In The News Today

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Jim Sinclair’s Commentary

It froze over!

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The US Dollar is the biggest key to possible monetary system change

We are watching many stories here in our effort to keep an eye out for things that could lead to major monetary system changes. Nothing is more important than the status of the US dollar. A major decline in the US dollar could be part of a global currency reset. It could be the result of a steady continued policy of the US FED to actually generate inflation. In a worst case scenario it could happen suddenly as part of another financial crisis. For all these reasons, watching the US dollar is our most important task here.

With that in mind, tonight we link to a chart on Jim Sinclair’s blog site showing the US dollar. Jim is one of the most respected precious metals analysts on earth. His background has earned him the title of "Mr. Gold". Here is the link to his bio on his blog site. He is also famous for being asked by FED Chairman Paul Volcker to help return stability to the silver markets in the 1980’s after the Hunt Brothers were forced to liquidate large silver holdings.

This chart will allow us to track the predictions it makes that the US dollar is about to see a sharp drop this year. As the chart shows, last week the dollar fell through a very important support level (80 on the US dollar index). It now forecasts a fall all the way to 70 during 2014.

If this forecast turns out to be correct, it will have a huge impact on what we are watching here on this blog. A dollar drop of that magnitude that quickly would lead to markets thinking FED monetary policy is failing. It would concern holders of US bonds who would see their holdings being sharply devalued. Gold would probably move sharply higher as well which would also spook the markets. All holdings in US dollars would be hurt.

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Jim Sinclair’s Commentary

Can you imagine this?

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Bail in Replacing Bail Out
Posted: 03/03/2014 12:36
Paulo Casaca

In a press release dated February the 19th addressing the so-called "single resolution mechanism" to be decided by the European institutions, the Council of the European Union stated, in what is perceived as a negotiation declaration towards the European Parliament, there was agreement between the partners that: "bail-in and not bail-out is the main guiding principle for bank resolution."

The international press refers to this guiding principle as a simple and fair way of dealing with future financial crises. As we seek to show in the following lines, this is clearly not the case.

The legal text of the directive on recovery and resolution agreed by the Council on the 18th December 2013 has received little attention whereas a parallel regulation on the same issue announced with big fanfare as heralding a new era of financial responsibility is still under discussion.

Both the European Central Bank (ECB) and the European Parliament have been repeatedly quoted expressing their misgivings on several aspects of this second bill as approved by the Council, but so-far no declaration questioned the "bail-ins" as main guiding principle, so we can safely assume the Council claim is correct.

The first erroneous assumption on this bail-in issue is that it is the only alternative to bail-out.

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Jim Sinclair’s Commentary

You see this continually, but you do nothing about it. Why?

Do not rely on "It cannot happen in America."

Bail in Replacing Bail Out
Posted: 03/03/2014 12:36
Paulo Casaca

In a press release dated February the 19th addressing the so-called "single resolution mechanism" to be decided by the European institutions, the Council of the European Union stated, in what is perceived as a negotiation declaration towards the European Parliament, there was agreement between the partners that: "bail-in and not bail-out is the main guiding principle for bank resolution."

The international press refers to this guiding principle as a simple and fair way of dealing with future financial crises. As we seek to show in the following lines, this is clearly not the case.

The legal text of the directive on recovery and resolution agreed by the Council on the 18th December 2013 has received little attention whereas a parallel regulation on the same issue announced with big fanfare as heralding a new era of financial responsibility is still under discussion.

Both the European Central Bank (ECB) and the European Parliament have been repeatedly quoted expressing their misgivings on several aspects of this second bill as approved by the Council, but so-far no declaration questioned the "bail-ins" as main guiding principle, so we can safely assume the Council claim is correct.

The first erroneous assumption on this bail-in issue is that it is the only alternative to bail-out.

The obvious alternative is to distinguish the financial institutions that should be bailed out or bailed in from those who should be taken care of at best as any other business.

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Jim Sinclair’s Commentary

The Financial Post posts a Barrons article. It is in our corner to see this article get around.

The FT ran a similar article and on day 2 pulled it down.

