads.

The European Parliament does not develop projects and is not responsible for making decisions concerning sanctions. All the bills on restrictive measures are elaborated by the European Commission, the final decision rests with the individual EU countries.

The calls by the European Parliament come just a week after the United States and the European Union implemented new sanctions against Russia targeting the country’s banking, energy and defense sectors. Moscow has repeatedly stated that Russia is not a party to Ukraine’s internal conflict, and said that Western sanctions run counter to the principles of international law.

This spring, Russian authorities started searching for ways to decrease Russian financial markets" dependence on SWIFT, when a number of banks were hit by Western sanctions.

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Jim Sinclair’s Commentary

Now this is really nuts.

US schools received M16 rifles and grenade launchers under Pentagon programme
At least 26 school districts participated in surplus gear, which has come under increased scrutiny following Ferguson riots
10:34AM BST 18 Sep 2014

School police departments across the country have taken advantage of free military surplus gear, stocking up on mine resistant armored vehicles, grenade launchers and scores of M16 rifles.

At least 26 school districts have participated in the Pentagon’s surplus programme, which is not new but has come under increased scrutiny after police responded to protesters in Ferguson, Missouri, last month with tear gas, armored military trucks and riot gear.

Now several school districts say they’ll give some of the equipment back, while others plan to keep the rifles they received. Nearly two dozen education and civil liberties groups sent a letter earlier this week to the Pentagon and the Justice and Education departments urging a stop to transfers of military weapons to school police.

The Los Angeles Unified School District – the nation’s second largest school district covering 710 square miles and with more than 900,000 students – said it would remove three grenade launchers it had acquired because they "are not essential life-saving items within the scope, duties and mission" of the district’s police force.

But the district plans to keep the 60 M16s and a military vehicle – known as an MRAP – used in Iraq and Afghanistan that was built to withstand mine blasts.

More…

Jim Sinclair’s Commentary

The interesting part of the headline is "Among Price Ambition."

China Opens Gold Market to Foreigners Amid Price Ambition
By Bloomberg News  Sep 18, 2014 10:05 AM ET 

China will give foreign investors direct access to its gold market for the first time today as the biggest-consuming nation seeks to exert more influence over prices while boosting the yuan’s global use.

The Shanghai Gold Exchange will start trading contracts in the city’s free-trade zone that will be linked to its domestic spot market and available to about 40 international members including Goldman Sachs Group Inc. and UBS AG. Access was previously limited to some Chinese units. Gold in China this year cost as much as $31 an ounce more and $42 less than the London spot price, according to data compiled by Bloomberg.

China, which overtook India as the biggest bullion buyer in 2013, wants to establish a benchmark price in Asia by opening up trading to a larger pool of investors. It’s also pushing to reduce controls over the movement of capital across its borders after policy makers pledged last year to carry out the widest expansion of economic freedoms since the 1990s.

“It’s indicative of the ambition to move the gold market more to where the consumption is,” Victor Thianpiriya, commodity strategist at Australia & New Zealand Banking Group Ltd., said by phone from Singapore. “It makes sense that price discovery occurs in the center of consumption.”

Premier Li Keqiang toured the free-trade zone today, days before its one-year anniversary. The FTZ started as a testing ground for liberalizing interest rates and boosting the yuan’s role in global transactions.

More…

Australian PM says police raids follow IS linked beheading plot
BY MATT SIEGEL
SYDNEY Thu Sep 18, 2014 10:25am EDT

(Reuters) – Militants connected with radical group Islamic State were planning to behead a member of the public in Australia, Prime Minister Tony Abbott said on Thursday, after hundreds of police raided homes in a sweeping counter-terrorism operation.

Abbott said there was a "serious risk from a terrorist attack" days after Australia raised its national terror threat level to "high" for the first time, citing the likelihood of attacks by Australians radicalized in Iraq or Syria.

Australia is concerned over the number of its citizens believed to be fighting overseas with militant groups, including a suicide bomber who killed three people in Baghdad in July and two men shown in images on social media holding the severed heads of Syrian soldiers.

More than 800 police were involved in the pre-dawn security operation in Sydney and Brisbane, which was described as the largest in Australian history and resulted in the detention of 15 people, police said.

Abbott told a news conference that members of the radical group had planned to conduct a public beheading.

More…

Jim Sinclair’s Commentary

It is far from all roses out there.

Housing Starts in U.S. Dropped More Than Forecast in August
By Jeanna Smialek  Sep 18, 2014 8:47 AM ET 

Housing starts slumped in August after reaching the highest level in almost seven years, pointing to an uneven pickup in the U.S. residential real-estate market that will limit its contribution to economic growth.

