Posts Categorized: General Editorial

Posted by & filed under General Editorial.

My Dear Extended Family,

Today may set the record for emails sent to you on key subjects.

I am writing to you from Africa and it is quite late here.

In the now 50 years of my career, I have never seen so many subjects in one day demanding immediate clarification.

It is my joy to serve you.

Respectfully yours,

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Posted by & filed under General Editorial, Trader Dan Norcini.

Dear CIGAs,

In relation to the story Jim brought to your attention earlier about the Fed monetizing US agency debt…

The reason they are being forced into buying the debt is because no one else wants it. We have been charting this for some time here at the site by monitoring the Custodial data from the US Federal Reserve system.

I am attaching the chart for you all to review so you can all once again see how foreign Central Banks are dumping Fannie and Freddie debt in large amounts onto the market. Without the Fed monetizing that debt, there would be a significant drop off in the amount of funds for mortgages. I expect this week’s data to show no change in the liquidation of this agency debt which has now reached a total of $167 billion and is rising.

The Fed is going to need every bit of that $500 billion they are going to create out of thin air to acquire what the foreign Central Banks are unloading.

Best wishes from your pal,
Trader Dan

Click chart to enlarge today’s Agency Debt chart in PDF format with commentary from Trader Dan Norcini

AGency debt chart - Custodials.jpg

Posted by & filed under General Editorial.

Dear CIGAs,

Here is the other "WHY" gold was sold down today.

The truth will set you free of the manipulators.

$25,000,000,000 of index commodity funds follow the index readjustments made herein.

Gold is REDUCED from 10.8 to 7.9 percent of the index which therein causes related selling by INDEX FUNDS.

Buying or selling by index funds is a yearly, onetime event. These adjustments are needless artificial buying and/or selling of specific commodities that skew market prices and produce opportunities both to buy and sell short.

You think reweighting is a product of a hands off process in today’s rotten to the core world? You probably also believe in Santa Clause.

Beware, commodity index rebalancing ahead
Posted by Izabella Kaminska on Jan 05 15:34.

The major commodity indices rebalance their respective asset weightings once a year (or occasionally more) — and with that comes a mass dose of buying and selling. The 2009 rebalancing is expected to start sometime this week.

Luckily, JP Morgan has produced its best guess of how the 2009 reweightings of the DJ AIGCI and the S&P GSCI indices will impact the market.

The weightings for both indices are released ahead of time, but begin to kick in the first few working days of the new year. In the case of the DJ-AIGCI — which JP Morgan estimates has $25bn in funds tracking it — the new weightings come into force during the roll period that begins January 9th. The S&P GSCI index weightings kick-in after its January roll which commences January 8th. JP Morgan estimates about $50 bn of investment into that index.

As the DJ weighting multipliers account for changes in US dollar-denominated values there is generally more potential for large changes there than in the GSCI, whose weightings are set in terms of ounces/tonnes (on the basis of liquidity and are weighted by their respective world production quantities).

Accordingly, JP Morgan see the most significant change coming in the DJ-AIGCI rebalance. Here the market weight of crude oil is expected to increase from 9.6 per cent to 13.8 per cent, gold from 10.8 per cent to 7.9 per cent, copper (COMEX) from 4.5 per cent to 7.3 per cent, live cattle from 6.4 per cent to 4.3 per cent and sugar from 4.7 per cent to 3.0 per cent. Meanwhile, S&P GSCI crude oil weight will go from 32 per cent to 33.8 per cent. Their analysis:

In financial terms, we expect the rebalancing to have the greatest impact in gold, COMEX copper, crude oil, gold, and live cattle. We estimate that the rebalancing of the two indices is expected to result in $877 million of selling in gold, $699 million of buying in COMEX copper, $528 million of selling in live cattle, and $523 million of buying in crude oil.


Posted by & filed under General Editorial.

Dear CIGAs,

More tax cuts and more voodoo economics, a replay of the Mugabe/Zimbabwe approach to manufacturing paper and the dropping of tax revenue produce at best a double dip depression and more fiscal spending. It is simply more of the same. Doing the same produces the same, nothing else. Any other opinion is madness while grabbing at political solutions to real problems.

