In The News Today

Posted at 3:25 PM (CST) by & filed under In The News.

“In politics, nothing happens by accident. If it happens, you can bet it was planned that way.”
–Franklin Delano Roosevelt

Dear CIGAs,

Let’s talk street smarts. There is nothing mysterious about this. This is not your cookie cutter type of counterfeit operation, if they are, in fact, fakes.

Governments in times of war counterfeit the opponents currency and government bearer bonds to balloon the money supply, inflicting injury by inflation. These instruments, even not in official figures, act the same as a massive increase in the money supply. $134 billion is not massive by today’s standards but how do you know this is the only suitcase? Nobody is that stupid with funds of this size, even if counterfeit. You can be sure there is more where this came from. The probability then is that the $134 billion is not all of it and might just be the tip of the iceberg.

The above is common knowledge amongst intelligence services.

These are bearer bonds so you only need to have a few purchased in the market to successfully kill the serial number by counterfeiting your own serial numbers.

You use these counterfeit instruments to make loans in modest amounts at various less-than-ethical international operations, preferably those that specialize in illicit funds. Lay a hundred million on the banker and get all the loans you want.

If the government bearer bonds are real then some big guy is making a run for it. This is top dog money, and would indicate a serious and well informed reasoning on the part of the entity running for the hills. People with this type of money are not usually stupid. That amount of real bearer bonds is a reach for drug funds. It would be governmental.

Yeah, mysterious, only to the naive world.

The Mysterious Case of the Seized Bearer Bonds, Worth $134 Billion
Sat Jun 13, 2009 at 03:50:09 PM PDT

The US media has been generally silent about $134 billion in bearer bonds seized by Italian police at the Swiss border. On June 8, AsiaNews reported:

Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar each.

Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones.

Karl Denninger has been following the story, and it appears to be true that this vast sum was, in fact, seized.

It is a mystery why the story is receiving coverage in Europe and Asia, but not in the US. Rumors have been swirling about possible involvement of the Japanese, Chinese, and/or Korean governments, with the last being more likely if the bonds are counterfeit. Whether real or fake, the apparent fact of the smuggling raises all kinds of questions, with no easy answers. Mr Denninger applies his considerable intelligence to the matter, in Sherlock Holmes fashion:


Jim Sinclair’s Commentary

-German outlaws getting titanium chains put on their Mercedes Unimogs.
-German readership of JSMineset increases ten-fold.
-Vending machine maximum life expectancy 25 minutes from installation

Gold sold like chocolate from German vending machines
By Murray Wardrop
Published: 7:30AM BST 17 Jun 2009

Shoppers in Germany will soon be able to buy gold as easily as bars of chocolate after a firm announced plans to install vending machines selling the precious metal across the country.

TG-Gold-Super-Markt aims to introduce the machines at 500 locations including train stations and airports in Germany.

The company, based near Stuttgart, hopes to tap into the increasing interest in buying gold following disillusionment in other investments due to the economic downturn.

Gold prices from the machines – about 30 per cent higher than market prices for the cheapest product – will be updated every few minutes.


Jim Sinclair’s Commentary

Hedgies object to using their title in drug related article.

Mexico cocaine ‘hidden in sharks’

The Mexican Navy says it has seized more than a tonne of cocaine hidden inside the carcasses of frozen sharks.

Armed officers found slabs of cocaine inside more than 20 sharks aboard a freight ship in the Gulf coast port of Progreso in Yucatan state.

Correspondents say cartels are coming up with increasingly creative ways of smuggling drugs into the US.

Shipments of cocaine have also been discovered hidden inside sealed beer cans, religious statues and furniture.

"We are talking about more than a tonne of cocaine that was inside the ship," said Mexican Navy Commander Eduardo Villa.


Jim Sinclair’s Commentary

As in all these things where false flags fly, who was, if there is, the doer?

