Posts Categorized: Jim’s Mailbox

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Dismal Dave digs up a quote for the ages!

Bill

‘We are in danger of being overwhelmed with irredeemable paper, mere paper representing not gold, not silver, no sir, representing nothing but broken promises, bad faith, bankrupt corporations, cheated creditors and a ruined people.’ Daniel Webster. Speech in the US Senate, 1833. (1782-1852).

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CIGA Robin sends us the irony of ironies!

Bill

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Wolfgang, it has been said “hope is the vestige of fools”. I believe this saying is substantially correct. Best,

Bill

Jim/Bill,

This is what are markets have been reduced to…..

“The University of Michigan Sentiment survey beat expectations with its preliminary August print (97.6 vs 94.0 exp) driven by a massive spike in ‘hope’ as currenct conditions slump to their weakest since Nov 2016.”

“Hope” trumps (no pun intended) Stats”.

If you can’t prove, with actual facts, that the economy is roaring ahead, use “Hope” as your primary proof.

What next when you can’t even use “Hope”? “Take our word for it” ?

PT Barnum WAS right…..”There’s a sucker born every minute”.

CIGA Wolfgang Rech

UMich Beats But Warns A Drop Is Imminent
August 18, 2017

The University of Michigan Sentiment survey beat expectations with its preliminary August print (97.6 vs 94.0 exp) driven by a massive spike in ‘hope’ as currenct conditions slump to their weakest since Nov 2016.

How long will that ‘hope’ spike last?

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A very astute question Werner!

Bill

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Our friend Robert checks in regarding the debt bubble in China. We must sound like broken clocks but history will look back at this period in time and wonder how the public could not see …it’s all about credit, TOO MUCH OF IT!

Bill

So When Will China’s Debt Bubble Finally Blow Up?
August 17, 2017

Corporate debt in China has soared to $18 trillion, or 169% of GDP, the largest pile of corporate debt in the world, according to the worried Bank for International Settlements. The OECD has warned about it earlier this year. The New York Fed warned about this debt boom in February and that it could lead to a “financial crisis,” but that authorities have many tools to control it.

The IMF regularly warns about China’s corporate debt, broken-record-like, and did so again a few days ago, lambasting the authorities for their reluctance to tamp down on the growth of debt. The “current trajectory,” it said, “could eventually lead to a sharp adjustment.”

The Chinese authorities – the government and the central bank, supported by the state-owned megabanks – have allowed some bonds to default, rather than bail them out, to make some kind of theoretical point, and they have been working furiously on a balancing act, tamping down on the credit growth that fuels the economy and simultaneously stimulating the economy with more credit to keep the debt bubble from imploding. A misstep could create a global mess.

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The real question is not what happens just in China but what is collateral damage outside the country, because they will seek to sell those assets first to protect their internal economy. Otherwise the dragon clans will tear the country apart, just like it has happened before in their history.

Cheers,

Robert

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Jim/Bill,

We increasingly hear about gold’s movement being contrary to what political and economic headlines presuppose.

Gold is telling you something. Listen!

Gold is seeing the “Forest for the Trees”, with the trees being “massaged” economic stats and ancillary markets that supposedly dictate gold’s price.

Stand back and you too will see the light.

CIGA Wolfgang Rech

ECB Minutes Strengthen Dollar and Gold
August 17, 2017

Wednesday was the FOMC and gold rallied, this morning the ECB minutes were released. The euro immediately dropped before cutting some of the losses while gold rallied into a stronger dollar. This just shows how clueless the central bankers around the world are, they have no idea what to do next.

Gold is poised to make the run to 1,300 which it should break through and push higher. Uncertainty and idiocy are everywhere, the FED and the ECB are doing their best to screw up everything, while making policy adjustments that will not work. Kicking the can down the road never works and this time will not be different, BEWARE.

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Gold Shrugs Off 12K Drop In Weekly Jobless Claims
August 17, 2017

(Kitco News) – Gold prices are holding on to overnight gains despite ongoing strength in the labor market.