Beginning home construction fell 14.4 percent, the most since April 2013, to a 956,000 annualized rate following July’s revised 1.12 million pace that was the strongest since November 2007, the Commerce Department said today inWashington. Last month’s reading was lower than the most pessimistic forecast of any economist surveyed by Bloomberg. Building permits also fell.

Slow wage growth and tight lending standards continue to challenge the homebuilding industry by placing homeownership out of reach for some Americans. Even so, job market progress and low interest rates could pump life into residential real-estate as the economic expansion gains momentum.

“This data seems a little bit weaker, but overall, the trend is still modestly higher,” said Gennadiy Goldberg, U.S. strategist at TD Securities USA LLC in New York, who had the lowest estimate for starts among economists surveyed. “The data remains choppy, but overall the trend remains higher.”

Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the labor market continues to strengthen, another report showed today.

More…

Why is Obama sending military to attack the Ebola virus?
Updated by Julia Belluz on September 17, 2014, 3:50 p.m.

Tuesday’s announcement by President Barack Obama — that the US would be sending in an army of 3,000 to fight Ebola — came as a relief to the many wondering when the international community would wake up to the daily horror show playing out in West Africa.But the tactics also raised some questions: why was Obama sending soldiers to fight off a virus? And why has he been characterizing this disease spread as a "security threat" and "security priority"?

Why Obama is describing Ebola as a "security threat"

Obama has repeatedly referred to the threat of Ebola in security terms, arguing the virus could cripple the already fragile economies in the African region. He’s made the case that this will have consequences for not only the security of countries there, but also for nations around the world — even if the virus doesn’t spread beyond Africa.

For examples of this war-like mentality, look no further than the president’s address, delivered Tuesday from the Centers for Disease Control headquarters in Atlanta:

"If the outbreak is not stopped now, we could be looking at hundreds of thousands of people infected, with profound political and economic and security implications for all of us. So this is an epidemic that is not just a threat to regional security — it’s a potential threat to global security if these countries break down, if their economies break down, if people panic. That has profound effects on all of us, even if we are not directly contracting the disease."

More…

US destroys ISIS training camp in first such strike
18:51

US aircraft have targeted a training camp for Islamic State (IS, formerly ISIS/ISIL) jihadists in northern Iraq, military officers said on Thursday. It was the first such air strike. American forces destroyed “an ISIL armed vehicle, two ISIL-occupied buildings and a large ISIL ground unit,” AFP cited a US military officer, who spoke on condition of anonymity. A second air raid targeted an IS ammunition depot southeast of Baghdad, Central Command said. US warplanes have conducted a total 176 air strikes against the Islamic State, mostly in northern Iraq, since August 8.

More…

Putin ‘privately threatened to invade Poland, Romania and the Baltic states’
German newspaper Suddeutsche Zeitung reports that Ukrainian President Petro Poroshenko told
European Commission that Putin made the threat in a recent conversation
By Justin Huggler, Berlin
6:48PM BST 18 Sep 2014

President Vladimir Putin privately threatened to invade Poland, Romania and the Baltic states, according to a record of a conversation with his Ukrainian counterpart.

"If I wanted, in two days I could have Russian troops not only in Kiev, but also in Riga, Vilnius, Tallinn, Warsaw and Bucharest," Mr Putin allegedly told President Petro Poroshenko of Ukraine, reported Süddeustche Zeitung, a German newspaper.

If true, this would be the first time that Mr Putin has threatened to invade Nato or EU members. Any threat to send Russian troops into the capitals of Latvia, Lithuania, Estonia, Poland and Romania would cause grave alarm among Western leaders.

If Mr Putin were to act on this, Britain could find itself at war with Russia. All five countries mentioned in this alleged conversation are members of both the EU and Nato. They are covered by the security guarantee in Article V of Nato’s founding treaty, which states that "an attack on one is an attack on all". In a speech in Tallinn earlier this month, President Barack Obama confirmed Nato’s commitment to this doctrine.

Mr Putin’s alleged threat bears similarities to remarks he made to Jose Manuel Barroso, the president of the European Commission, in which he warned: "If I want to, I can take Kiev in two weeks".

More…

Posted at 12:45 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

One more challenge.

H.R. 24 ‘Audit the Fed’ Bill Passes in House
Published by The West Wire at September 17, 2014

From Congressman Paul Broun–U.S. Rep. Paul Broun, M.D. (GA-10) today released the following statement after H.R. 24, the Federal Reserve Transparency Act (Audit the Fed), passed in the U.S. House of Representatives with strong bipartisan support. H.R. 24 has over 220 cosponsors and passed overwhelmingly by a 333-92 margin.