The fix was engineered by the Comex guys as they handed you your daily screwing yet again today at 7:02am in the NYC morning. Apparently the Comex guys got up a tad late today – perhaps still suffering from weekend hangovers.

Minus $23 in gold and a three cent change in the euro are simply more signs of the madness that is virulent in the mind of markets. As the fat shark eats the fat shark we end up with very few fat hedge fund sharks running markets. Nobody can do business when major trading currencies change 2.7% in five minutes. No major business on earth is smart enough to be able to maintain profit margins as the payment currencies change with such levels of violence.

Ignore the madness. Ignore the manipulators. Focus on the real. More of the same by a different personality will not produce different results. The dollar is dead. That is reality.

Let the paper tigers of the Comex pound the paper while you take delivery out of the warehouse and the big physical buyers just keep cleaning up and weak hand selling. I went to the Krugerrand and RSA gold factory between Johannesburg and Pretoria. All I heard was this great sucking noise as demand across the globe continued to take whatever the mints were able or willing to produce.

It is a total joke to assume that printing more paper money and spending what you do not have will strengthen that currency and set all that is askew right.

It simply will not, cannot, never has done and never will do anything but deepen the problem.

Let the nit-wits play in their in their boxes made on sand foundations. Let the media howl as they add only to their Tower of Babble.

Join me in this grand battle to end white collar crime and the white collar criminals. Take delivery of Comex gold, move it out of the Comex warehouse, sell it in the open market with a profit or even break even and do it all again and again and again. 1000 of us doing that by buying breaks like today will slice the Comex warehouse inventory in half in six months, maybe a lot sooner. War requires warriors.

Please join myself, Harry, Bill M , Jim P, Semper Fi # 321 and all the good guys, regardless of disagreements that come from time to time, in this great battle to protect our people.

Stop the rape! Stop the manipulations. Stop the takers, the users and the destroyers in gold. Stop paper money by getting the paper guys off gold. Stop those who believe they have dominion over you. I have had it, haven’t you? Where is your rage? You can borrow some of mine as I have plenty to spare. Let today be the day they screwed with the wrong people.

Your weapon is simple: 100 ounces out of the Comex warehouse bought when the paper guys beat it all to crap. Hold it and sell into the next rally in the cash market away from the Comex. Do it over and over again.

Take a stand please. It can get lonely out here from time to time.

The following is total nonsense and insanity according to Einstein’s description. The absolute best it can deliver is the bear market rally after the 1929 break, leading to the double dip depression and then on to the secondary (and more serious) market and phycological break of the awful 32 bottom.

All this strategy will do is spark the greatest inflation in the dollar’s history. Right now in reality, it is not worth a Continental.

You either fix the entire system, or there is no fix at all. This is why Obama’s team will never call me.

This is what a Canadian, Dr. Reuven Brenner, could do for them.

Dollar Rises Against Euro, Yen on Obama Plan for U.S. Stimulus
By Anchalee Worrachate and Stanley White

Jan. 5 (Bloomberg) — The dollar rose against the euro and the yen on speculation President-elect Barack Obama’s fiscal stimulus will help the U.S. economy recover from the recession.

The dollar climbed to the highest level in almost three weeks against the European currency and gained against 15 out of the 16 most actively traded counterparts monitored by Bloomberg. Obama crafted a package of infrastructure spending and tax cuts to create three million jobs. The euro fell after European Central Bank Vice President Lucas Papademos said further interest-rate cuts may be needed should inflation keep slowing.

“Obama’s stimulus package came in at a higher end of expectations, and is skewed more towards tax cuts than has been expected,” said Adam Cole, London-based head of global currency strategy at Royal Bank of Canada Ltd., the nation’s largest lender. “That’s positive for dollar sentiment. Moves might be exaggerated a bit because trading volumes in the market are still quite thin.”

