In The News Today

Posted at 9:23 PM (CST) by & filed under In The News.

Dear CIGAs,

Note that the talk of regulation on over the counter derivatives now speaks of a clearinghouse for standardized derivatives. Someone just recognized that all the previous derivatives written cannot be cleared because they are almost a transaction without standards. That means all those transactions outstanding are still weapons of mass financial destruction and lack any practical solution.

No break in general confidence can be tolerated therefore QE is moving full speed ahead.

Keep in mind that all actions have consequences – something that the last three generations have no concept of.

The strongest tool for influencing other nations, tax shelter nations and those deemed enemies is to block bank wire transfers in and out of the country digitally. Blocking electronic money transfers in today’s world basically puts the country out of business.

Note where North Korean sanctions are mentioned, money transfers are to be embargoed. Now you know why Switzerland is throwing out its American clients.

This is a reason why Asia’s interest in gold has grown by orders of magnitude. This is another reason why any gold the IMF wishes to sell will disappear instantaneously, never so much as seeing the marketplace.

Jim Sinclair’s Commentary

Yesterday’s dollar strength came from a statement at the end of the G8 meeting concerning Russia’s unending confidence in the US dollar. That triggered the algorithms to ram the US currency up more than 100 points.

There was a day when that would have been considered a currency crisis against upper bands and central bank intervention would be called in. Today 100 points in a currency move is just another day signifying absolutely nothing. Now the algorithms are trading with each other.

The dollar is history as the Universal Reserve Currency. You do not need a Nobel Prize to see that. The long term dollar trend is down, and will NOT be reversed here by spin.

I join trader Dan in cautioning you that you are not financed to play against the hedgies as traders. Invest with the trend and do not use margin.

Gold is getting ready to secure $1224 on its way to $1650 and then on to Alf’s numbers.

BRICs May Buy Each Other’s Bonds in Shift From Dollar
By Lyubov Pronina and Alex Nicholson

June 16 (Bloomberg) — Brazil, Russia, India and China are considering buying each other’s bonds and swapping currencies to lessen dependence on the U.S. dollar, Russian President Dmitry Medvedev’s top economic adviser said.

The leaders of the so-called BRIC countries will discuss measures to promote regional currencies when they meet later today,Arkady Dvorkovich told reporters in the Ural Mountains city of Yekaterinburg before the first BRIC summit.

“There will be talk about increasing the share of mutual trade in national currencies, possibly placing part of reserves in the financial instruments of partner countries,” Dvorkovich said.

Medvedev is hosting back-to-back summits of developing economies in Yekaterinburg as he seeks to lessen the world economy’s dependence on the U.S. dollar. Medvedev will hold talks later today with Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh and Brazilian President Luiz Inacio Lulada Silva.

Medvedev and Hu earlier today attended a summit of the Shanghai Cooperation Organization, which also includes the four former Soviet republics of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The Russian leader reiterated his intention to push for the creation of a “supranational currency” to challenge the U.S. dollar and encouraged China and the other Shanghai group members to use each other’s currencies for trade.

More…

Jim Sinclair’s Commentary

Turkey is also involved in the journey of world geopolitics going into 2012. Let’s keep a close eye on developments there.

Remember, the key to the success of the surge in Pakistan is SUSTAINABILITY.

Turkey issues warning, cuts rates
JUNE 17, 2009

Turkey’s prime minister defended the country’s military chief and warned against provocation Tuesday, as allegations of a military plot against the pious Muslim ruling party threatened to undermine civilian and military efforts to purge antidemocratic factions inside the state apparatus.

"Efforts to stir up mistrust between institutions will harm…Turkey as a whole," Prime Minister Recep Tayyip Erdogan said, after meeting the country’s top general to discuss the allegations. "The military High Command has shown responsibility and sensitivity from the moment this story broke.

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A good exit: Turkey is critical to peace in Iraq
By The Kansas City Star Editorial Board

ISTANBUL — Turkey, in what is being called neo-Ottomanism, is attempting to reconnect with the Muslim world, something Istanbul has largely avoided since the collapse of the Ottoman Empire in the early 20th century.

This is vital to the future of Iraq: Turkey is Iraq’s largest trading partner and probably will expand that role, which means Iraq’s economy is tied to Turkish trade.

Iraq even has oil pipelines running through Turkey. There has been a series of recent visits, back and forth, and Turkey this year agreed to release more reservoir water, essential to replenishing the dwindling Tigris that waters much of Iraq, including Baghdad.

