In The News Today

Posted at 12:54 PM (CST) by & filed under In The News.

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Jim Sinclair’s Commentary

The next Bretton Woods currency reset.

The Frightening Truth About China’s Control Of The US

Today acclaimed money manager Stephen Leeb told King World News “There is a tremendous amount of fear in the United States about the increasing power the Chinese are exerting in this country and the fears are well-founded as far as I’m concerned.” Leeb also discussed the frightening implications of this for the United States as well as where the US is headed from here, and also spoke about China’s accelerate accumulation of gold.

Leeb: “The euro is on a tear and it has risen quite dramatically, but one currency has done considerably better than any other during the past month and that is the Chinese yuan. The yuan is just soaring. Right now there is a massive of flow of gold from West to East, and I think the West is desperate, and want to emphasize the word ‘desperate,’ to hold down the price of gold because gold represents a massive threat to the US dollar.

“From a foreign perspective, they are holding what could become worthless pieces of paper because the dollar may collapse. So there is tremendous pressure to keep any alternative currencies out of the spotlight. This means pressure from the West to keep gold down.

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Jim Sinclair’s Commentary

Building a de-Americanized World is a process of de-dollarizing. Therefore China is slowly moving out of US Treasuries.

 

Jim Sinclair’s Commentary

Not dollar positive.

NSA monitored calls of 35 world leaders after US official handed over contacts
James Ball
theguardian.com, Thursday 24 October 2013 14.14 EDT

The National Security Agency monitored the phone conversations of 35 world leaders after being given the numbers by an official in another US government department, according to a classified document provided by whistleblower Edward Snowden.

The confidential memo reveals that the NSA encourages senior officials in its "customer" departments, such the White House, State and the Pentagon, to share their "Rolodexes" so the agency can add the phone numbers of leading foreign politicians to their surveillance systems.

The document notes that one unnamed US official handed over 200 numbers, including those of the 35 world leaders, none of whom is named. These were immediately "tasked" for monitoring by the NSA.

The revelation is set to add to mounting diplomatic tensions between the US and its allies, after the German chancellor Angela Merkel on Wednesday accused the US of tapping her mobile phone.

After Merkel’s allegations became public, White House press secretary Jay Carney issued a statement that said the US "is not monitoring and will not monitor" the German chancellor’s communications. But that failed to quell the row, as officials in Berlin quickly pointed out that the US did not deny monitoring the phone in the past.

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Jim Sinclair’s Commentary

This is the beginning of the Great Reset that will take place first in the Brics by 2016. This is not motivated by NSA spying, but that makes a great cover story for what is really coming.

A new Brics SWIFT system will be part of the great reset on or before 2016.

A consortium of telecom and undersea cable companies competing for the contracts for the proposed BRICS cable show what they think the project should look like:

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Jim Sinclair’s Commentary

Prometheus Market Insight looks for a new bull cycle.

In September 2011, our cycle analysis predicted the formation of a long-term top in the gold market. Following the development of a consolidation formation from late 2011 until early 2013, prices moved below congestion support in the 1,550 area. As expected, the breakdown was followed by a severe decline of 24 percent from April to June.

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The secular bull market that began in 2001 is still in progress and we have been monitoring market behavior for the potential formation of the latest cyclical bottom during the last five months. In September, our computer models outlined a bullish scenario that would suggest a cyclical low is forming. That bullish scenario required the formation of the latest intermediate-term cycle low (ITCL) well above the previous low in July. Last week, we identified the potential formation of the latest ITCL during the week ending October 11. Although a cycle low signal was not generated, gold has continued higher this week, further supporting the long-term bottoming scenario.

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As always, it is important to remember that a long-term bottom is a process, not an event. Cyclical lows are confirmed in stages as specific short-term and intermediate-term objectives are achieved. The formation of the latest ITCL in early October could be confirmed as soon as tomorrow, so it will be imperative to monitor gold market behavior closely for this potentially important intermediate-term signal.

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Jim Sinclair’s Commentary

QE to infinity.

Consumer Confidence in U.S. Declines to Lowest in Eight Months

Consumer confidence dropped last week to an eight-month low as Americans grew increasingly concerned the budget standoff in Washington will damage the world’s largest economy.

The Bloomberg Consumer Comfort Index declined in the period ended Oct. 20 to minus 36.1, the lowest since February, from minus 34.1. More households were pessimistic about the economy than at any time in the past year even as lawmakers approved a deal that ended the partial shutdown of federal agencies.

