In The News Today

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People seek frantically for peace and happiness in a thousand ways along a thousand roads. Real peace is to be got only in the depths of the spirit, in the discipline of the mind, in faith in the One base of all this seeming multiplicity. And the joy of that experience, the profound exhilaration which accompanies it cannot be communicated in words.
–SSB 07/10/59

 

Lavrov: US pressuring Russia into passing UN resolution on Syria allowing military force
Published time: September 22, 2013 09:48
Edited time: September 22, 2013 19:42

Russian Foreign Minister Sergey Lavrov. (Screenshot from Channel 1 Sunday Time programme)

The US is pushing Russia into approving a UN resolution that would allow for military intervention in Syria, in exchange for American support of Syria’s accession to OPCW, Russian Foreign Minister Sergey Lavrov has said.

“Our American partners are starting to blackmail us: ‘If Russia does not support a resolution under Chapter 7, then we will withdraw our support for Syria’s entry into the Organization for the Prohibition of Chemical Weapons (OPCW). This is a complete departure from what I agreed with Secretary of State John Kerry’,” Russian Foreign Minister Sergey Lavrov told Channel 1’s Sunday Time program.

Chapter 7 of the UN charter would allow for potential military intervention in Syria.

Western countries blinded by ‘Assad must go’ attitude

The head of Russia’s Foreign Ministry went on to say he was surprised by the West’s “negligent” approach to the conflict.

“Our partners are blinded by an ideological mission for regime change,” said Lavrov. “They cannot admit they have made another mistake.”

Slamming the West’s intervention in Libya and Iraq, the foreign minister stated that military intervention could only lead to a catastrophe in the region. Moreover, he stressed that if the West really was interested in a peaceful solution to the conflict that has raged for over two years, they would now be pushing for Syria’s entry into the OPCW in the first place, not for the ouster of President Bashar Assad.

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Jim Sinclair’s Commentary

More sovereign sleepers wake up.

Finland Latest to Join Gold Repatriation Movement
Sep 23 2013

Mine, said the paper, mine are the words that smother the stone with imagined birds, reams of them, flown from the mind of the shaper.
—from ‘Song of the Powers’ by David Mason

Finland recently became the latest nation to initiate action to pull its physical gold reserves back within its national borders. As WealthCycles has reported over the past year or so, the gold repatriation movement is steadily growing, as country after country moves to retrieve their gold. The announcement by the Finnish repatriation movement states the rationale most succinctly:

Venezuela and Germany recently have made the decision to bring their gold back home and many other countries are seeing initiatives to do the same. This tells us that governments are getting ready for a currency crisis.

Much of the world’s sovereign gold reserves have been stored for safekeeping for many years in the vaults of bullion banks and other international financial institutions, largely in London and the United States. The reasons the world has stored its gold in the bastions of Western democracy vary: in the case of Poland, as we reported last week, gold bullion reserves were spirited out of the country ahead of the invading Nazis during World War II, first to France, then to the U.S. Physical gold is a bit bulky as a medium to use for buying and selling when you’re dealing in millions, billions and trillions, so governments have been content for the most part to leave it in place and merely trade it around on paper or digital 1s and 0s. Because the largest bullion banks are headquartered in the West, and because the U.S. dollar has been the world’s currency for commerce and bank reserves, much of the world’s gold has ended up sitting in Western vaults.

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Jim Sinclair’s Commentary

Do we Taper or do we not Taper? The newest exercise is mass monetary madness.

Fed’s Dudley: Two key tests show economy too fragile to begin tapering
By Jim Puzzanghera
September 23, 2013, 8:45 a.m.

WASHINGTON — A top Federal Reservepolicymaker said Monday that the economy still wasn’t strong enough in two key areas to begin tapering the central bank’s bond-buying stimulus program, particularly with budget and debt-limit fights looming.

"In my view, the economy is slowly healing," William C. Dudley, president of the Federal Reserve Bank of New York, said in a speech at Fordham University.

"But, while significant progress has been made since the end of the recession, there remain a number of headwinds that have offset the improvement in the underlying fundamentals," he said. "In my view, the economy still needs the support of a very accommodative monetary policy."

Dudley was among the Federal Open Market Committee members who voted 9-1 last week to continue purchasing $85 billion in Treasury bond and mortgage-backed securities each month.

Given recent comments by Fed officials, many economists and investors had expected the Fed to announce a reduction in those monthly purchases.

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Jim Sinclair’s Commentary

Dollar crash now, or crash later? How long can gold be kept in the box?

Dr Paul Craig Roberts, former U.S. Assistant Treasury secretary, reckons Fed QE policy, and attempts to unwind from it, will lead to a dollar crash and ultimately an explosion in the gold price.
Author: Lawrence Williams
Posted: Monday , 23 Sep 2013

DENVER (MINEWEB) -  Commenting on the dollar, the U.S. Fed tapering agenda, the state of the U.S economy and the gold price makes it open season for economists, and would be economists with almost as many different views being expressed as there are commentators.  But, broadly, the consensus seems to fall between two camps – those, mostly on the right, who feel that the current economic situation, and the solutions being applied are just a house of cards waiting to come crashing down and, when it does, gold will explode, while those who are mostly more left-inclined will comment that current Fed policy, tapering or no, is the only way of saving the U.S. (and the world) economy and that Ben Bernanke et al have rescued us from a recession at least as deep as that of the 1930s.