Said Rep. Paul Broun:

“Today’s passage of the Audit the Fed bill brings us one step closer towards bringing much-needed transparency to our nation’s monetary policy. For the past 100 years, the Federal Reserve, a quasi-government agency, has acted under a veil of secrecy – controlling our monetary policy and thus, our economy. While in recent years, the Fed has been granted a greater role in overseeing the regulation of our financial system, current law specifically prohibits audits of the Federal Reserve’s deliberations, decisions, or actions on monetary policy. This lack of accountability and transparency has led to grievous consequences – and it must end.

“I applaud my colleagues, Republicans and Democrats alike, for their support of this vital bill, and I commend my good friend and former colleague Dr. Ron Paul for his leadership on this important issue. I strongly encourage Senate Majority Leader Harry Reid to recall his past support for this legislation – which he stated as recently as 2010 – and to bring this bill before the Senate for a vote, so we may deliver the transparency and government accountability the American people need and deserve.”

More…

 

Barack Obama silences generals on US ground troops in Iraq
White House publicly overrules military and promises US will not fight "another ground war in Iraq"
By Raf Sanchez, Washington
7:13PM BST 17 Sep 2014

President Barack Obama today decisively silenced speculation by America’s generals that US ground troops could return to Iraq in a rare example of the White House publicly overruling the military.

A day after US generals suggested that American troops may be needed to liberate jihadist-occupied cities in Iraq, Mr Obama promised soldiers: "I will not commit you and the rest of our armed forces to fighting another ground war in Iraq."

His emphatic statement at a Florida military base highlights the tensions between a president determined to avoid American casualties and commanders sceptical that Isil can be defeated with air power alone.

Mr Obama was forced to repeat his pledge of "no boots on the ground" after General Martin Dempsey told a Senate hearing there may be situations where Iraqi forces need American advisers during combat.

The suggestion angered and alarmed Mr Obama’s liberal supporters and prompted the White House to hastily rule out the possibility of Americans on the front line.

More…

China advances launch of international gold exchange
Author: A. Ananthalakshmi (Reuters)
Posted: Tuesday , 16 Sep 2014

SINGAPORE (Reuters) – China will launch its international gold exchange 11 days ahead of schedule, sources said on Tuesday, racing ahead in the scramble to set up an Asian bullion benchmark as rival Singapore is forced to delay its gold contract due to technical issues.

Asia, home to the world’s top two gold buyers – China and India, has been clamouring to gain pricing power over the metal and challenge the dominance of London and New York in trading.

The state-run Shanghai Gold Exchange (SGE) will launch the global gold bourse in the Shanghai free-trade zone on Thursday, two sources familiar with the matter told Reuters. The SGE had initially planned the launch for Sept. 29.

The change was made based on the availability of some government officials to participate in the launch event, one of the sources said, adding that all 11 physical gold contracts will begin trading on Thursday.

The ability to bring forward the launch, which will mark the first time foreign players will be allowed to participate directly in China’s physical gold market – the biggest in the world, shows the country’s preparedness with the exchange that it is hoping will become the centre of Asian gold trading.

The response has been strong, with the bourse exceeding expectations in signing up trading members, Reuters reported earlier.

More…

Isis video threatens to target White House and US troops
Video purports to be trailer for film entitled Flames of War with strapline ‘fighting has just begun’
Matthew Weaver
theguardian.com, Wednesday 17 September 2014 07.54 EDT

Islamic State militants have threatened to target the White House and kill US troops in a new slickly made video response to Barack Obama’s campaign to "degrade and destroy" the organisation.

The video, in the style of a blockbuster movie trailer for what is "coming soon", depicts a masked man apparently about to shoot kneeling prisoners in the head. Towards the end of the clip there is shaky footage of the White House filmed from a moving vehicle, suggesting the building is being scoped out for attack.

It was released on Tuesday after US defence chiefs suggested that American troops could join Iraqi forces fighting Isis, despite Obama’s assurance that US soldiers would not be engaged in fighting on the ground.

The only words on the 52-second clip are those of Obama making that pledge. "American combat troops will not be returning to fight in Iraq," it quotes him saying. This comes directly after footage of US troops being shot at, injured and taken away in an armoured vehicle, threatening what will happen if troops are redeployed to Iraq.

More…

 

Russia to boost Crimea troop numbers, worries over military build-up at borders
Published time: September 16, 2014 12:39
Edited time: September 16, 2014 18:34

Russia is going to increase its military presence on the Crimean Peninsula as “the situation in Ukraine has escalated sharply,” Russian Defense Minister announced.

The plan released by Sergey Shoigu is due to the increased “presence of foreign military” in “the immediate vicinity” of Russia’s borders.

