In The News Today

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Jim Sinclair’s Commentary

Judging from my emails today mostly populated by gold bears doing their best to depress me, gold should do exactly what I expect it to do.

Petunia says not to listen to those scared shorts.


Jim Sinclair’s Commentary

People are starting to understand what happened.


New York Times figures out that conspiracies really ARE rigging markets

Submitted by cpowell on 02:27AM ET Thursday, July 5, 2012.
Section: Daily Dispatches

It’s probably only another few decades now before the newspaper gets around to the gold and silver markets.

Rigged Rates, Rigged Markets
From The New York Times
Tuesday, July 3, 2012

Marcus Agius, the chairman of Barclays, resigned on Monday, saying "the buck stops with me." His was the first departure since the British bank agreed last week to pay $450 million to settle findings that, from 2005 to 2009, it had tried to rig benchmark interest rates to benefit its own bottom line.

Mr. Agius was right to go and the bank’s chief executive, Robert Diamond Jr., should follow him out the door. But the investigations cannot stop there.

The rates in question — the London interbank offered rate, or Libor, and the Euro interbank offered rate, or Euribor — are used to determine the borrowing rates for consumers and companies, including some $10 trillion in mortgages, student loans, and credit cards. The rates are also linked to an estimated $700 trillion market in derivatives, which banks buy and sell on a daily basis. If these rates are rigged, markets are rigged — against bank customers, like everyday borrowers, and against parties on the other side of a bank’s derivatives deals, like pension funds.

… Dispatch continues below …


Barclays is only one of more than a dozen big banks that provide information used to set the daily rate for Libor and Euribor. The settlement, struck with regulators in Washington and London and with the Department of Justice, indicates that the bank did not act alone. It shows that unnamed managers and traders of Barclays in London, New York, and Tokyo colluded with or prevailed upon bank employees who provide the benchmark data to make false reports. The aim was to bolster Barclays’ trading positions and to aid or counteract other banks’ attempts at manipulation.

The evidence, cited by the Justice Department — which Barclays agreed is "true and accurate" — is damning. "Always happy to help," one employee wrote in an e-mail after being asked to submit false information. "If you know how to keep a secret, I’ll bring you in on it," wrote a Barclays trader to a trader at another bank, referring to an attempt to align their strategies for mutual gain.

If that’s not conspiracy and price-fixing, what is?

The Justice Department has left open the possibility of prosecuting officers or employees of Barclays. But it has agreed not to prosecute the bank itself, in part because Barclays was the first to cooperate in the investigation and has agreed to keep cooperating. Such an agreement makes sense only if that cooperation will allow prosecutors to nail other banks that have been involved in setting the rates, including potential cases against Citigroup, JPMorgan Chase, and HSBC, and people who work there.

To date, the Justice Department has not distinguished itself in prosecuting major banks or their executives for conduct leading up to and during the financial crisis. But with Barclays now cooperating, the "Libor scandal" is another chance for government prosecutors to unmask and punish financial wrongdoing.

Jim Sinclair’s Commentary

Whatever is required here and there will be provided by QE.

BoE Prints Money Again to Boost to UK Economy
Published: Thursday, 5 Jul 2012 | 7:47 AM ET

The Bank of England launched a third round of monetary stimulus on Thursday, announcing it would restart its printing presses and buy 50 billion pounds ($78 billion) of asset purchases with newly created money to help the economy out of recession.

The move was widely expected after BoE Governor Mervyn King said last month the economic outlook had deteriorated since the BoE called a halt to its second round of asset purchases – also known as quantitative easing – in May.

"Against the background of continuing tight credit conditions and fiscal consolidation, the increased drag from the heightened tensions within the euro area meant that, without additional monetary stimulus, it was more likely than not that inflation would undershoot the target in the medium term," the BoE said in a statement.

The BoE has bought 325 billion pounds of government bonds to date, and the purchases announced on Thursday take this total to 375 billion.

They will be spread over four months – longer than many economists expected, and a minority had expected the BoE to conduct 75 billion pounds of purchases.

Gilt futures – which had rallied in the run-up to the decision – fell by more than 30 ticks to hit a session low after the data. Sterling rose versus the dollar.