London Gold Fix study suggests decade of bank manipulation
Liam Vaughan, Bloomberg News
Friday, Feb. 28, 2014

The London gold fix, the benchmark used by miners, jewellers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say.

Unusual trading patterns around 3 p.m. in London, when the so-called afternoon fix is set on a private conference call between five of the biggest gold dealers, are a sign of collusive behavior and should be investigated, New York University’s Stern School of Business Professor Rosa Abrantes-Metz and Albert Metz, a managing director at Moody’s Investors Service, wrote in a draft research paper.

“The structure of the benchmark is certainly conducive to collusion and manipulation, and the empirical data are consistent with price artificiality,” they say in the report, which hasn’t yet been submitted for publication. “It is likely that co-operation between participants may be occurring.”

The paper is the first to raise the possibility that the five banks overseeing the century-old rate —Barclays Plc, Deutsche Bank AG, Bank of Nova Scotia, HSBC Holdings Plc and Societe Generale SA — may have been actively working together to manipulate the benchmark. It also adds to pressure on the firms to overhaul the way the rate is calculated. Authorities around the world, already investigating the manipulation of benchmarks from interest rates to foreign exchange, are examining the $20 trillion gold market for signs of wrongdoing.

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Jim Sinclair’s Commentary

NATO and the USA will be jumping up and down, but that is it. Sanctions are more lethal in Russia’s hands as Euroland depends on Russia for its gas supplies and Euroland is against fracking as a process for energy based on a sound ecological basis.

Nato warns that Russia is risking Europe’s peace and security
Tensions rise as Vladimir Putin mobilises all reservists and US Secretary of State John Kerry flies into Kiev
By Damien McElroy, in Kiev, Roland Oliphant in Simferopol and Peter Foster in Washington
8:20PM GMT 02 Mar 2014

Ukraine has mobilised for war amid warnings from Nato that Russia’s annexation of Crimea "threatens peace and security in Europe".

With tension nearing boiling point, Anders Fogh Rasmussen, the Nato Secretary General, vowed the organisation would stand by Ukraine, a nation of 46 million which occupies a vital strategic position between Europe and Russia.

Speaking before he chaired an emergency meeting of ambassadors from the 28 Nato member states, he said: "Russia must stop its military activities and its threats."

The United States dramatically instensifed pressure on Moscow, threatening to remove Russia from the G8 club of developed economies.

John Kerry, the US Secretary of State, condemned Russia for what he called an "incredible act of aggression" and threatened "very serious repercussions", including Russia’s possible expulsion from the G8.

"You don’t just, in the 21st century, behave in 19th century fashion by invading another country on a completely trumped-up pretext," he said.

Mr Kerry announced a surprise trip to Kiev this week in a show of support for the embattled leadership, as Washington and its allies strongly criticised Moscow for violating Ukraine’s sovereignty.

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Jim Sinclair’s Commentary

The vanishing FT gold manipulation article
You’ve Been Warned
by Bill Holter for Miles Franklyn

Over just the last couple of weeks we have seen several mainstream media headlines about "gold manipulation".  The Financial Times as you know did an article that was promptly "pulled" as it was called a "mistake".  All that is left of this one is:

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  Then 2 or 3 days later, Bloomberg put out an articlehttp://www.bloomberg.com/news/2014-02-28/gold-fix-study-shows-signs-of-decade-of-bank-manipulation.html on the same subject, asking if the London gold fix is "fixed".  The German publication Handesblatt and the London Evening Standard also reprinted the manipulation story here  http://gata.org/node/13706   These articles have all come out after the shock and awe of Elke Koenig’s (Bafin) statement of early January, Bloomberg reported it http://www.bloomberg.com/news/2014-01-16/metals-currency-rigging-worse-than-libor-bafin-s-koenig-says.html with the headline "Metals, currency rigging is worse than LIBOR".  The headline was a bit misleading though as Ms. Koenig prefaced those words with "possible" which means "if".  Please also recall that Deutschebank withdrew from the London gold fix at approximately the same time.