"The deployment of proper and self-sufficient forces in the direction of Crimea is one of [our] top priorities," he said.

“The military-political situation in the southwestern strategic direction has changed significantly since the beginning of the current year. This is largely due to the expansion of the territory of [Russia’s] Southern Military District after Crimea joined Russia,” Shoigu said.

The Russian Defense Ministry will also consider setting up technical missile bases in “each military district.”

"We will discuss proposals to create missile technical bases in each military district. The creation of more autonomous units of storage and transportation [of missiles] will allow us to fully use missile military units when they are used in different operating directions and at a considerable distance from each other,"Shoigu said.

More…

U.S. General Open to Ground Forces in Fight Against ISIS in Iraq
By MARK LANDLER and JEREMY W. PETERS
SEPT. 16, 2014

WASHINGTON — President Obama’s top military adviser said Tuesday that he would recommend deploying United States forces in ground operations against Islamic extremists in Iraq if airstrikes proved insufficient, opening the door to a riskier, more expansive American combat role than the president has publicly outlined.

Gen. Martin E. Dempsey, the chairman of the Joint Chiefs of Staff, told the Senate Armed Services Committee that while he was confident that an American-led coalition would defeat the Islamic State, he would not foreclose the possibility of asking Mr. Obama to send American troops to fight the militants on the ground — something Mr. Obama has ruled out.

“My view at this point is that this coalition is the appropriate way forward. I believe that will prove true,” General Dempsey said. “But if it fails to be true, and if there are threats to the United States, then I, of course, would go back to the president and make a recommendation that may include the use of U.S. military ground forces.”

General Dempsey acknowledged that this would run counter to the president’s policy, but he said, “He has told me as well to come back to him on a case-by-case basis.”

The general’s statement lays bare the challenge the president will face in selling an expanded military campaign to a war-weary American public. Mr. Obama, seeking to allay fears of another Iraq war, has promised that American ground troops will not be involved in fighting the Islamic State, also known as ISIS or ISIL. In a sign of the administration’s mixed message, the president pointedly did not call it a war, while his advisers later did.

More…

Islamic State steps up anti-US propaganda with calls to attack Times Square
Online propaganda videos and messages posted by Isil supporters encourage "lone wolf" attacks against numerous US tourist destinations and details how to make homemade pipe bombs
By Oliver Duggan
11:57AM BST 17 Sep 2014

The Islamic State (Isil) has encouraged “lone wolf” attacks by extremists equipped with homemade pipe bombs on Times Square and other high-profile US tourist destinations, according to reports.

A message posted on an Isil forum entitled “To the Lone Wolves in America: How to Make a Bomb in Your Kitchen, to Create Scenes of Horror in Tourist Spots and Other Targets” surfaced in the last 24 hours.

In it, supporters of the extremist organisation are told to plant explosives in busy public locations in New York, Las Vegas and Texas, and at metro stations across the US.

It comes as Isil released a slickly-produced propaganda video in response to President Barack Obama’s pledge to "degrade and destroy" the organisation.

The video includes shaky-footage of the White House that appears to have been filmed from a moving car, and include extracts of President Obama’s statement on the US response to Isil this week.

More…

China cenbank injects $81 billion into major banks to support economy – reports
By Lu Jianxin and Kazunori Takada
SHANGHAI Wed Sep 17, 2014 1:05pm BST

(Reuters) – China’s central bank is injecting a combined 500 billion yuan (49.98 billion British pound / $81.35 billion) of liquidity into the country’s top banks, according to media reports, a sign that authorities are stepping up efforts to shore up a faltering economy.

Global shares and commodity prices rose on the reported move, although local money market rates climbed on the day, reflecting continued tightness in liquidity. [MKTS/GLOB]

The Wall Street Journal, citing an unnamed Chinese bank executive, said the People’s Bank of China (PBOC) is pumping in 100 billion yuan each into China’s top five banks via standard lending facility in the form of 3-month loans.

When contacted by Reuters, a PBOC spokesman said: “We will make an announcement if we have any news.”

The central bank may be worried that an expected tightening in liquidity ahead of the quarter-end as well as a series of upcoming initial public offerings could trigger a sharp rise in short-term rates, as was seen in June last year, when they surged to around 30 percent and roiled global markets, traders said.

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Posted at 11:46 AM (CST) by & filed under USAWatchdog.com.