U.S. initial weekly jobless claims fell by 12,000 to a seasonally adjusted 232,000 in the week to Saturday, the Labor Department said. The total was well below expectations.

Market consensus called for initial claims to be around 240,000. The government left the prior week’s tally unchanged at 244,000 claims.

Gold prices were holding on to solid gains ahead of the report and remain relatively unchanged at $1,290.60 an ounce.

Meanwhile, the four-week moving average for new claims – often viewed as a more reliable measure of the labor market since it smoothens out week-to-week volatility – fell by 500 to 240,500.

Continuing jobless claims, the number of people already receiving benefits and reported with a one-week delay, decreased by 3,000 to a seasonally adjusted 1,953,000 during the week ending Aug. 5, the government said.

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Courtesy of CIGA JB.

Jim

Abraham Lincoln monument torched in Chicago: ‘An absolute disgraceful act’
August 17, 2017

Abraham Lincoln has joined George Washington on the list of those targeted by Chicagoans in a national debate over Civil War-era monuments.

Alderman Raymond Lopez took to Facebook Wednesday night to decry a defaced statue of the nation’s 16th president in the Englewood neighborhood. The giant bust appears to have been damaged after someone in the 15th Ward sprayed and ignited a flammable liquid.

“What an absolute disgraceful act of vandalism. This bust of Abraham Lincoln, erected by Phil Bloomquist on August 31, 1926, was damaged & burned,” Mr. Lopez wrote, a local NBC affiliate reported. “If anyone has any information regarding this act, please contact the police or my office immediately.”

“F- Abe Lincoln,” responded Quintin Mitchell, whose comment was “liked” or deemed “funny” by 160 others.

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Courtesy of CIGA JB

Jim

U.S. pension funds sue Goldman, JPMorgan, others over stock lending market

August 17, 2017

(Reuters) – Three U.S. pension funds sued six of the world’s largest banks on Thursday, including Goldman Sachs Group Inc (GS.N) and JP Morgan Chase & Co (JPM.N), accusing them of conspiring to stifle competition in the more than $1 trillion stock lending market.

In the lawsuit filed in a Manhattan federal court, the funds accused the banks of boycotting start-up lending platforms by threatening and intimidating their potential clients. The defendants include Bank of America Corp (BAC.N), Credit Suisse AG CSAG.UL, Morgan Stanley (MS.N), UBS AG (UBSG.S), Goldman and JP Morgan.

The Iowa Public Employees’ Retirement System, Orange County Employees’ Retirement System and Sonoma County Employees’ Retirement Association said in the lawsuit that the banks have cornered the market on stock lending in violation of federal antitrust law.

“Through various improper means, the likes of Goldman Sachs and Morgan Stanley have for years colluded to maintain their power over this little-known-but-lucrative corner of Wall Street,” said Michael Eisenkraft, a lawyer for the funds and partner with Cohen Milstein.

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Great question JB! …except this is not in the US and not a topic to disrupt or distract so the question will not be asked.

Bill

Get the ropes ready. Half of my relatives already have their helmets. What awful thing should the president call Jews for this that will satisfy nobody?

CIGA JB

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Jim/Bill,

What fascinates me is that despite all these facts, the markets just keep going on as if there is no gravity. It is so surreal that what keeps markets up and makes them fall is so intangible.

CIGA GG

Greyerz – The Greatest Crisis In World History Is About To Be Unleashed
August 15, 2017

Today the man who has become legendary for his predictions on QE, historic moves in currencies, told King World News that the greatest crisis in world history is about to be unleashed.