The dollar strengthened to $1.3644 per euro at 7:02 a.m. in New York, from $1.3921 on Jan. 2. One dollar bought 93.32 yen, from 91.83 yen. The U.S. currency will strengthen to 98 yen by the end of June, according to Cole. It traded at $1.4515 to the British pound, from $1.4548.


Obama Said to Push for Tax Cuts in Stimulus Plan (Update1)
By Brian Faler and Ryan J. Donmoyer

Jan. 5 (Bloomberg) — President-elect Barack Obama’s economic stimulus package will include hundreds of billions of dollars worth of tax breaks for individuals and businesses, according to a transition official and Democratic aides.

Obama is asking that tax cuts make up 40 percent of a stimulus package, the people say. The measure may be worth as much as $775 billion, a Democratic aide says, meaning tax cuts may constitute more than $300 billion of the legislation.

The dollar today rose to the highest level in almost three weeks against the euro and also surged against the yen on speculation that the Obama plan would help the U.S. economy recover from recession.

Making tax cuts such a large part of the stimulus may help win support from congressional Republicans. Senate Minority Leader Mitch McConnell, a Kentucky Republican, said his party would support an immediate middle-class tax cut as part of any stimulus package.

“Republicans, by and large, think tax relief is a great way to get money to people immediately,” McConnell said yesterday on ABC’s “This Week.”


Click here to read about Dr. Brenner…

Posted by & filed under General Editorial.

Dear CIGAs,

Ok, I am not shy. Mugabe move over, here comes the US Federal Reserve.

Zimbabwe will happen in the US. The dollar is going to tank like never before!!!

Consequences, consequences, consequences. They are unavoidable.

The US dollar is not worth a Continental. This is just how Zimbabwe today started!

Fed has abandoned monetary policy, critic says
Sat Jan 3, 2009 9:58pm EST

SAN FRANCISCO (Reuters) – The Federal Reserve has embarked on a campaign of unsupervised industrial policy to end the country’s financial crisis, a move that could undermine its independence, a former top U.S. official said on Saturday.

John Taylor, who was under secretary of treasury for international affairs from 2001 to 2005, said the explosive growth of the Fed’s balance sheet since September was "unbelievable."

"This doesn’t really seem like quantitative easing in the sense of finding a growth rate in the money supply," he told a panel discussion during the annual meeting of the American Economics Association.

"What you are looking at now is really being determined by other considerations. How much should we buy of mortgage-backed securities? How much should we loan to foreign central banks? This is really more like an industrial policy," he said.

The Fed’s balance sheet has more than doubled in size to over $1.2 trillion in recent months as it has tried to shield the U.S. economy from the worst financial crisis since the Great Depression by supporting key credit markets.

This has included direct purchases of mortgage-backed bonds by the Fed and support for top-rated non-financial borrowers in the crucial commercial paper market, as well as hundreds of billions of dollars lent to banks on the basis of collateral.

"If you have a situation where the Fed is borrowing to invest in all these sectors it seems to me you have a huge governance issue…that demands a lot of thought," Taylor said.

Taylor said the U.S. Congress has a legitimate right to demand a say in who the Fed lends money to. The outcome would be "radical reform" that would risk monetary policy independence, he said.

This concern was echoed somewhat by the president of the St Louis Federal Reserve Bank, James Bullard, who also took part in the panel discussion. He said the close collaboration between the Fed and U.S. Treasury in fighting the crisis could have unintended consequences.

"We are blurring the institutional arrangements a little," Bullard said. "I am concerned about independence. Fed independence is very important," he told reporters.

(Reporting by Alister Bull, editing by Leslie Adler)

Link to article…

Posted by & filed under General Editorial, Jim's Mailbox.

Dear Jim,

What? There is a bottomless pit of money? Unbelievable!

Green Hornet

(Click images to enlarge)

zimbabwe-2008-01-18 Zimbabwe1

U.S. governors seek $1 trillion federal assistance
Fri Jan 2, 2009 5:48pm EST
By Jon Hurdle

PHILADELPHIA (Reuters) – Governors of five U.S. states urged the federal government to provide $1 trillion in aid to the country’s 50 states to help pay for education, welfare and infrastructure as states struggle with steep budget deficits amid a deepening recession.