  OK, so let’s do a little math here, 5 articles from 4 different and VERY "main" stream media sources (from 3 different countries) with the addition of a global banking behemoth’s withdrawal from the gold "fix" …topped off by a top financial regulator using the words "gold" and "manipulation" in the same sentence.  What do we have?  "Nothing to see here, please move along" or "we told you so and we did report on it"?  Why, after all these years where multiple "whackos" (such as myself) have screamed "manipulation" does the mainstream media all of a sudden give us ANY credibility whatsoever?

  Please understand that writing this piece is a little "self serving".  Maybe "self serving" is too strong a phrase, maybe "self satisfying" is better.  Going back to 1997 I believed that there was something very very wrong in the gold market.  I can still remember speaking with the late Harry Bingham of Van Eck about this topic sometime in ’97, he said "something is very wrong yet no one will believe it, you can’t say anything publicly because they’ll brand you a conspiracy nut".  I only wish he could have lived to see how far we have now come.

  The "other side", those who look at what is obvious to me (probably you too) and disagree, they claim that "free markets" describe gold and silver.  It doesn’t matter if we know for a fact that currencies, interest rates, stocks and bonds are all "manipulated"…gold and silver "would never, COULD never" be manipulated…oh the sacrilege!  In fact, Ross Norman of Sharps-Pixley chimed in on Friday with an article that denied any "fixing" of the fix http://news.sharpspixley.com/article/ross-norman-is-the-london-fix-fixed-/168639/ .  In this short piece, Norman reprimands the Bloomberg author for his "motivation" in writing about manipulation and suggests that he might be talking his own book.  I don’t know for a fact but I believe that I know where his "answers" came from.  I believe they came from a former trader (who is very bullish gold by the way) who says "I was a trader at several big bullion banks and I never saw any signs of collusion or manipulation so there couldn’t have been any".  I would simply ask him if the right hand, left hand or nearly any hand "knew of the big picture" like with the Manhattan project.  It is estimated that with the "Manhattan project" only a very small handful of people (2 or 3 dozen) had knowledge of the big picture even though well more than 100,000 people worked on this project…in more than a dozen U.S. states, in Canada and in a collaboration with Britain.  If a project as "physical" as the Manhattan project could be kept a secret then why couldn’t something as esoteric as selling unbacked gold futures contracts be kept a secret?  Does this former trader really believe he had enough "stroke" that he would have been allowed to see the machinations of the big picture?  I believe that the manipulation gears have changed, it has become so brazen that you don’t even have to be "my cousin Vinny" to now see it.  Yet, we still hear that "manipulation is impossible, I would have known and someone surely would have already spilled the beans".  My opinion is that it’s obvious to anyone willing to look with an open mind and a 3rd grade education!

  Norman also denies that any trading desks could have survived being short gold during the 6 fold price rise.  Really?  Why not?  Because they would have lost too much money and gone bust?  I will admit that he "would be correct" in a free and honest world…but this is not the world that we currently live in.  I would simply ask him a few questions such as 1. have you ever heard of the wonderful Patriot act?  2. did you know that within this act, U.S. financial institutions need not disclose anything that might harm our national security…not even huge losses depending on where they came from?  3. were you aware that the Federal Reserve "lent" out $17 trillion all over the world in late 2008…that "we" peons weren’t made aware of until a couple of years later and the discovery was "found" rather than "reported" to us?  4. did it ever occur to you that if a "desk" were to get into trouble, maybe, just maybe they could get a "little help" from the Fed on the QT…because it could be viewed as "necessary"?  Is this impossible?  Or would it maybe fall under the scope of "in the national interest" section?  Do you really believe that "they" would tell us???

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Jim Sinclair’s Commentary

Seems like a deal for Russia to support Chinese interests on the islands claimed by Japan.

Russia And China ‘In Agreement’ Over Ukraine

Russia is in "operational control" of Crimea as soldiers surround Ukrainian troops and seize a ferry port.

Russia has said China is largely "in agreement" over Ukraine, after other world powers condemned Moscow for sending troops into the country.

Hundreds of Russian soldiers have surrounded a military base in Crimea, preventing Ukrainian soldiers from going in or out.