By Greg Hunter’s USAWatchdog.com

Dear CIGAs,

Investment strategist John Embry says the market manipulation in physical gold and silver is coming to an end.  How close?  Embry says, “I think we are very close now in the sense that the physical supplies of both gold and silver are being diminished at a fast clip.  I just saw Indian imports (for gold) were up 176% in the latest month. . . .   Basically, all this gold and silver is headed from west to east, and I think this is a very, very disturbing development for people who live in the west.  The timing of it remains imprecise.  I think because of the take down in the paper market is so aggressive, at this point, that there is something that is going on behind the curtain that suggests to me that things are getting very close to reaching a head.  We won’t know until it happens, but you got to be on the right side of the trade the moment it happens.  You can’t be late.”  Embry goes on to say, “I have never seen more negative sentiment in the sector at a time when both gold and silver are remarkably underpriced.  I think gold and silver are as cheap today as anytime in their histories.  This is in relation to the amount of money out there, the cost of credit, the cost of digging it out of the ground and etcetera.  Nobody is interested in buying it, and to me, this is one of the great buying opportunities of all time.”

On the subject of missing the overwhelming take down in the price of gold and silver since it peaked in 2011, Embry admits, “I think what we missed, and I have been thinking about this a lot, we didn’t fully understand the extent of the new financial innovation.  What you have today between derivatives, high frequency trading, algorithm programs and what have you, you can do amazing damage to markets and put them almost anywhere you want.  The only thing that can stop something in the case of gold and silver is there is a physical context to it.  It’s our opinion the physical supply of gold and silver is reaching critically low levels.  When the day arrives, the pricing mechanism will turn over to the physical market, away from the paper market, and the people shorting the paper market are going to have a religious experience.”

On the price of gold going down to possibly $600 per ounce, Embry says, “I take exception to people who say gold will go down to $600 an ounce.  If the price of gold went down that low, there would be no more gold mining activity. . . . Naturally, the paper shorts came up and crushed the (gold and silver) market at the beginning of September, and I think this will pass.   The key thing is you must own physical (gold and silver) outside of the banking system.”

More…

Posted at 1:21 PM (CST) by & filed under In The News.

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" 
Web-page: http://www.shadowstats.com

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.

More…

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.

More…

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.

More…

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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Posted at 2:47 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares the following with us.

- August Production Decline Was on Top of Downside Revisions to July Activity 
- Plunge in AutoManufacturing Highlighted Poor-Quality Seasonal Adjustments and Difficulties in Inventory Accounting

"No. 657: August Industrial Production" 
Web-page: http://www.shadowstats.com

 

Opinion: Gold may be a ‘buy’ as investors turn ever more bearish
By Mark Hulbert
Published: Sept 10, 2014 6:00 a.m. ET

CHAPEL HILL, N.C. (MarketWatch) — Gold is finally getting close to a bottom in prices.

That is the surprising conclusion of contrarian analysis, which for months now has stubbornly refused to turn positive on gold — even as the yellow metal has suffered a death by a thousand cuts. Just this week, for example, bullion hit a fresh three-month low — among indications that gold’s recent decline has violated some key technical levels.

But what contrarians focus on is market sentiment, and on that front there has been a big change: For the first time in a long time, a large number of short-term gold timers have decided to throw in the towel.

As a result, the market-timing community on balance is now more bearish than it has been in 14 months — which, according to the contrary logic of contrarian analysis, is a bullish development. The last time the typical gold timer was as gloomy as he is today, gold began a two-month rally in which it gained more than $200.

Consider the average recommended gold market exposure level among a subset of short-term gold market timers tracked by the Hulbert Financial Digest (as measured by the Hulbert Gold Newsletter Sentiment Index, or HGNSI). This average currently stands at minus 40.6%, which means that the typical gold timer is recommending that clients allocate nearly half their gold-oriented portfolios to going short the market.

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That’s a particularly aggressive bet that gold will keep declining, and — at least according to contrarian analysis — these timers are unlikely to be right.

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German Vice-Chancellor: Europe Requires Good Relationship With Russia
17:25 14/09/2014

MOSCOW, September 14 (RIA Novosti) – German Vice-Chancellor and Minister of Economy and Energy, Sigmar Gabriel, believes that good relations with Russia are necessary for Europe, he stated in an interview with the German newspaper Bild on Sunday.

"Europe needs Russia, we are immediate neighbors and a good neighborhood is essential," Gabriel said in the interview.

The Vice-Chancellor expressed hope that Europe could trust Russian President Vladimir Putin again.

"We specifically notice during major international conflicts, for example in Northern Iraq and Syria, that it would be good if we could work together with Russia to jointly solve the conflicts," the German politician stated.

While Gabriel believes the European Union’s tightened sanctions against Russia were necessary in "mitigating" Moscow, bolstered efforts to resolve the conflict in Ukraine are also needed. Attempts from Germany to gather all parties to the negotiating table need to continue. Gabriel urged Foreign Minister Frank-Walter Steinmeier and Chancellor Angela Merkel to push for a meeting "despite all the setbacks, again and again."