Report: Carter escapes assassination attempt on visit to Gaza
Jun 16, 2009 17:34 | Updated Jun 16, 2009 19:59

Hamas said it foiled an attempt by Palestinian terrorists to assassinate former US president Jimmy Carter during his visit to the Gaza Strip on Tuesday, Palestinian sources told news agencies.

Israeli security sources said that the Shin Bet (Israel Security Agency) had learned of plans to target Carter and had passed on the information to the former president’s security detail in "real time."

According to Palestinian sources, terrorists linked with al Qaida hid a number of improved explosive devices along a road that Carter’s convoy was scheduled to travel on inside Gaza. Hamas forces reportedly uncovered the IEDs and destroyed them.

Ismail Shahwan, spokesman for the Hamas Ministry of the Interior, denied that an Al-Qaeda-linked group had planned to assassinate Carter.

Shawan said no explosives were discovered near the Erez border crossing. He said that the visit went according to the plan.


Jim Sinclair’s Commentary

According to financial TV the president has nothing better to do than simply make noise on this subject. From me please accept the fact that what is said herein is serious.

China President Hu: Should Diversify Intl Monetary System
* JUNE 16, 2009, 8:56 P.M. ET

BEIJING (Dow Jones)–The international monetary system should be further "diversified," China President Hu Jintao said Tuesday at a summit with leaders of four large developing countries, in a likely reference to the dominance of the dollar as a reserve currency.

"The system for regulating the issuance of major reserve currencies should be improved," Hu said at the BRIC summit with the leaders of Brazil, Russia, and India, according to a text of his remarks posted on the Chinese government’s Web site.

Hu didn’t elaborate on desired reforms of the system, only adding that the exchange rates of major reserve currencies should be kept stable.

Russian President Dimitry Medvedev said before the start of the meeting that he would raise the issue of the U.S. dollar as the global reserve currency.

Hu’s comments are in line with previous Chinese government statements on the reserve currency issue.


Jim Sinclair’s Commentary

Today you pay and all is forgiven. What’s ten billion anyway when the funds are merry-go-round money?

Goldman’s Blankfein issues apology as bank prepares to repay $10bn
Goldman Sachs chairman Lloyd Blankfein has publicly apologised for the first time for the investment bank’s participation in the "market euphoria" that spurred the global financial crisis.
By James Quinn Wall Street Correspondent
Published: 6:00AM BST 17 Jun 2009

Ahead of Goldman’s repayment of its $10bn (£6bn) in US taxpayer’s funds later today, Mr Blankfein also admitted that the bank failed to speak out on the problems occurring in the market.

"We know that we have an explicit contract with our shareholders to be responsible stewards of their capital . . . we regret that we participated in the market euphoria and failed to raise a responsible voice."

The stark admissions are contained in letters to four leading US politicians who are the chairmen and ranking members of Capitol Hill’s two leading financial services committees.

It comes as President Barack Obama prepares to unveil sweeping changes to the US financial regulatory framework in an attempt to make sure the crisis never happens again.

In the letters, copies of which have been seen by The Daily Telegraph, Mr Blankfein also warns that stability in the financial markets can only return if the industry accepts that some of its practices are "unhealthy".


Jim Sinclair’s Commentary

Ah yes, government statistics so universally accepted are showing great strains.

Discrepancies in America’s accounts hide a black hole
By Daniel Gros
Published: June 15 2006 03:00 | Last updated: June 15 2006 03:00

The global financial system seems to have a black hole at its centre. Over the last two decades, US residents have sold a total of about $5,500bn worth of IOUs to foreigners, yet the officially recorded net investment position of the US has deteriorated only by a little more than half of this amount ($2,800bn). The US capital market seems to have acted like a black hole for investors from the rest of world in which $2,700bn vanished from sight – or at least from the official statistics.

How can $2,700bn disappear?

It is often argued that the US can simply make large capital gains on its gross positions because its assets are denominated in foreign currency and its liabilities in dollars. However, the available data indicate that over the last two decades this factor has netted the US at most $300bn-$400bn. This still leaves a loss of well over $2,000bn to be explained.