The convoy blockading the site, near the Crimean capital Simferopol, includes at least 17 military vehicles.

Russian troops are also reported to have taken control of a ferry terminal in the city of Kerch on the eastern tip of Crimea, which has a majority Russian-speaking population.

Ukraine’s defence ministry said two Russian fighter jets violated the country’s air space in the Black Sea on Sunday night and that it had scrambled an interceptor aircraft to prevent the "provocative actions".

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Jim Sinclair’s Commentary

Where is freedom of speech and assembly?

Hundreds of Keystone protesters arrested at White House
March 02, 2014|Emily Stephenson | Reuters

WASHINGTON (Reuters) – Police arrested hundreds of young people protesting the Keystone XL project on Sunday, as demonstrators fastened themselves with plastic ties to the White House fences and called for U.S. President Barack Obama to reject the controversial oil pipeline.

Participants, who mostly appeared to be college-aged, held signs reading: "There is no planet B" and "Columbia says no to fossil fuels," referring to the university in New York City.

Another group, several of whom were clad in white jumpsuits splattered with black ink that was meant to represent oil, lay down on a black tarp spread out on Pennsylvania Avenue to stage a mock spill.

Organizers estimated 1,000 people protested and said several hundred agreed to risk arrest by refusing to leave the sidewalk in front of the White House. Citing U.S. Park Police figures, the organizers said later that almost 400 people were arrested.

"If the Democratic Party wants to keep our vote, they better make sure President Obama rejects that pipeline," said Nick Stracco, a 23-year-old student at Tulane University in New Orleans.

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Jim Sinclair’s Commentary

Even presenting themselves as the most conservative, no one seems able to avoid derivatives.

Did Derivatives Cause PIMCO’s $2 Trillion Divorce?
By Chriss Street
February 28, 2014

The Wall Street Journal on February 25th published a story about December’s messy corporate divorce between Bill Gross and Mohamed El-Erianas, co-Chief Investment Officers at Pacific Investment Management Company (PIMCO), the world’s largest bond fund with almost $2 trillion in assets.  The article focused on the prickly personality of Gross and foul language complaints by El-Erian during a period of stress last summer when the firm was suffering market losses and clients were withdrawing billions.  But despite a carefully crafted image of a traditional conservative bondmanager for “serious” money, PIMCO has magnified returns by making trillions of dollars in high-risk derivatives bets.  From personal experience and the firm’s latest financial filings, PIMCO’s leveraged derivatives empire could eventually crash and cause massive pain.

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Jim Sinclair’s Commetnary

The talks are health issues. Seems a rather pedestrian reaction to the present crisis wherein negotiation is a prime tool.

US Bars Russian Delegation From Washington Talks

MOSCOW, March 3 (RIA Novosti) – The United States has barred a delegation of Russian health officials from influential talks in Washington this week as the US simmers over the deployment of Russian troops in crisis-stricken Ukraine.

The US Embassy notified the delegation’s head that its invitation was being rescinded less than a day before the group’s planned departure to the US to discuss Kazakhstan’s potential accession to the World Trade Organization, Russian officials said Monday.

The snub was seen as the United States’ latest response to the reported deployment of Russian troops in Ukraine’s Crimean peninsula, which has a majority ethnic Russian population and hosts a major Russian naval base.

Russia’s veterinary and agricultural watchdog, Rosselkhoznadzor, which was sending the delegation, denounced the measure as “sabotage,” according to a statement posted on the agency’s website.

Troops widely believed to be Russian but lacking official insignia have deployed across Crimea since Thursday, isolating Ukrainian military installations and urging soldiers stationed inside to lay down their arms.

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EuroMaidanPR: Russian military movements spotted within 10 kilometers of Ukraine’s northern border

March 3, 8:37 p.m. — According to EuroMaidanPR, the official information service of the revolution that toppled Viktor Yanukovych as Ukraine’s president on Feb. 22, Russian troops movements have been spotted about 10 kilometers from Ukraine’s northern border in Chernihiv Oblast. Officials said tanks were seen. The sightings came a day after interim Ukrainian President Oleksandr Turchynov later informed that a no-fly zone over the country had been initiated for military aircraft.

