In The News Today

Posted at 11:26 AM (CST) by & filed under In The News.

Watch your thoughts for they become words.
Watch your words for they become actions.
Watch your actions for they become habits.
Watch your habits for they become your character.
And watch your character for it becomes your destiny.
What we think, we become.
My father always said that… and I think I am fine.
–Margaret Thatcher

Change your thoughts and you change your world.
–Norman Vincent Peale

 

Jim Sinclair’s Commentary

More commentary on the need for you and your children to end the social media madness of outing your entire life for all to see.

Is the IRS Stalking You on Social Media?
By Kate Rogers
Published April 09, 2013
FOXBusiness

If you are late filing your taxes or owe Uncle Sam money, you better think twice about what you post online. According to a news report, the IRS is using social media outlets to track potential tax cheats.

According to RT.com, Kristen Matthews, a partner attorney at Proskauer Rose, claims the IRS will begin checking taxpayers’ Facebook and Twitter pages to glean any information that might lead to an audit.

However, the IRS has denied the report. In a email statement toFOXBusiness.com, the agency said, “Suggestions that the IRS is using social media to target taxpayers for audit are wrong. Audits are based on the information contained on a person’s tax return, not a posting on a social media site.”

The RT reports the IRS will only probe online profiles of filers who are “flagged” for an audit to get more information. As shady as it might seem, it might be perfectly legal, according to FOX News senior judicial analyst Judge Andrew Napolitano.

“If you claim a deduction on your income tax returns, but the lifestyle you lead has manifested in social media that is inconsistent with that deduction, that would be a red flag and it would cause the IRS to dig a little deeper,” Napolitano told Stuart Varney Tuesday on Varney & Co.

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Jim Sinclair’s Commentary

Rounding top? Why not?

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Globe says Big Six banks hear "bail-in" explained
2013-04-08 06:01 ET – In the News

The Globe and Mail reports in its Saturday, April 6, edition that Ottawa’s plan to create a safety net, or "bail-in" mechanism, for Canada’s banks involves a new kind of investment similar to bonds that will be sold to large institutional investors. The Globe’s Grant Robertson writes the plan will give banks access to emergency capital to keep themselves solvent in the event of a major crisis. Unnamed sources say the concept is designed to prevent deposits or taxpayer money from being used to stabilize a bank. In its latest budget Ottawa said it would enact a bail-in regime in which a failing bank would use certain "liabilities" in order to stabilize itself. Since deposits are one form of bank liability, that wording prompted immediate comparisons to the banking crisis in Cyprus, where the government ordered banks to draw upon the accounts of large depositors for emergency funds. While the term "bail-in" has been used in both cases, Canadian officials want to distance their plan from any that would use consumer deposits for capital. Amid questions about the plan, a Finance Minister spokesman said no consumer bank deposits would be drawn upon in the Canadian bail-in scenario.

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Jim Sinclair’s Commentary

As a gold futures exchange transforms to a cash exchange, expect this phenomenon to appear first, followed by an increasing price of gold, followed by 100 percent margin, followed by delivery not in kind but cash settled.

Comex Gold Inventories Collapse By Largest Amount Ever On Record
April 9, 2013 | By Tekoa Da Silva

Click here to view the original article…

A stunning piece of information was brought to my attention yesterday. Amid all the mainstream talk of the end of the gold bull market (and the end of the gold mining industry), something has been discretely happening behind the scenes.

Over the last 90 days without any announcement, stocks of gold held at Comex warehouses plunged by the largest figure ever on record during a single quarter since eligible record keeping began in 2001 (roughly the beginning of the bull market). See chart below.

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Total drainage of physical inventories reached nearly 2 million oz.’s of gold, which at today’s prices represent roughly $3,000,000,000 dollars.

According to chart sage Nick Laird, this data indicates that, “Eligible stocks which are owned in LBMA/Comex good delivery form are being drawn down—which means they are being removed from the warehouses. As to how and why they are [being] removed, that is a mystery. [Up until now], eligible stocks were on the continual increase throughout the bull market. Now that trend has changed.”

What is most interesting in reviewing this chart data, is seeing where the largest drops have occurred. The largest inventory drainage is being reported from JP Morgan Chase & Scotia Mocatta warehouses. See charts below.

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JP Morgan Chase’s reported gold stockpile dropped by over 1.2 million oz.’s, or rather, a staggering $1.8 billion dollars worth of physical gold was removed from it’s vaults during the last 120 days.

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Scotia Mocatta’s gold stockpile removals were nominal in size when compared to JPM’s, but registered in at over 650k oz’s of gold, or over $1 billion dollars worth of physical gold was removed from its vaults over the last 90 days.

In further conversation with Nick on the implications of this chart data, he commented that, “The owners have taken [their gold] offsite, and it’s no longer stored in Comex warehouses…Has the bull market ended? Are people taking their gold out of Comex storage [because] of lack of trust? It’s a mystery, [but] I think it’s more the majority of long term holders are taking their gold elsewhere…because they no longer want to store at Comex.”

Bottom line: While mainstream voices question whether or not gold is still in a bull market, smart money appears to be questioning something else. They appear to be asking themselves, “Do we want to continue storing our physical metal within the Comex system? How can we best whisk it away from fraud, theft, or bankruptcy (including our own)?”

The timing of this trend change is also quite shocking, as it’s happening during a time in which public sentiment towards the metals are at their worse levels in years.

The boy who cried wolf has certainly cried many times over the years with regard to the Comex, but if there was ever a time to be concerned of a major market event or default—now might be it.

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Thanks,
Tekoa Da Silva
Bull Market Thinking 

Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable

Remember Jaws? In 1975, the small town of Amity was on the eve of the Fourth of July weekend, a time of celebration of the founding of this marvelous country. But just before the celebration was about to begin, a vicious shark attack occurs. Concerned about losing the money from the holiday tourist trade, the mayor and townsfolk ignore the warnings to keep people out of the water. But then after another shark attack, and yet another, the town’s leadership finally grasps the peril, but not before more disasters occurred.

Jaws, writes John Whitehead, wasn’t just a simple story about sharks. Instead, it was a social commentary about how a love of money can blind us to averting preventable disasters.

Fast forward to the financial meltdown of 2008 and what do we see? America again was celebrating. The economy was booming. Everyone seemed to be getting wealthier, even though the warning signs were everywhere: too much borrowing, foolish investments, greedy banks, regulators asleep at the wheel, politicians eager to promote home-ownership for those who couldn’t afford it, and distinguished analysts openly predicting this could only end badly. And then, when Lehman Bros fell, the financial system froze and world economy almost collapsed. Why?

The root cause wasn’t just the reckless lending and the excessive risk taking. The problem at the core was a lack of transparency. After Lehman’s collapse, no one could understand any particular bank’s risks from derivative trading and so no bank wanted to lend to or trade with any other bank. Because all the big banks’ had been involved to an unknown degree in risky derivative trading, no one could tell whether any particular financial institution might suddenly implode.

Since then, massive efforts have been made to clean up the banks, and put in place regulations aimed at restoring trust and confidence in the financial system. But the result in terms of dealing with the basic problem, according to a terrific article by Frank Partnoy and Jesse Eisinger in The Atlantic entitled “What’s Inside America’s Banks?” is failure.

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Jim Sinclair’s Commentary

Today he ordered visitors to leave North Korea based on pending war.

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