But Turkey can, and probably will, reverse course if it disapproves of the future direction of northern Iraq, or Kurdistan, the region of jagged mountains just across the southern border here. Turkey has an estimated 12 million to 15 million Kurds. That has fed a 25-year-long Kurdistan Workers’ Party (PKK) insurgency, pushing for an independent Kurdish nation, which has left more than 35,000 dead.

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June1609Cartoon

Jim Sinclair’s Commentary

One of the major criterion for 2009-2011 is that Israel will make a major miscalculation.

Circumstances have gathered whereby Israel may have to make some hard decisions. Israel will never give up its demand for recognition of the right of Israel to exist in trade for anything.

The "Our Crowd" side tells me that literally.

On this part I am prone to say Israel will go it alone disagreeing, respectfully, with Mr. Friedman.

Video: Iranian Elections, Israel and the United States
June 16, 2009 | 1440 GMT

STRATFOR VIDEO
To view additional videos in the STRATFOR Insights series, click here.
RELATED INTELLIGENCE FILE
The Iranian Presidential Elections

In the latest installment of the STRATFOR Insights video series, CEO George Friedman discusses the tense future of the Middle East following the recent Iranian elections.

With Israel offering a Palestinian state on terms that are unacceptable to the Palestinians, and freshly re-elected Iranian President Mahmoud Ahmadinejad expected to continue his hard-line policies, how President Barack Obama moves forward merits close observation.

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Jim Sinclair’s Commentary

The world is mad. Do you think it might be a good idea if the Russian President and Finance Minister got on the same page?

The dollar will not survive the fall. The winter is going to be mean, cold and terminal to the US dollar.

Gold is going to fire up and out in a short period of time. On this I have total certainly

Medvedev calls for new reserve currencies
Tue Jun 16, 2:23 am ET

YEKATERINBURG, Russia – Russian President Dmitry Medvedev says the world needs new reserve currencies.

Medvedev told a regional summit Tuesday that the creation of new reserve currencies in addition to the dollar is needed to stabilize global finances.

Medvedev has made the proposal before. It reflects both the Kremlin’s push for greater international clout and a concern shared by other countries that soaring U.S. budget deficits could spur inflation and weaken the dollar.

Airing it at a summit meeting underlined the challenge to U.S. clout.

Medvedev spoke at a summit of the Shanghai Cooperation Organization, which includes China and four Central Asian nations.

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Jim Sinclair’s Commentary

"A new world economic order" is another way of saying goodbye to the dollar as the linchpin of business settlements.

Brazil’s Lula calls for new world economic order
Mon Jun 15, 2009 9:17am EDT
By Jonathan Lynn

GENEVA (Reuters) – Brazilian President Luiz Inacio Lula da Silva urged unions and workers on Monday to take advantage of the global financial crisis to help forge a new world economic order.

"I address myself now to the labor leaders," Lula told a global jobs summit at the International Labour Organization (ILO), a United Nations agency grouping governments, employers and worker representatives to promote good working conditions.

"This is an exceptional opportunity for all of you to think and develop proposals together with the employers and business leaders so that we can change definitely the relations between state and civil society and so that we can build our countries with much more fairness and much more solidarity," he said.

Lula said destabilizing surges last year in oil and commodity prices had been due to speculation.

"We cannot live with a financial system that speculates paper on top of paper without generating one single job, without manufacturing one screw, one shoe, one shirt, one tie," the former union leader told the conference to frequent applause.

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Jim Sinclair’s Commentary

You think that North Korea is screaming for attention and getting a busy answer on the world phone? What does a fellow who may not have all his paddles in the water do next?

DPRK threatens to launch pre-emptive strike against U.S

PYONGYANG, June 15 (Xinhua) — The Democratic People’s Republic of Korea (DPRK) has warned it would launch a pre-emptive attack against the United States.

Pak Jae Gyong, vice-minister of the DPRK People’s Armed Forces, made the remark at a mass rally that attracted some 10,000 people to denounce a newly endorsed U.N. Security Council Resolution, the official KCNA news agency said Monday.

"Under the present situation where the Korean People’s Army (KPA) is technically at war with the U.S. imperialists, and as the Armistice Agreement has lost its legal binding force, the KPA will promptly exercise the right to a pre-emptive strike to beat back the enemies’ slightest provocation," Pak said.

He threatened to deliver blows to the "vital parts of the U.S." and "wipe out all its imperialist aggressor troops no matter where they are in the world."

Meanwhile, Kim Ki Nam, secretary of the Central Committee of the Workers’ Party of Korea, told the rally that the U.N. resolution was "another grave provocation."

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