Relations have deteriorated between Russia and the EU following the situation in Ukraine.

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Jim Sinclair’s Commentary

This could unleash a reaction much larger than generally expected.

Scottish independence: Sterling on knife-edge as City braces for Scots vote
Gideon Spanier
Monday 15 September 2014

The City is bracing for “a major reaction” to sterling and shares following the Scottish independence result as the London market faces what could be its most turbulent week since the 2008 banking crisis.

Bank of England Governor Mark Carney is returning early from this week’s finance meeting of G20 countries in Australia to monitor the markets in person from Thursday and Chancellor George Osborne has cancelled his trip entirely.

Howard Archer, chief UK and European economist at research firm IHS Global Insight, warned the closeness of the opinion polls meant that City traders were facing “substantial uncertainty”.

He said: “There is likely to be a major reaction, particularly for sterling, whichever way the vote goes. A vote for independence will highly likely result in a further appreciable sterling sell-off. A vote for Scotland to remain in the UK is likely to lead to a significant relief rally for the pound.”

Mr Archer added that in the event of a Yes vote, there is a “risk that gilt yields could rise markedly due to foreign investors being wary about what will happen with UK debt.

“However, the Bank of England could counter this by delaying an interest rate hike and possibly even resuming quantitative easing.”

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UK Hints At Next Reserve Currency, To Issue Chinese Yuan-Denominated Bond
Submitted by Tyler Durden on 09/15/2014 12:41 -0400

Yuanification continues around the world. As The USA attempts to corral its allies in a ‘broad coalition’, an increasing number of people – including domestic economic policy advisors – are shifting away from the USD as primary reserve currency. However, the move by British Chancellor of the Exchequer George Osborne, announced Friday, is likely the most notable yet in the world’s de-dollarization. As Xinhua reports, the British government intend to be the first nation (ex-China) to issue Renminbi denominated bond and to use the proceeds to finance the government’s reserves of foreign currency. Osborne described this dialogue outcome as "a historic moment" and a statement of British confidence in the potential of the RMB to become "the main global reserves currency".

As Xinhua reports,

British Chancellor of the Exchequer George Osborne announced Friday that the British government intend to issue a Renminbi denominated bond and to use the proceeds to finance the government’s reserves of foreign currency.

"I can now announce that the UK government intend to be the first national government outside of China to issue a bond in China’s currency. We issued bonds in U.S. dollar before, now we will be issuing a bond in RMB," said Osborne in the press release of the Sixth China-UK Economic and Financial Dialogue (EFD).

Chinese Vice Premier Ma Kai and Osborne concluded the meeting of the Sixth China-UK Economic and Financial Dialogue in London.

Osborne described this dialogue outcome as "a historic moment" and a statement of British confidence in the potential of the RMB to become "the main global reserves currency".

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Posted at 5:58 PM (CST) by & filed under In The News.

My Dear Extended Family,

Cycles are best understood as probabilities for directional movement. Those gold cycles that turned down at $1900 have now turned up with the price of gold now plumbing previous lows which are by definition major support.

The price objective once this experience is over is $2100, and is where it will trade in time.

Sincerely,
Jim

 

Jim Sinclair’s Commentary

What is left of the middle class is living on its credit cards.

American credit-card debt hits a post-recession high
Published: Sept 13, 2014 8:02 a.m. ET

U.S. consumers may be relying too heavily on their plastic.

Americans added $28.2 billion to their credit cards in the second quarter of 2014, the largest amount in the last six years and nearly 200% more than in the second quarter of 2009, when the economy emerged from the depths of the Great Recession, according to new research from personal finance website CardHub.com. After paying off $32.5 billion owed during the first quarter of 2014, consumers ran up roughly 86% more debt during the following quarter.

The average household’s credit-card balance now stands at $6,802, up slightly from $6,628 in the first quarter, but still down from $8,431 at the end of 2008. By the end of the year, this figure is expected to exceed $7,000, reaching levels not seen since the end of 2010. U.S. consumers will be roughly $1,300 away from the credit card debt “tipping point,” where minimum payments become unsustainable and delinquencies skyrocket, the report says.

Experts say that consumer spending accounts for more than two-thirds of U.S. economic output, and credit-card spending in particular shows that people are feeling more confident about their job security and the economic recovery. Earlier this week, the U.S. Federal Reserve said that outstanding revolving credit, which is mostly made up by credit-card debt, increased by 7.4% in July to $880.54 billion, and has been gradually rising since falling to $840 billion in 2010.

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Jim Sinclair’s Commentary

Problems increase along with the equity markets. That is not a condition with legs.