The governors of New York, New Jersey, Massachusetts, Ohio and Wisconsin — all Democrats — said the initiative for the two-year aid package was backed by other governors and follows a meeting in December where governors called on President-elect Barack Obama to help them maintain services in the face of slumping revenues.


Dear Green Hornet,

No, there is no bottomless pit of money!

There is a bottomless pit of worthless PAPER. This is the thesis of Mugabe/Zimbabwe economics, and will have the same results as applied by Mugabee/Zimbabwe.

The reality is that yes, the Zimbabwe paper pit is quite possible in the US dollar scenario. It is not only possible but getting closer to probable with each event as discussed below. Wake Up!

Break the "illusion" and see the "real" situation. It is just that SIMPLE.

People believe the Illusion to be real and the real to be an illusion until they WAKE UP!

I have only one agenda here.



Posted by & filed under General Editorial.

image001 - 20081231_100810

Jim Sinclair’s Commentary

A hint for the market "Wise Guys."

We are so very close to the geopolitical event that will not be faded into the marketplace.

Definition: To "Fade" is to trade counter-trend.

1. Israel makes a miscalculation.
2. Pakistan goes nuclear.
3. Both of the above are 5th column operations, not in control of those in control.


Jim Sinclair’s Commentary

In a generic sense, and under no circumstances referring to the company below:

Is it paper gold, OTC derivatives written on gold by Lehman, Bear, UBS, or Gold as in the stuff that is heavy, shiny and .9995 pure or better?

Have you read the prospectus? If not, please do.

Only the Shadow knows!

Biggest Gold ETF Holds Its Weight
‘Positive Sign That Demand Is Firm’

Holdings in the world’s largest gold exchange-traded fund are at a record level as 2008 winds down, providing some healthy optimism for the market in coming months.

Metal held by SPDR Gold Shares (trading symbol GLD) climbed to 705.90 metric tons on July 11, before backing down to 614.35 in mid-September amid a liquidation selloff throughout the commodities complex. Since then, holdings are on the rise again.

The SPDR Web site shows the holdings at a record 775.33 metric tons each business day since Dec. 17. This represents an increase of 23.5% from 627.88 metric tons at the end of 2007.

Holdings in the world’s main silver ETF, iShares Silver Trust (SLV), are near their all-time high. They stand at 6,792.99 metric tons, not far below the peak of 6,901.41 in late September.

Rising ETF holdings are generally described as supportive for a commodity such as gold or silver, because it generates actual physical demand, analysts say.



Jim Sinclair’s Commentary

Hamas is a side show compared to Pakistan. A fresh offensive against the militants? Who are you kidding?

India to Pakistan: Shut down terror camps
Tue, 30 Dec 2008 18:41:17 GMT

India calls on Pakistan to dismantle terror infrastructures on its soil and take an immediate action against those behind the Mumbai siege.

Foreign Minister Pranab Mukherjee on Tuesday demanded Pakistan to dismantle about 30 terrorist camps situated on the Line of Control in divided Kashmir.

Mukherjee also rejected Islamabad’s claim that New Delhi had mobilized its army and air force in the aftermath of November’s attacks, saying Indian forces had only conducted a routine annual winter exercise.

The minister also emphasized that India and Pakistan will exchange information and take confidence-building measures over the two neighbors’ nuclear capability on January 1.

Mukherjee insisted that India would continue to put pressure on Pakistan through diplomacy.


Pakistan kills 3 in Afghan supply route operation
By RIAZ KHAN Associated Press Writer © 2008 The Associated Press
Dec. 31, 2008, 8:56AM

PESHAWAR, Pakistan — Pakistani troops killed three militants in an operation to secure the major supply route to U.S. and NATO troops in Afghanistan, an official said Wednesday.

The route through the famed Khyber Pass remained closed for a second day because of the operation but will hopefully reopen soon, said Fazal Mahmood, a local official.

The U.S. military has praised the campaign and said the temporary closure of the road was not a problem.