The Greatest Crisis In World History

Egon von Greyerz: “Totally irresponsible policies by governments and central banks have created the most dangerous crisis that the world has ever experienced. Risk doesn’t arise quickly as the result of a single action or event. No, risk of the magnitude that the world is experiencing today is the result of many years or decades of economic mismanagement. Cycles are normal in nature and in the world economy. And cycles that are the result of the laws of nature normally play out in an orderly fashion without extreme tops or bottoms…

Egon von Greyerz continues: “Just take the seasons. They go from summer to autumn, winter and spring, with soft transitions that seldom involve drama or catastrophe. Economic cycles would be the same if they were allowed to happen naturally without the interference of governments. But power corrupts and throughout history leaders have always hung on to power by interfering with the normal business cycle. This involves anything from reducing the precious metals content of money from 100% to nothing, printing money, leveraging credit, manipulating interest rates, taking total taxes from at least 50% + today from nothing 100 years ago etc, etc.

Governments will always fail when they believe that they are gods. But not only governments believe they perform godly tasks but also hubristic investment bankers like the ex-CEO of Goldman Sachs who proclaimed that the bank was doing God’s work. It must be remembered that Goldman, like most other banks, would have gone under if they and JP Morgan hadn’t instructed the Fed to save them by printing and guaranteeing $25 trillion. Or maybe that was God’s hand too?

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Jim/Bill,

Equities normally show the way. Keep a close eye on $23.25 for the GDX — I think the divisions in the US will negatively influence the US dollar.

CIGA GG

Is Gundlach Right? Are The Gold Miners Breaking Out?
August 10, 2017

During the final hour of today’s trading session notable hedge fund manager Jeffrey Gundlach tweeted that the GDX was breaking out from a “textbook six month pennant formation” – adding that an up day tomorrow would confirm it:

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Jim/Bill,

This is a pure luxury market and reading it’s price development can tell you something about the underlying sentiment.

CIGA GG

What the Heck’s Going On with Vintage Automobiles?
August 15, 2017

The fate of asset bubbles under the new regime.

Everyone is hoping that next Friday and Saturday, at Sotheby’s auction in Monterey, California, the global asset class of collector cars will finally pull out of their ugly funk that nearly matches that during the Financial Crisis. “Hope” is the right word. Because reality has already curdled. Sotheby’s brims with hope and flair:

Every August, the collector car world gathers to the Monterey Peninsula to see the magnificent roster of best-of-category and stunning rare automobiles that RM Sotheby’s has to offer. For over 30 years, it has been the pinnacle of collector car auctions and is known for setting new auction benchmarks with outstanding sales results.

This asset class of beautiful machines – ranging in price from a 1962 Ferrari 250 GTO Berlinetta that sold for $38.1 million in 2014 to classic American muscle cars that can be bought for a few thousand dollars – is in trouble.

The index for collector car prices in the August report by Hagerty, which specializes in insuring vintage automobiles, fell 1.0 point to 157.42. The index is now down 8% year-over-year, and down 15%, or 28.4 points, from its all-time high in August 2015 (186).

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Jim/Bill,

Of course inflation is rampant.

I can’t remember ever seeing steak at $12 – $18 a pound (and that’s at COSTCO!)

Or fish, like halibut at $25 – $28 a pound.

Cigarettes in NYC being raised 25% from $10.50 to $13.00 a pack.

But the hidden message in the article is this:

Inflation is not necessarily about prices all along the supply chain, but about PERCEPTION!

If people perceive inflation, it will feed upon itself and become a self fulfilling prophesy.

More importantly, perception of a weakening dollar could have serious detrimental effects on the entire system! Think Weimar.

CIGA Wolfgang Rech

EXPOSED: Regulators suppress truth about inflation & Fed policy to destroy the US Dollar
August 15, 2017

For savvy investors the fact that the US Dollar loses value every year is no surprise. CEO of JP Morgan (JPM) Jamie Dimon characterized this eloquently with an analogy of ‘musical chairs’ – basically that at some point some asset class has to blow up. There’s actually a reason for this, because in a debt based fiat monetary system, fresh credit needs to be created on a growing basis even to payback the interest on previous credit, or the system will implode (systemically speaking). The Fed knows this, bankers know this, CEOs – about 50% know this, Zero Hedge readers know this, most economists know this…