To this non-economist (an engineer by background, which does at least suggest a pragmatic outlook) both sides may well have a point.  (It may also be because my star sign is Libra for which astrologists suggest that one sees both sides of any argument). However, there is little doubt that QE has been of huge benefit to some sections of the community and has, so far, been successful in warding off an economic depression.  Those predicting that hyperinflation has to follow on have been put in their place – for now – but it is the haves who have been benefitting, not the have-nots with median household incomes in the U.S. no higher than they were 25 years ago (according to a new York Times investigation published last week).  Indeed the NY Times findings indirectly suggest that things have actually got worse for the lower end of society, while the rich – and the bankers in particular – have been bucking the lower income trend.  Indeed the NY Timers commented that standards of living in the U.S.have fallen over the past quarter of a century – and this is paralleled in other G20 nations.

Now, most of the pundits commenting on the Fed’s actions and their effects on the economy are outsiders – many just trying to make a name for themselves by predicting the outcomes of these policies and when they occasionally get a significant event right they live on that for evermore, totally disregarding all the times they have called it wrong.  They are mostly trying to second-guess Fed policies and their likely effects.  One can mostly discount politicians’ views – they always have an underlying, self-serving, or at least political party-serving, agenda – but when you get a former insider commenting, it is perhaps worth sitting up and taking notice.

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Jim Sinclair’s Commentary

Taper or no Taper grabs the headlines and gold.

The Doves Hit The Tape: Dudley, Lockart Plead For More QE
Submitted by Tyler Durden on 09/23/2013 09:34 -0400

As expected, here come the first two doves "explaining" the reasons behind Bernanke’s taper surprise last week:

DUDLEY SAYS FED MUST ACT ‘FORCEFULLY’ TO PUSH AGAINST HEADWINDS

DUDLEY: MAY TAKE CONSIDERABLE TIME TO REACH 6.5% JOBLESS LEVEL

DUDLEY SAYS ECONOMY STILL NEEDS `VERY ACCOMMODATIVE’ POLICY

And Lockhart adds to the chorus:

LOCKHART SAYS FED FOCUS SHOULD BE FASTER U.S. ECONOMIC GROWTH

LOCKHART HAS BACKED FED’S ASSET PURCHASE PROGRAM

LOCKHART SEES `SOME SLOWING’ IN U.S. PAYROLL GROWTH

Translation: much more "high-quality collateral" to be extracted from the system.

Some of the highlights from the just released Dudley speech:

As we move into 2014, the fiscal headwinds should abate somewhat.  As that occurs, the improving underlying fundamentals of the economy should begin to dominate, pushing up the overall growth rate.  But this is just a forecast, it has not been realized yet.  That is one reason why I supported the FOMC’s decision last week to maintain the current pace of our Treasury and mortgage-backed security purchases.  In my view, the economy still needs the support of a very accommodative monetary policy.  Adjustments to that policy need to be anchored in an assessment of how the economy is actually performing, how financial conditions are evolving, and how this affects the longer-term outlook and the risks around it. Our decisions on how to adjust our policy tools—for example, the pace of asset purchases and forward guidance with respect to the level of short-term rates—must be rooted in the ongoing flow of information that informs our judgments about the prospects for a sustainable recovery.  Decisions on the pace of asset purchase and forward guidance must be based on what is most appropriate to achieve our dual mandate objectives of maximum sustainable employment in a context of price stability.

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Jim Sinclair’s Commentary

QE to Infinity described as the USD trading in the low.7000s on the USDX.

US PMI Misses Expectations To 3-Month Lows; Orders And Employment Tumble
Submitted by Tyler Durden on 09/23/2013 09:14 -0400

Despite exuberance at European and Chinese PMIs, the US clean shirt just skidded with a miss. Against expectatins of a high YTD 54.0 print, PMI posted 52.8 – its lowest in 3 months and falling for the second month in a row. New orders fell at the slowest pace since April (boding ill for durable goods) and the employment sub-index grew at the slowest pace in 3 months (suggesting payrolls will not hold up well). Of course, as Markit notes, bad news is good news "as far as policymakers are concerned there are some worrying signals in relation to the sector’s growth momentum, which vindicate the Fed’s decision to hold off on tapering its asset purchases."

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Jim Sinclair’s Commentary

One day Taper, the next day no Taper. Financial Taper is coming 24 hours a day. This is the new crap we have to listen to after watch gold action until it realized QE to Infinity defined at the US dollar n the low USDX .7000s is the true path of least resistance.

Fed’s Dudley says economy too weak to taper
Atlanta Fed’s Lockhart says economy may have lost ‘mojo’
By Greg Robb and William L. Watts, MarketWatch

NEW YORK (MarketWatch) — Two senior Federal Reserve officials Monday expressed disappointment with the pace of the U.S. recovery, with New York Fed President William Dudley saying the economy is too weak for the central bank to pull back its bond-buying program.

Dudley expects headwinds holding back the economy to abate in early 2014. But he noted that “this is just a forecast [and] has not been realized yet.”

While the economy is slowly healing, there has been no pickup in its “forward momentum,” he said in a speech at Fordham University.

He blamed the sluggishness, in part, on a drag from fiscal policy, in the form of the expiration of the payroll tax holiday and higher tax rates in January, along with the budget sequester. The sharp rise in market interest rates since May, when investors began looking toward a potential cutback in Fed bond buys, is also holding back the economy, he said.

“The economy still needs the support of a very accommodative monetary policy,” Dudley said.

A key ally of Fed Chairman Ben Bernanke, Dudley said he would like to see “economic news that makes me more confident that we will see continued improvement in the labor market” before he would vote to reduce the pace of the central bank’s asset-purchase program.

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