On March 3, the State Border Service of Ukraine announced that Russian forces were accumulating forces, including artillery and armored carriers, along the country’s eastern borders along the Donbas regions of Luhansk, Donetsk and Kharkiv. Russian border services have also closed the border for Russian citizens traveling into Donetsk, while the governor of neighboring Rostov-on-Don ordered the set up of the refugee camps, according to the EuroMaidanPR’s Facebook page.

In response, Ukrainian Prime Minister Arseniy Yatseniuk has said that Russian troops will not be allowed into the eastern regions of Ukraine. “I am convinced that no Russian military contingents will be allowed into (Ukraine’s) eastern regions,” he said. See this link:http://ukrainianpolicy.com/russian-invasion-of-ukraine#mainland — Brian Bonner

Ukrainian Defense Ministry says that Russians have issued ultimatum

March 3, 7:07 p.m. — Russian Black Sea Fleet Commander Aleksandr Vitko has delivered an ultimatum to the Ukrainian military in Crimea, Interfax-Ukraine reported, citing Ukraine’s Defense Ministry. "If by 0500 tomorrow (March 4) they do not surrender, a real assault on the units and detachments of the armed forces of Ukraine will start across Crimea," the ministry said. Russian soldiers are are conveying this warning of the Russian Black Sea Fleet commander to Ukrainian soldiers in Crimea, the news agency reported. — Anastasia Forina
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Jim Sinclair’s Commentary

Buffet just figured this out?

Buffett Says Pension Tapeworm Means Decade of Bad News
By Noah Buhayar and Zachary Tracer Mar 3, 2014 12:01 AM ET

Public pension plans threaten the financial health of U.S. cities and states more than taxpayers realize, billionaire investor Warren Buffett said.

“Citizens and public officials typically under-appreciated the gigantic financial tapeworm that was born when promises were made,” Buffett wrote in his annual report to shareholders of Berkshire Hathaway Inc. (A:US) released on March 1. “During the next decade, you will read a lot of news –- bad news -– about public pension plans.”

Obligations to retirees have weighed on governments from Puerto Rico to the bankrupt city of Detroit. Illinois lawmakers passed a bill last year to bolster the worst-funded U.S. state pension system. New Jersey Governor Chris Christie said last week that Detroit shows what could happen if his state doesn’t limit obligations to workers.

“Local and state financial problems are accelerating, in large part because public entities promised pensions they couldn’t afford,” Buffett said. “Unfortunately, pension mathematics today remain a mystery to most Americans.”

The municipal bond market has defied prior warnings of disaster. Meredith Whitney, a former Wall Street bank analyst, in 2010 incorrectly predicted defaults totaling hundreds of billions of dollars. Buffett said that year that cities and states battered by the recession faced a “terrible problem” and might require a federal rescue.

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Jim Sinclair’s Commentary

The headline says it all!

Seriously, what?! Kerry tells Russia ‘you don’t invade a country on completely phony pretexts’
Published time: March 03, 2014 11:10
Edited time: March 03, 2014 07:10

The US Secretary of State spoke today of the unacceptability of invading a sovereign country on phony pretexts in order to assert one’s own interests in the 21st century. But no, he was not speaking about the United States, as one might have thought.

“You just don’t invade another country on phony pretext in order to assert your interests,” John Kerry said during an interview with NBC’s Meet the Press. “This is an act of aggression that is completely trumped up in terms of its pretext. It’s really 19th century behaviour in the 21st century.”

Kerry has also threatened to isolate Russia economically and politically and warned of potential asset freezes and visa bans, adding to media and political hype that followed Russia authorization of sending a stabilization force in Crimea on official request from the authorities.

“There could be certainly disruption of any of the normal trade routine, there could be business drawback on investment in the country,” he said. “There could even be ultimately asset freezes, visa bans.”

Although Kerry was never challenged by the interviewer to comment in terms of that statement on Washington’s own constant threats to use force and military invasions in Iraq and Afghanistan, those who watched the interview immediately smelled the hypocrisy.

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