But this still remains a ‘secret’ of the FX business that regulators don’t want the average retail investing public to know. Now we’ve proven there is a conspiracy to keep these self-evident facts secret:

Inflation is much worse than the Fed is saying

There is a solution to inflation which is called hedging

WHY they don’t want folks to know this – well there can only be one reason. As we’ve exposed in previous articles, banks are making a fortune by people not understanding how FX works. If someone tries to explain it, in a way based on facts and substantiated – that simply can’t be allowed. If the Fed says inflation is 2%, then it’s official – inflation is 2%. Who is anyone to question the Fed?

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Jim/Bill,

President Nixon closed the gold window taking the USA off whatever was left of the Gold Standard. He placed the USA on the Petro Dollar system. Now that the Petro Dollar system is dissolving, not to recover, are we headed to the Total Nothing System akin to Bitcoin?

CIGA JB

Today in 1971: President Nixon Closes the Gold Window
August 15, 2016

5 years ago today, on August 15, 1971, President Richard Nixon officially closed the gold window. While US citizens had been forbidden from owning gold or from redeeming their gold certificates for gold coins since the early 1930s, foreign governments still had the privilege of redeeming their dollars for gold. Due to the Federal Reserve’s inflationary monetary policy during the 1960s, foreign governments began to redeem more and more dollars for gold. Attempts to encourage other governments (especially France) not to redeem their dollar holdings were unsuccessful, and there was a very real threat that US gold holdings might eventually be exhausted. So President Nixon decided to close the gold window, thus severing the final link between the US dollar and gold. The removal of the restraint of gold redemption freed the Federal Reserve to engage in more inflationary monetary policy than ever. The effects of that on money supply and official price inflation figures are readily apparent.

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Jim/Bill,

5000 for the Resistance so far from lies to pure BS. Maybe, just maybe, one for Trump.

CIGA JB

Special counsel’s Russia probe loses top FBI investigator
August 16, 2017

One of the FBI‘s top investigators, tapped by special counsel Robert Mueller just weeks ago to help lead the probe of Russian meddling in last year’s presidential election, has left Mueller’s team, sources tell ABC News.

The recent departure of FBI veteran Peter Strzok is the first known hitch in a secretive probe that by all public accounts is charging full-steam ahead. Just last week, news surfaced that Mueller’s team had executed a search warrant at the Virginia home of Donald Trump’s former campaign manager, Paul Manafort. And the week before that ABC News confirmed Mueller is now using a federal grand jury in Washington, D.C., to collect documents and other evidence.

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Jim/Bill,

Retail sales in the US grew by 0.6% month-over-month in July, following an upwardly revised 0.3% gain in June and beating market expectations of 0.4%. It was the sharpest increase since December, mainly driven by higher sales at miscellaneous store retailers and motor vehicle and parts dealers. — This is the biggest baloney of them all of course! Just look at the figures below. All lies and lies and lies.

CIGA GG

Fund Manager Warns Just How Enormous U.S. Household Debt Has Become

August 15, 2017

Household Debt At Record Level – Bigger Than China’s GDP

The economy continues to grow weaker despite all of the Fed, Wall St. and media propaganda to the contrary. The economy is growing weaker due to the deteriorating financial condition of the consumer, which is by far the biggest driver of GDP in the United States. The only way the policy-makers can avoid a systemic collapse is “helicopter” money printing, in which printed cash or digital currency credits is, in some manner, distributed to the populace.

The Fed reported that non-revolving consumer debt (not including mortgage debt) hit $2.6 trillion at the end of the first quarter. Student loans outstanding hit a record $1.44 trillion. Recall that at least 40% of this debt is in some form of delinquency, default or “approved” non-pay status. Auto loans hit a record $1.2 trillion. Of this, at the very least 30% is subprime. A meaningful portion of the auto debt is of such poor credit quality when it’s issued that it is not even rated. Credit card debt is now over $1 trillion dollars and at a record level. The average outstanding balance per capita is $9600 per card for those who don’t pay in full at the end of the month. Just counting the households with credit card debt balances, the average balance per household is $16,000. The average household auto loan balance for al households with a car loan is over $29,000.