The explanation comes in two tranches of about $1,000bn each.

The first source of accountingrevenues for the US derives from an anomaly in the item "reinvested earnings" on foreign direct investment in the US balance of payments. This item improves the current account by about $100bn a year because foreign companies systematically report abnormally low profits for their US operations to avoid US corporate income taxes. If one assumes that foreign companies earn the same rate of return on their direct investment in the US as on their portfolio investment in equity, the US current account would deteriorate by about $100bn. Properly measured, the country’s current account deficit would thus be about 1 per cent of gross domestic product larger than officially reported.

The underreporting of the current account deficit implies that US indebtedness is also underestimated. Over the past two decades the cumulative correction for the anomaly in "reinvested earnings" would lead to a higher US net debtor position of about $1,000bn.


Jim Sinclair’s Commentary

The line is drawn in the sand across the 28 year uptrend line of the US 30 year long bond.

Every tool to keep that line intact will be used including the Beige Book.

Fed Weighs Using Statement to Damp Rate Speculation (Update1)
By Craig Torres

June 17 (Bloomberg) — Federal Reserve officials are considering whether to use next week’s policy statement to suppress any speculation they’re prepared to raise interest rates as soon as this year.

While policy makers have signaled they accept an increase in longer-term Treasury yields as the economy improves, some are concerned at any premature anticipation of rate rises. Fed staff have examined the Bank of Canada’s public intention of foregoing an increase until 2010, according to a person familiar with the matter, without concluding the statement has proven effective.

One option would be to emphasize in the June 24 statement that increasing slack in the job market and U.S. manufacturing will keep inflation low and a recovery muted, said Michael Feroli, an economist at JPMorgan Chase & Co. in New York and former member of the Fed Board staff. At stake: keeping borrowing costs low enough to foster a sustained recovery, without binding the central bank to a single course of action.

“There are ways of highlighting their low rate expectations without over-committing,” said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey.

Chairman Ben S. Bernanke and his fellow Federal Open Market Committee members gather in Washington June 23-24. Economists forecast they will keep their target for the benchmark federal funds rate at zero to 0.25 percent. Policy makers will also discuss any changes to their commitment to purchase as much as $300 billion of Treasuries and $1.45 trillion of housing debt.


Jim Sinclair’s Commentary

Administration pressure is on the Fed not to do the same, not to do less, but to do more money printing now named QE. That you can take to the bank!

On one hand here is more power. On the other hand, Ben, do you like your job, status and new found wealth? If you do, prime that pump to infinity.

Obama Praises Bernanke, Declines to Comment on Reappointment
By Scott Lanman

June 16 (Bloomberg) — U.S. President Barack Obama praised Federal Reserve Chairman Ben S. Bernanke for doing an “extraordinary job” while declining to comment on whether he plans to nominate the central bank chief for a second term.

Bernanke has “done an extraordinary job under extraordinary circumstances,” Obama said today in an interview with Bloomberg Television at the White House. On a potential reappointment, Obama said, “I’m not making news on that today.”

Bernanke, 55, has been responsible for the Fed’s unprecedented response to the financial crisis and recession, including lowering the main interest rate almost to zero; purchasing as much as $1.75 trillion in Treasuries and housing debt; and starting emergency-loan programs to aid bond dealers, mutual funds and corporations.

A former Princeton University economist, Bernanke was appointed by Obama’s predecessor, George W. Bush, to succeed Alan Greenspanas the U.S. central bank chief in February 2006. Bernanke’s initial four-year term as chairman ends Jan. 31, and his re-nomination or a new candidate would require Senate approval.

Bernanke, a Republican, has a separate 14-year term as a Fed governor that ends in 2020. Bush appointed him to the Fed Board of Governors in 2002 and then as chairman of the White House’s Council of Economic Advisers in 2005.