The compromise funds the government into early 2014, raising the prospect that the dispute over fiscal policy will continue through the holiday-shopping season. The stalemate, combined with disappointing job growth, risks depressing consumer spending, which accounts for 70 percent of the economy.

“Households are suffering from a post-shutdown hangover,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. Any rebound in confidence sparked by last week’s agreement will probably be short-lived as the damage done by the government’s closing ripples through the economy and employment, he said, which “will likely weigh heavily on overall consumer sentiment for the remainder of 2013.”

Other reports today showed more Americans than forecast applied for unemployment benefits last week and the trade deficit in August was little changed.

Jobless claims decreased by 12,000 to 350,000 in the week ended Oct. 19, the Labor Department said in Washington. The median estimate of 48 economists surveyed by Bloomberg called for 340,000 claims.

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Jim Sinclair’s Commentary

QE to infinity.

October US Manufacturing Output Tumbles To 2009 Levels
Submitted by Tyler Durden on 10/24/2013 09:21 -0400

While hardly as followed as the other two key US manufacturing indices, the Mfg ISM and the Chicago PMI, the recently introduced Markit PMI, which comes from the same firm that tracks manufacturing data across the rest of the world, shows that in addition to the sliding job picture in September (and soon October), one other aspect of the US economy that took a big hit in October was manufacturing. As Markit just reported, "the U.S. manufacturing sector grew at its weakest pace for a year in October… based on approximately 85% of usual monthly survey replies. The flash PMI index registered 51.1, down from 52.8 in September, and was consistent with only a modest rate of expansion." Not only was this the lowest headline print in one year, and should the drop continue it would be the worst print since 2009, not only was the New Order index had its weakest number in 6 months, but worst of all, the Output index, plunging from 55.3 to 49.5, had its first contrationary print since 2009!

Headline Mfg PMI:

And the suddenly plunging Output index:

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The full data table:

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Jim Sinclair’s Commentary

The proposed but unannounced agenda is to "bail-in" from these tests. That means to start "Bail-in" without a crisis event.

‘Over-Banked’: ECB Tests Set to Reveal German System Flaws
By Christopher Alessi

The European Central Bank’s upcoming review of the euro zone’s largest banks could expose weaknesses in the German banking sector. It may also reveal Germany’s political role in limiting the scope and efficacy of the Continent’s nascent banking union.

The European Central Bank is preparing to conduct a "comprehensive assessment" of the euro zone’s biggest banks ahead of taking on the role of banking supervisor for the region late next year. German banks, considered some of the strongest in the fragile euro area, are expected to fare relatively well. However, a thorough — and apolitical — review could reveal cracks in the German financial system, while underscoring Germany’s fundamental resistance to a full-fledged banking union.

Earlier this month, European Union finance ministers officially signed off on plans to create a Single Supervisory Mechanism within the ECB, which will monitor around 130 of the euro zone’s largest banks. The step is the first in a larger EU plan to shift financial regulatory authority from national governments to the European level by developing a so-called banking union.

However, the ECB, starting in November, will first assess the health and stability of the big banks through an evaluation that includes a risk assessment, an asset quality review, and a stress test targeting bank balance sheets. The review, which will be based on a capital benchmark of 8 percent, should "strengthen private sector confidence in the soundness of euro area banks and in the quality of their balance sheets," ECB President Mario Draghi said when the bank outlined its assessment criteria on Oct. 23.

Bank analysts and economists expect some banks in Italy, France, and Spain to require additional capital following the evaluation, in large part due to non-performing loans. But what about German banks?

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Jim Sinclair’s Commentary

Not dollar positive.

EU parliament votes to suspend US from financial databank to avoid spying
Published time: October 23, 2013 20:59

The European Parliament voted Wednesday for US access to the global financial database held by a Belgian company to be suspended because of concerns that the US is snooping on the database for financial gain rather than just to combat terrorism.

The Strasbourg based parliament voted 280 in favor, with 254 against, with 30 abstentions, and called for a suspension of US access until a full enquiry clarifies the situation.

“We need full transparency, especially with all the NSA revelations. Europe cannot accept that the data of private citizens is being accessed without anyone knowing about it", Guy Verhofstadt, the leader of the Liberals in the European Parliament, told Reuters.

EU lawmakers are concerned that the US is covertly using information from the SWIFT database following leaked US documents aired by Brazil’s biggest television network Globo, which indicated that the US has secretly tapped into SWIFT.

Under current agreements the US has limited access to the SWIFT database. The deal is part of transatlantic cooperation following the September 2001 attacks, and allows certain data from SWIFT to be shared with the US treasury.

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