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Jim/Bill,

Rosen’s chart! — I want to emphasize this quarterly chart by Ronald Rosen and how important the $1,312 level is, hence why they are trying to push down gold prices — Don’t forget when time is up, it is up!

CIGA GG

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The Ron Rosen Precious Metals Timing Letter
August 13, 2017

SUNDAY SERMON —————————–

“In contrast to the stock market, commodities most commonly develop extensions in fifth waves within Primary or Cycle degree bull markets. This tendency is entirely consistent with the Wave Principle, which reflects the reality of human emotions. Fifth wave advances in the stock market are propelled by hope, while fifth wave advances in commodities are propelled by a comparatively dramatic emotion, fear: fear of inflation, fear of drought, fear of war. Hope and fear look different on a chart, which is one of the reasons that commodity market tops often look like stock market bottoms.” E. W. P.

D.J.I.A. 1970TO1974

GOLD 1975 TO 1980

COPYRIGHT 2004-2017, RONALD L. ROSEN

Wave 5

COPYRIGHT 2004-2017, RONALD L. ROSEN

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Prepare For Negative Interest Rates In The Next Recession, Says Top Economist
August 13, 2017

Negative interest rates will be needed in the next major recession or financial crisis, and central banks should do more to prepare the ground for such policies, according to leading economist Kenneth Rogoff.

Quantitative easing is not as effective a tonic as cutting rates to below zero, he believes. Central banks around the world turned to money creation in the credit crunch to stimulate the economy when interest rates were already at rock bottom.

In a new paper published in the Journal of Economic Perspectives the professor of economics at Harvard ­University argues that central banks should start preparing now to find ways to cut rates to below zero so they are not caught out when the next ­recession strikes.

Traditionally economists have assumed that cutting rates into negative territory would risk pushing savers to take their money out of banks and stuff the cash – metaphorically or possibly literally – under their mattress. As electronic transfers become the standard way of paying for purchases, Mr Rogoff believes this is a diminishing risk.

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Jim/Bill,

See MSA research for breakout silver!

CIGA GG

Price Of Gold Is Now Approaching “Big Daddy” Breakout. Here Is Key Price The Gold Bull Needs To Hit!
August 13, 2017

With precious metals rallying recently, the price of gold is now approaching the “Big Daddy” breakout!

Gold

By Michael Oliver, MSA (Momentum Structural Analysis)

August 14 (King World News) – On a simple price chart gold is back up into the $1290s, a high it‘s seen twice in recent months…

But for this very long-term momentum chart the readings are not only back up to those two prior highs of the year, but also to all the oscillator highs of 2016 (see chart below).

KWN-MSA-I-8142017

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Coutersy of CIGA GG

Jim

ALERT: Silver Is Now On The Cusp Of A Major Breakout As Gold Surges To Highest Level In Nearly 2 Months!
August 09, 2017

The price of silver is now on the cusp of a major breakout as gold surges to the highest level in nearly 2 months!

KWN note: The report by MSA below was issued late last night, prior to today’s upside action in gold and silver.

Gold Breakout

By Michael Oliver, MSA (Momentum Structural Analysis)

August 9 (King World News) – The weekly close two weeks ago was above our number of $1265 and sufficient to close over the resistance line on momentum (plotted through prior peak weekly closing readings going back to November 2016).

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Jim/Bill,

An outstanding article in its simplicity.

I never really looked at money in this way!

“What’s money worth if interest rates are negative?

Interest rates, after all, are the “price” of money.

When we borrow money from a bank and pay interest on the loan, it means that the money we’re borrowing has value. That –capital- has value.

Negative interest rates, on the other hand, suggest that capital is totally worthless.”