World Bank warns of global jobs crisis
Sun, Sep 14, 2014, 9:05AM EDT

The world is facing a global jobs crisis that is hurting the chances of reigniting economic growth and there is no magic bullet to solve the problem, the World Bank warned on Tuesday.

In a study released at a G20 Labour and Employment Ministerial Meeting in Australia, the Bank said an extra 600 million jobs needed to be created worldwide by 2030 just to cope with the expanding population.

"There’s little doubt there is a global jobs crisis," said the World Bank’s senior director for jobs, Nigel Twose.

"As this report makes clear, there is a shortage of jobs — and quality jobs.

"And equally disturbingly, we’re also seeing wage and income inequality widening within many G20 countries, although progress has been made in a few emerging economies, like Brazil and South Africa."

He said that overall emerging market economies had done better than advanced G20 countries in job creation, driven primarily by countries such as China and Brazil, but the outlook was bleak.

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Jim Sinclair’s Commentary

The two very soft loans are education and transportation. This is the road to the new subprime crisis.

More car owners fall behind on auto loan payments
Chris Woodyard, USA TODAY 3:52 p.m. EDT September 9, 2014

More car buyers are falling behind when it comes to payments on their auto loans, a new report says.

The auto loan delinquency rate — borrowers who are at least 60 days behind on their loans — rose to 0.95% in the second quarter, up more than 9% from 0.87% the same quarter a year ago, reports TransUnion, the big credit bureau.

Even with the increase, though, the second-quarter delinquency rate is still below the average of 1.05% seen from 2007 to 2014, which encompassed the recession, TransUnion says. The peak came in the fourth quarter of 2008 when the rate hit 1.59%, and the low was in the second quarter of 2012 when it fell to 0.86%.

"Delinquency rates remain relatively low while auto loan balances keep rising," says Peter Turek, a TransUnion vice president, in a statement.

The amount owed on the average auto loan was $17,090 in the second quarter, up 4.1% from $16,410 in the prior year. Auto loan balances rose in every city, with the biggest increases in Houston and Phoenix.

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Jim Sinclair’s Commentary

The return of Braveheart?

Investors pull £17bn from UK as banks ratchet up Scottish independence pressure
Net flows out of Britain hit $27.3bn (£16.8bn) in August, the highest seen since the financial crisis
By Peter Spence, and Alan Tovey
8:01PM BST 12 Sep 2014

Investors have pulled money out of the UK at the fastest pace seen since the financial crisis of 2008 amid fears that Scotland will break away from the Union, triggering a broader political crisis.

Net flows out of Britain hit $27.3bn (£16.8bn) in August, the highest seen since Lehman Brothers collapsed, according to investment advisory firm CrossBorder Capital.

“Sterling outflows have been an issue since the end of June, but they really gathered pace in August,” said Michael Howell, managing director of CrossBorder Capital, who compiled the index of UK financial investment.

The report shows that inflows have “effectively collapsed”, said Mr Howell, adding that only Japan is now seeing money being pulled out of the country at a faster rate.

So far this year the UK has experienced a net $206bn (£127bn) outflow, as money available for financial investment left the country. In 2013, a net $63bn (£39bn) flowed into the nation’s economy.

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Pope Francis says World War Three has began
DEBKAfile September 13, 2014, 11:16 PM (IDT)

Pope Francis said Saturday that the conflicts around the globe today were effectively a “piecemeal Third World War.” During a visit to Italy’s war memorial to the World War One dead, he blamed the arms trade and “plotters of terrorism”for  sowing death and destruction. “This is the time to weep,” he said.

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Kohl’s And The Rest Of The Retailers Are In Deep Trouble
Submitted by Tyler Durden on 09/14/2014 09:10 -0400

Submitted by Jim Quinn of The Burning Platform

Kohl’s And The Rest Of The Retailers Are In Deep Doo Doo

“Facts are stubborn things, but statistics are pliable.” ? Mark Twain

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I never believe government manufactured numbers. They will always be adjusted, massaged, and manipulated to achieve a happy ending for the propagandists attempting to control and fleece the sheep. Yesterday, the government produced retail sales numbers for August that were weak and the corporate MSM propaganda machine immediately threw up bold headlines declaring how strong these numbers were. Positive stories were published on the interwebs and Wall Street hack economists were rolled out on CNBC, where the bubble headed bimbos and prostitutes for the status quo like Jim Cramer and Steve Liesman declared the recovery gaining strength. Woo Hoo.

If everyone else is whipping out that credit card, why aren’t you? Credit card debt has reached a new post recession high. They tell me consumer confidence is soaring. Forget about the 92 million working age Americans supposedly not in the labor force. Forget about real household income hovering at 1999 levels. Forget about median household net worth still 30% lower than 2007. Forget about what you see with your own two eyes in malls, strip centers and office parks as you motor around our suburban sprawl empire of debt. Those Store Closing, Space Available, and For Lease signs mean nothing.