Jim Sinclair’s Commentary

Thank God, my upcoming trip to China is on China Air. The unpaid flight attendants will be flying the plane. The plane will be fueled with AvGas. The unpaid food will be from Juan’s Greasy Spoon. For your sake don’t drink the water.

The unpaid cleaners will have the lavatories looking like the super discount flights in Indian Air in the 70s.

British Airways asks staff to work unpaid for up to a month

LONDON, England (CNN) — British Airways is asking thousands of its staff to work for free for up to four weeks, spokeswoman Kirsten Millard said Tuesday.

In an e-mail to all its staff, the airline offered workers between one and four weeks of unpaid leave — but with the option to work during this period. British Airways employs just more than 40,000 people in the United Kingdom.

Last month, the company posted a record annual loss of £400 million ($656 million).

Its chief executive declared at the time there were "absolutely no signs of recovery" in the industry.

"In 30 years in this business and I’ve never seen anything like this. This is by far the biggest crisis the industry has ever faced," said Willie Walsh, British Airways’ chief executive.

A spokesman for one of Britain’s biggest unions said its workers could not afford to work for free for a month.


Jim Sinclair’s Commentary

All trends start in California, and then explode in all the states with the exception of Alaska.

Florida unemployment fund running dry

WEST PALM BEACH, FL — The state of Florida is burning through money to pay unemployment claims.

There is $534 million in the Unemployment Compensation Trust Fund but the state is paying out $65 million a week.

The fund could be dry by August and the state will have to borrow money from the federal government to pay claims.

Nearly a million Floridians are out of work these days.

"There will be no lapse in benefits. Everyone will receive their benefits who is entitled to them," says AWI Spokesman Robby Cunningham.

Uncle Sam isn’t the only one coming to the rescue.



Jim Sinclair’s Commentary

You will note this morning that the party line being blasted over the airwaves is that the position of the BRICs concerning divestiture of dollars is nothing but talk. As proof of this position, a measure of the action of the dollar in this bear market rally is being interpolated in dollar treasury instruments. Airwave media is calling US dollar bonds showing a gain of 11% with interest added, utilizing the ten year as a measure. This position has been repeated at least 15 times since the Asian session opened last US evening.

There is no question that the "line drawn in the sand" by the Chairman of the US Federal Reserve has been drawn directly across the long term up trend line of 28 years on the 30 year long US Treasury bond.

Flash Report :

It is my strong opinion that Bernanke is committed to not letting this up trend line break down, using all the power of the Fed in Quantitative Easing. That means the Fed will buy practically unlimited offerings at auction and in the market should it be necessary.

The problem is market, money and speculators can overwhelm all central banks combined should confidence be lost. Confidence has been maintained by an almost unlimited creation of new money.

Be assured consequences cannot be avoided. The long term uptrend line of the 28 year long bond market is the confidence line and therefore becomes the most important line ever drawn in an attempt to determine the future of an empire.

Nobody in their right mind wants what is coming, but airwaves and hot air is no mendicant. Failure to allow economics to take its natural course in bankruptcy of the deficient, central bank support for the OTC derivative vehicle by the previous Chairman and bubble making all brought this plague upon us.

Economic seer, Chris, starts his presentations with the desire to be totally wrong but the conviction he is not.

Master Technician Alf takes no joy in what he sees but he sees it.

Nobody could have a more miserable circumstance than economic historian and master timer, Armstrong, but April 19th was dead on like many of his prediction. If he is wrong he will not remain wrong for more than a few weeks. I see him as calling one more time in the black of the bull eye.

Jim Sinclair’s Commentary

Get the real figures by subscription. It is worth it to know the true story:

– May CPI-U Annual Deflation of 1.3% versus SGS-Alternate 
Estimate of 6.1% Inflation
– Seasonal Adjustments Continue to Skew Inflation Reporting
– May Annual Production Fell at Fastest Pace Since
Post-World War II Production Shutdown
– May Annual Decline in Housing Starts Continued Record Fall-Off,
Monthly Gain Lacked Statistical Significance