Hence, in the article below, they give examples of how people care very little about their investments. Almost like the CASINO syndrome (they’re chips, not real money, so let me bet a lot of them). Ahhh, it’s only paper. Let me buy the hottest item, regardless of its real value or sustainability.

CIGA Wolfgang Rech

This Cryptocurrency Website Is Selling For More Money Than Facebook’s
August 9, 2017

What’s money worth if interest rates are negative?

Interest rates, after all, are the “price” of money.

When we borrow money from a bank and pay interest on the loan, it means that the money we’re borrowing has value. That –capital- has value.

Negative interest rates, on the other hand, suggest that capital is totally worthless.

This isn’t a philosophical exercise. These are the times we’re living in.

Despite a few tiny increases, interest rates worldwide are still near the lowest levels they’ve been in 5,000 years of human history.

Bankrupt governments across Europe who are already in debt up to their eyeballs have issued trillions of euros worth of new debt with negative yields.

And there have even been famous cases (also in Europe) in which bank depositors have had to PAY interest, while borrowers were BEING PAID to take out a mortgage.

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Dear Jim,

Every once in a while the Chinese surface a sub in the middle of our naval exercise and they say, “Oh, please excuse, we are so stupid. We will never catch up to you Americans; your technology is amazing.” In the meantime our arrogance has blinded us to the true dange the Chinese are preparing for. They are holding a knife to our throats and we think their hands are empty. They have ALL the gold. We have all the debt.

One day soon they are going to get tired of loaning us dollars and getting paid back in wampum.

Respectfully,

Jack Mergott

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Jim/Bill,

COMEX?

I know Shanghai Gold Exchange…but who’s COMEX?

CIGA Wolfgang Rech

China’s Gold Demand Takes Australia By Storm, Breaching $11 Billion Annually
August 10, 2017

(Kitco News) – Chinese gold demand is not letting up, as the country bought 230 metric tons of Australian gold last year, which exceeded $11 billion on the Shanghai Gold Exchange, according to recent data released by The Perth Mint.

It is the quality of Australian gold and its reliable supply that is so attractive for the Chinese market, said Chief Operating Officer of The Perth Mint, David Woodford.

“In 2014, The Perth Mint became the first foreign refinery accredited on the Shanghai Gold Exchange and we have worked steadily to establish this new market,” said Woodford. “Today we are on track to achieve our goal of becoming the biggest source of imported gold in the Chinese market and that is great news for Australian gold producers and Australian mine workers.”

The growth in demand is undeniable, with Australian gold exports to China more than doubling from 2011 to last year, surging from 110 metric tons to 232 metric tons.

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GIGA Ted has some good points, “loyalty” should go both ways.

Bill

Bill/Jim,

I consider myself a “truther” and call it like I see it.

A few things that pissed me off about President Trump is WHY he never mentioned Seth Rich or Dennis Montgomery’s name? It would have put a lot of BS to rest and help put the crooks in jail.

However, it pisses me off even more that President Trump who expects loyalty; is letting Sheriff Joe be hung out to dry!

I’m hoping you will mention this to your viewers and maybe it will get back to President Trump that loyalty goes BOTH ways!

GIGA Ted

“Where is Trump?” Sheriff Arpaio Asks
August 7, 2017

WASHINGTON, D.C. – After being convicted of criminal misdemeanor contempt, former Maricopa County Sheriff Joe Arpaio has come out swinging, arguing the judge was biased and asking why President Trump is abandoning him, considering Arpaio was an early campaign supporter whose conviction reflects the determination to enforce immigration laws the Trump Justice Department is now exhibiting.

“Where is President Trump on this case?” Arpaio asked Infowars.com in an exclusive interview. “This is a witch hunt against me that is being carried forward by Obama holdovers in Attorney General Sessions’ Department of Justice.”

“I’m being convicted for honestly trying to enforce the immigration laws that Trump swore during the campaign he would uphold if elected president,” Arpaio insisted.

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