Western forces in landlocked Afghanistan rely on the winding, mountainous road for delivery of up to 75 percent of their fuel, food and other goods, which arrive in Pakistan via the port city of Karachi.

Militants have staged repeated attacks on supply convoys heading along the pass across Pakistan’s western border to Afghanistan, where fighting is escalating seven years after a U.S.-led invasion toppled the Taliban regime.



Jim Sinclair’s Commentary

Beanno works. Happy New Year. Maybe I should say good night, and stop posting?

Russia-Ukraine gas talks ‘fail’

Talks to resolve a gas supply row between Ukraine and Russia have failed, the chief executive of Russian gas giant Gazprom has said.

Alexei Miller said gas supplies to Ukraine would be cut on Thursday but that Russia would do its best to guarantee supplies to Europe.

Russian PM Vladimir Putin earlier claimed that Ukraine would block supplies to Europe if no deal was done.

Ukraine denies owing money to Gazprom, and says it has guaranteed gas transit.

Russia said they would "fully, 100%" cut Ukraine’s supply from 0700 GMT.

There was no immediate comment from Ukrainian state energy firm Naftogaz.


Jim Sinclair’s Commentary

The revenge of the blue collar backbone of nations.

Power to the people.

Vote NO to unbridled greed and white collar CRIME.

Buy ONE Gold coin, and take it home!

Investors dumping dollars, going for gold
by Max Marbut

British poet George Gordon Noel Byron included that line in “Don Juan” early in the 17th century. That same sentiment is ringing true today for investors all over the world. As currency markets become unstable and projections head for the cellar, gold — one of the oldest measurements of wealth — is heading up in all forms.

The devaluation of the U.S. dollar has had a significant impact on the demand for, and therefore the price of, gold. A common way to invest in gold is to buy solid gold coins, which are struck by the U.S. Mint (part ot the U.S. Treasury Department) in West Point, N.Y. The Mint manufactures a variety of platinum, gold and silver coins in various denominations and weights up to the one-ounce American Eagle coins.

Each coin weighs 34.1 grams, with 32 grams (or 1 Troy ounce) of pure gold and an alloy metal which allows the metal to be durable enough to manufacture the coin.

The demand for the coins reached such a point in 2008 that those who sell gold coins were notified in November by the Mint that with the exception of the American Eagle Gold One-ounce and American Eagle Silver One-ounce bullion coins, all 2008-dated bullion coins have been depleted. Introduction of some new 2009 coins has also been pushed back.

The Mint can’t currently get enough of the “blanks” which are used to “strike” the coins, said U.S. Mint spokesperson Michael White. He described the 2008 demand for precious metal coins as “unprecedented.” In fact, after years of decreasing demand for the coins, demand tripled in 2008 compared to 2007 (see chart).



Jim Sinclair’s Commentary

White collar crime is not the only cancer that GOLD fights.

Gold Nanoparticles Don’t Just Look Pretty, They Fight Cancer
Jason Mick (Blog) December 31, 2008 1:20 PM

Gold has fast become one of the most promising materials for building devices on a nanoscale level thanks to a number of favorable properties.  Among the applications of gold nanodevices is the use of gold particles to deliver drugs.  Gold nanoparticles range from small nanoclusters up to larger, more complex nanostructures.

MIT researchers used the latter to create one of the first examples of atwo-drug delivery system.

Frequently, medical problems such as AIDS or cancer are best combated by a mix of drugs; however, drugs typically have different intervals they have to be taken on.  Thus, merely injecting a mix of nanoparticles coated in or containing drugs would not be sufficient.  A more complex delivery system was needed.

The MIT researchers decided to make use of an important property of gold nanoparticles.  Gold nanoparticles, based on their size and shape melt when exposed to certain wavelengths of infrared light.  In the case of drug-carrying hollow gold nanoparticles, the melting process can release drugs at specific locations in the body.

To implement a two drug delivery, researchers used two types of large hollow nanoparticles — longer ones, which they nicknamed "nanobones", and shorter ones, which they nicknamed "nanocapsules".