Jim’s Mailbox

Posted at 6:27 PM (CST) by & filed under Jim's Mailbox.


I agree totally. This Cyprus thing (and I’ve been reading your commentaries) has the potential to be a classic black swan event, ie., something that comes out of nowhere and that the markets were not anticipating it at all. The fact that their parliament today voted against this hugely crazy IMF proposal won’t change a thing. If the S&P500 closes below 1520, I suspect the top will be in on the equity market rally out of the March 2009 bottom.



I would favor a serious reaction, but not the top in the Dow being in.

There was a time when the Zimbabwe Stock Index was the best performing stock index in the world.




Is this for real? Apart from convincing more people to get out of the banking system how does this fit in?

Thank you for being our "fly on the wall."

CIGA Larry


No. Whomever wrote this is just a sensationalist looking to jump on a story. This was being pushed before today. Let us see if it will still be pushed tomorrow.

The IMF is at the root of this in Cyprus and in New Zealand considering them too small to matter, but the IMF had their head handed to them today.


CONTAGION! Depositor Haircut Bail-Ins Spread to New Zealand, Gov’t Discussing Cyprus Style Solution for Bank Failure!


Dear Jim,

The following is from Sprott.com:

CIGA David

“Every month, the US Census Bureau releases the FT900 document, which outlines US International Trade Data. Going through this document, we were intrigued to see that in December 2012 the US exported over $4B worth of gold and imported around $1.5B worth of gold, representing a net export of $2.5B or almost 50 tonnes1. This surprising number led us to look at the previous releases of US International Trade Data which go as far back as 1991 – what we found was truly shocking. Not only has the US been consistently exporting large quantities of gold on a net basis, the amount of gold the US has been exporting is above and beyond what the US should be capable of exporting.”


Failed Experiment Could Mean Subtle Change In Message of the Market Ahead

While confiscation, passed as a tax, plays out in Europe, the vast majority of investors are likely to underestimate the magnitude of the battle underway.

Jim said it best, so why rehash it?

The Central Bank of Cyprus doesn’t even know how big the Russian deposits are because it is held as secret at the behest of the Russians. It is a secret banking system set up for the Russians, by the Russians, and the IMF has just taken a large bite out of that elephant.

Part of the result of all of this is the Russian elite will now move heavily out of currencies and into gold. Going forward, the Russian sovereign entity will now support the price of gold and it will be for the benefit of the Russian oligarchy. This will also serve to bring Russian and Chinese financial interests closer together, and, in time, will finally result in freeing the gold market from Western price manipulation and influence.


Although the usual ‘lock down’ of markets ahead of the Fed meeting should reduce volatility over the short-term, it shouldn’t prevent a subtle change in the message of the markets in the coming weeks.  The Cyprus experiment has made it clear that QE remains the only tool available to handle the world’s evolving debt crisis without serious social and political consequences.  Since QE is the grease that lubricates the wheels of higher assets prices, a big correction ahead for stocks would not be a high probability event.

Watch gap support (chart).  If the gap is filled on lighter volume, it suggests waning downside force and a bullish setup.

Chart:  Nasdaq OTC