In The News Today

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Jim Sinclair’s Commentary

Be prepared. GOTS.

The economies of the Western world are about the crater. Taper discussions are a complete and dark joke.

From John Williams’;

-In Ongoing Stagnation, Durable Goods Orders Are Suggestive of Pending Downturn
– New-Home Sales Are in Renewed Contraction
– Existing-Home Sales Jump But Remain of Questionable Quality

"No. 551: July New Orders for Durable Goods, New- and Existing-Home Sales"

Jim Sinclair’s Commentary

The birthing process of the “Euro $ R Standard," the final and Great Reset.

"The euro grew to 23.7 percent of global central banks’ foreign holdings in the first quarter, from a low of about 17 percent in 2000, the International Monetary Fund said in June.

The Australian and Canadian dollars accounted for 1.6 percent each, according to the Washington-based fund, which identified them separately for the first time to recognize their increasing role as reserve assets. The U.S. dollar’s proportion of global reserves shrank to 62.2 percent this year from 71.5 percent in 2000, according to the IMF."

Capital Flight Drains Reserves as Rupee, Rupiah Fall: Currencies
By Candice Zachariahs & Lilian Karunungan – Aug 26, 2013 12:38 AM GMT-0300

Asian nations are depleting foreign reserves as they seek to bolster their currencies while investors pull billions of dollars from the region.

Of the 10 Asian central banks with the largest reserves, six have cut their holdings this year, led by a record 18 percent reduction by Indonesia, data compiled by Bloomberg show. Their reserves are rising at the slowest pace in data going back to 2000. Holdings in Asia probably contracted once price moves are taken into account, Citigroup Inc. estimates.

Asian nations are getting hit particularly hard from the rout in emerging markets, with the Bloomberg-JPMorgan Asia Dollar Index poised for the biggest annual drop since 2008. Standard & Poor’s warned last week that the flight of capital from Asia may trigger higher financing costs, especially for those nations with large deficits in their current accounts.

Countries in the region will “see a degree of reserves usage as they seek to stabilize their currencies during periods of heightened financial market volatility,” Sacha Tihanyi, a senior currency strategist at Scotiabank in Hong Kong, said by e-mail Aug. 22. “Indonesia and India are still highly likely to see further depletion in their reserves.”



Jim Sinclair’s Commentary

The discussion of QE taper is as foolish as taper would be at this time.

U.S. business orders sink 7.3% in July
Fewer contracts for Boeing jets, military hardware drive decline
By Jeffry Bartash, MarketWatch
Aug. 26, 2013, 8:44 a.m. EDT

WASHINGTON (MarketWatch) — Orders for big-ticket U.S. goods sank 7.3% in July, mostly because of fewer contracts for jetliners and large military goods, the government said Monday.

The decline in orders for durable goods — the first in four months — was somewhat expected after a steady increase in demand since spring. Yet the July report shows little change in the overall trajectory of a slowly growing U.S. manufacturing sector.

Economists surveyed by MarketWatch had expected orders to drop a seasonally adjusted 4.9% in July, mainly because of a sharp decline in orders for Boeing commercial jets. Aircraft orders plunged 52.3% after runups of 33.8% in June and 67.6% in May.

Boeing said it signed 90 contracts in July, down from 287 in the prior month. Orders for expensive aircraft can swing sharply from month to month and skew the durables report.

Orders for cars and trucks, however, rose 0.5% as demand for autos remained strong.

Stripping out the volatile transportation sector, orders fell a much smaller 0.6%, the Commerce Department said.

Makers of computers, electronics, electrical equipment and appliances saw orders decline in the 3% to 4% range. Orders were soft for other major industrial sectors as well.


Jim Sinclair’s Commentary

Unintended consequences.

Cyprus Bank’s Bailout Hands Ownership to Russian Plutocrats
Published: August 21, 2013

LIMASSOL, Cyprus — When European leaders engineered a harsh bailout deal for this tiny Mediterranean nation in March, they cheered the end of an economic model fueled by a flood of cash from Russia. Wealthy Russians with money in Cyprus’s sickly banks lost billions.

But the Russians, though badly bruised, are now in a position to get something that has previously eluded even Moscow’s most audacious oligarchs: control of a so-called systemic financial institution in the European Union.

“They wanted to throw out the Russians but in the end, they delivered our main bank to the Russians,” said the Cypriot president, Nicos Anastasiades, in a June interview.

The March bailout hammered bank creditors and depositors in an early test of what has since become the official European Union policy of “bailing-in” banks. The policy is intended to force creditors and depositors to pay for a bank’s mistakes and to spare taxpayers from picking up the entire bill.