Jim Sinclair’s Commentary

For those of you succumbing to the deflationist anti gold argument, please give this Bloomberg interview serious consideration.

Click here to watch the interview…


Jim Sinclair’s Commentary

QE to infinity is the only can kick that politicians have access to, therefore it is inevitable that it will without any doubt whatsoever occur here and there.

Investment Outlook, July 2012
What’s In A Name?
by William H. Gross, PIMCO

 Not only banks and insurance companies but sovereign nations as well cannot all be counted on to guarantee a return of principal, let alone a return on investment.

 An authentic debt crisis – which the world is now experiencing – can only be ultimately cured in two ways: 1) default on it, or 2) print more money in order to inflate it away.

 There are very few clean dirty shirts in this world. Timing in investment markets is critical and at the moment the U.S. is considered to be the cleanest.

What’s in a name? I wish I’d asked my parents how they came up with mine, because I’ve never really been a good “Bill.” That is not to say that I’m uncomfortable in my own skin – I usually am – but I’ve never really been at ease with the name. Perhaps it’s genetic because the discomfort seems to run in the family. Who could blame my father I suppose for insisting on “Dutch” as opposed to Sewell Gross the IV! Imagine: a nameological tyranny of four successive Sewells! It ended with him, but then there was my brother Craig who insisted on Chip and my sister Lynn who in her fifties changed her name to Lyn. At least I didn’t have to worry about calling her by the wrong name, although I have boo-booed on birthday cards. In any case, we Grosses seem to dislike our names.

Having kids, however, allowed me to set the record straight or at least mutate those genes which kept rejecting given names that seemed appropriate to parents, but not to Gross progeny. My first attempt at cracking the code came with my first son, Jeff. I liked “Jeff.” It was short, masculine and was the first name of a Duke basketball star in the 1960s. I’d be a better Jeff than a Bill. Next up was Jennifer, whose name came from a Donovan number one hit song and then there was Nick. Nick was actually Sue’s favorite name, but I easily conceded. Who couldn’t like Nick? Saint Nick, just in the Nick of time, Nick, Nick, Nick. I would’ve been a good Nick.


Jim Sinclair’s Commentary

What Barclays did for central banks (plural) was to actually say there was a Libor under 7% at the height of the crisis in the end of 2008 to the first quarter of 2009.

At the peak of that crisis banks would not lend to banks, therefore in fact Libor did not even exist.

There are problems within the Banksters fraternity. MSM and MOPE keep North America dumbed down but that does not make anything go away.

The Largest Banking Scandal of the 21st Century
Christopher Barker – July 4, 2012

Although the century is still young, this is shaping up to be the banking scandal of the century thus far.

On the heels of last week’s announcement that British bank Barclays will fork over $450 million in penalties to U.S. and British authorities for manipulating the interest rates at which banks lend to each other (known as LIBOR for U.S. dollar lending, and EURIBOR for euro-denominated debt), the scope of the scandal continues to grow. Further news of a pending $233 million penalty against Royal Bank of Scotland — which is 82% government-owned after that institution’s quasi-nationalization — comes as a particularly painful twist for British taxpayers.

But it would be a major mistake to view this emerging scandal as a British affair. Both Citigroup (NYSE: C ) and Swiss bank UBS (NYSE: UBS ) join London-based giant HSBC Holdings (NYSE: HBC ) among those explicitly implicated by U.K. Chancellor of the Exchequer George Osborne. U.K. periodical Daily Mail reports the list may grow to more than 20 banks involved in these efforts to rig the LIBOR and EURIBOR rates, and it lists JPMorgan Chase (NYSE: JPM ) , Germany’s Deutsche Bank (NYSE: DB ) , and Japan’s Bank of Tokyo Mitsubishi among "others under scrutiny."

This is a global banking scandal, with potential victims equally widespread. Providing context for the $160 million penalty assessed to Barclays by the U.S. Department of Justice last week, Assistant Attorney General Lanny Breuer explained: "Because mortgages, student loans, financial derivatives, and other financial products rely on LIBOR and EURIBOR as reference rates, the manipulation of submissions used to calculate those rates can have significant negative effects on consumers and financial markets worldwide." Rolling Stone reporter Matt Taibbi reminds us that "almost every city and town in America has investment holdings tied to Libor."