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Posted at 11:20 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

John Williams shares the following with us.

- U.S. Economy Re-Entered Recession in 2013, Indicated by the BLS’s Annual Consumer Expenditure Survey 
- 2013 Total Money Income Fell Even Before Inflation Adjustment 
- Physical Gold, a Life Preserver That Could See Action Soon 
- Day-to-Day Timing of a Great Financial Disaster Is a Tough Call, But the Alarm Bells Are Sounding 
- Strong Headline Retail Sales Gain Was Not Statistically Significant

"No. 656: 2013 Consumer Expenditures, August Retail Sales, Gold" 
Web-page: http://www.shadowstats.com

 

Jim Sinclair’s Commentary

Now the Fed can blame housing on the weather again.

Autumnlike Chill, Frost to Grip East This Weekend
Alex Sosnowski, Expert Senior Meteorologist
September 13, 2014; 4:05 PM ET

Following a chilly rain during part of the weekend, the coolest air since the spring will settle over the Northeast Sunday night into Monday morning.

Temperatures are forecast to dip into the 50s from Boston and New York City to Philadelphia and Washington, D.C. The last time readings were this low was during the first couple of days of June in most cases and in late May in others.

The northern and western suburbs of the Interstate-95 cities will dip well down into the 40s. Cities forecast to drop into the 40s this weekend include Pittsburgh, Buffalo, New York, and Burlington, Vermont.

Some locations from northern Pennsylvania, upstate New York and northwestern New England will dip into the 30s. Provided skies remain clear and winds diminish, there is a risk of scattered frost for a few hours late Sunday night into Monday morning.

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Jim Sinclair’s Commentary

This is going to blow back hard on the EU soon.

Sweeping new US and EU sanctions target Russia’s banks and oil companies
Putin remains defiant as Russian companies such as Sberbank and Gazprom are barred from western capital in dramatic sanctions over Ukraine
Dan Roberts in Washington
The Guardian, Friday 12 September 2014 12.41 EDT

A monument to Ukrainian poet and writer Taras Shevchenko is silhouetted against an apartment building with a sign advertising Russia’s natural gas giant Gazprom, in Moscow. Photograph: Alexander Zemlianichenko/AP

Russia’s largest banks, oil producers and defence companies will be cut off from international finance and technology under sweeping new economic sanctions announced by the US and Europe that substantially escalate western political pressure over Ukraine.

In coordinated moves that may unnerve already jittery financial markets, the US Treasury and European Union announced on Friday that Russia’s largest bank, Sberbank, would be barred from accessing their capital markets for any long-term funding, including all borrowing over 30 days.

Existing 90-day lending bans affecting six other large Russian banks will also be tightened to 30-days, something US officials claim will sharply increasing their borrowing costs and deny access to important dollar-denominated funding sources.

Even more draconian measures were imposed on the Russian energy industry, where the US and Europe are attempting to shut down important new exploration projects in Siberia and the Arctic by barring foreign oil companies from providing any equipment, technology or assistance to deepwater, offshore, or shale projects.

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Jim Sinclair’s Commentary

Eventually Russia will retaliate against the EU, the easiest target.

Sweeping new US and EU sanctions target Russia’s banks and oil companies
Putin remains defiant as Russian companies such as Sberbank and Gazprom are barred from western capital in dramatic sanctions over Ukraine
Dan Roberts in Washington
Friday 12 September 2014 12.41 EDT

Russia’s largest banks, oil producers and defence companies will be cut off from international finance and technology under sweeping new economic sanctions announced by the US and Europe that substantially escalate western political pressure over Ukraine.

In coordinated moves that may unnerve already jittery financial markets, the US Treasury and European Union announced on Friday that Russia’s largest bank, Sberbank, would be barred from accessing their capital markets for any long-term funding, including all borrowing over 30 days.

Existing 90-day lending bans affecting six other large Russian banks will also be tightened to 30-days, something US officials claim will sharply increasing their borrowing costs and deny access to important dollar-denominated funding sources.

Even more draconian measures were imposed on the Russian energy industry, where the US and Europe are attempting to shut down important new exploration projects in Siberia and the Arctic by barring foreign oil companies from providing any equipment, technology or assistance to deepwater, offshore, or shale projects.

The bans will prevent previously active companies such as Exxon and Shell from dealing with five of the largest Russian oil producers and pipeline operators: Gazprom, Gazprom Neft, LukOil, Surgutneftegas, and Rosneft.

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