Posts Categorized: Jim’s Mailbox

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Jim/Bill,

Telegraphing what’s to come.

The “Golden Swan”?

“Of course, dumping US Treasuries would impede China’s economic growth if dollar assets were sold and converted back into renminbi (which would appreciate). But China could diversify its reserves by converting them into another liquid asset that is less vulnerable to US primary or secondary sanctions, namely gold.

Indeed, both China and Russia have been stockpiling gold reserves (overtly and covertly), which explains the 30% spike in gold prices since early 2019.”

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One day, out of the blue, the Golden Swan will catch us all by surprise.

CIGA Wolfgang Rech

Dr.Doom On Gold & ‘The White Swans Of 2020’
February 19, 2020

Authored by Nouriel Roubini via Project Syndicate,

In my 2010 book, Crisis Economics, I defined financial crises not as the “black swan” events that Nassim Nicholas Taleb described in his eponymous bestseller, but as “white swans.”

According to Taleb, black swans are events that emerge unpredictably, like a tornado, from a fat-tailed statistical distribution.

But I argued that financial crises, at least, are more like hurricanes: they are the predictable result of built-up economic and financial vulnerabilities and policy mistakes.

There are times when we should expect the system to reach a tipping point – the “Minsky Moment” – when a boom and a bubble turn into a crash and a bust. Such events are not about the “unknown unknowns,” but rather the “known unknowns.”

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Guys,

This narration came from one of my good friends in radio. It’s about farmers and it needs to be shared!

Denny

So God Made A Farmer: The Mike Bloomberg Edition
February 19, 2020

http://www.youtube.com/watch?v=WZvGsMN_FUw&feature=emb_title

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Jim/Bill,

There has been much talk about the soaring debt levels.

A look at the chart below makes one think of Zimbabwe or Weimer Germany.

eifme9yu0ae8xnz

Yet a friend of mine stated that when push comes to shove, President Trump will simply fall back on his M.O. which is “Default on the debt”.  Then we’ll start anew.

I said, “think about that for a moment.  If we default who will feel the pain?  Pension funds own bonds, banks own bonds, funds own bonds, foreign corporations own bonds, Central Banks own bonds, etc.

If we default, it will waves of bankruptcies throughout the world and spiral us into a major global depression.  (The only survivors will those who own gold and silver).

Furthermore, all faith in the U.S. Dollar will be lost and hence, hyperinflation will come to be.

Hyperinflation on top of depression!  an event that will no doubt leave everyone speechless.

On another note, look at the period between 1980 and 1990 on the chart.  Those were the Reagan years of renewed prosperity.

His magic bullet was “print your way to prosperity”.  And eventually someone will have to pay.

Jimmy Carter lost the election to Reagan on 2 counts:  The Iran hostage crisis and an $800 billion debt!

yet when Reagan left office, it looks like we hit $3 trillion in debt.  And nobody cared.

CIGA Wolfgang Rech

Wolfgang,

As we have been saying, “one man’s debt is another man’s asset”…

Bill

Jim/Bill,

Yellen says that the FED should buy stocks.

Speaking via video conference with bankers in Kansas City, Yellen said

that the Fed would take a page out of the SNB and BOJ playbook, and might be able to help the U.S. economy in a future downturn if it could buy stocks and corporate bonds.”

Yes, it is illegal.  But we can simply change the law overnight.

I don’t know about you, but imagine the cost of bailing out a 20,000 point drop in the Dow!

The money needing to be printed to do this is mind boggling.  (But don’t worry, not only can we default on our bonds, we can also default on our Dollar)

Yellen also believes another financial crisis will not come in our lifetimes.

File under “Famous Last Words”.

“Will I say there will never, ever be another financial crisis? No, probably that would be going too far. But I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will.”

Hey girl, take a step closer to the abyss and take a look down!

Come on now, don’t be afraid.

It will only hurt if the ledge gives way.  Which………I don’t believe it will.

CIGA Wolfgang Rech

Yellen Says Fed Should Buy Stocks In The Next Crisis
February 18, 2020

Back in June 2017, there were several odd moment of bizarre honesty coupled with schizophrenic confusion under Janet Yellen’s Fed.

First there was San Fran Fed president John Williams, who would eventually on to become the Fed’s #2 when he took over as head of the NY Fed in 2019, who said that “there seems to be a priced-to-perfection attitude out there” and that the stock market rally “still seems to be running very much on fumes.” Williams added that “we are seeing some reach for yield, and some, maybe, excess risk-taking in the financial system with very low rates. As we move interest rates back to more-normal, I think that that will, people will pull back on that.”

Then it was then-Fed vice chairman Stan Fischer’s turn, who echoed Williams in saying that “the increase in prices of risky assets in most asset markets over the past six months points to a notable uptick in risk appetites…. Measures of earnings strength, such as the return on assets, continue to approach pre-crisis levels at most banks, although with interest rates being so low, the return on assets might be expected to have declined relative to their pre-crisis levels–and that fact is also a cause for concern.” Fischer then also said that the corporate sector is “notably leveraged”, that it would be foolish to think that all risks have been eliminated, and called for “close monitoring” of rising risk appetites.

Finally, none other than then-Fed Chair Janet Yellen said that some asset prices had become “somewhat rich” although like Fischer, she hedged that prices are fine… if only assumes record low rates in perpetuity: “Asset valuations are somewhat rich if you use some traditional metrics like price earnings ratios, but I wouldn’t try to comment on appropriate valuations, and those ratios ought to depend on long-term interest rates.”

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Jim/Bill,

A warning sign?

CIGA Wolfgang Rech

Yes Wolfgang,

This is the “Yogi Berra chart”…looks like De va ju all over again!

Bill

Dear Chart of the Day Fan:
Here’s my chart for today. I’ll talk about it shortly after 3:30 p.m. Eastern (12:30 p.m. Pacific) on the Bloomberg Businessweek radio show. Also, I’ll present
my Stock of the Day just after 4:05 p.m. (1:05 p.m.) on the radio and later on social media. You can hear me on Bloomberg Radio or see me at Bloomberg Global News on YouTube. Earlier charts are on my Tumblr page.

Thanks for your interest. It’s appreciated.

Untitled

Shares of U.S. regional banks are suffering just as they did two decades ago, when an Internet-driven bull market ended. A comparison between the KBW Regional Banking Index of 50 lenders and the S&P 500 Index shows as much. The industry gauge’s ratio to the S&P 500 fell Tuesday to its lowest reading since September 2000, according to data compiled by Bloomberg. Tuesday’s close was 39% lower than a peak in December 2016. “Regional banks not crashing on a relative basis” would be a reason to turn bullish about U.S. stocks, J.C. Parets, editor of the All Star Charts blog, wrote in a post Sunday.

Sincerely,
David Wilson

Jim/Bill,

Who would be hurt by a default on our debt?

Or, if your in the mindset of “America would NEVER do that”, then look at it another way: Who would be hurt by a normalization of interest rates?

Either way….scary shit! (excuse the language).

We are no longer approaching ground zero; we are AT ground zero.

The largest buyers, and those with the positive trade surpluses to invest, have left the game and are now sellers (Russia, China, Japan, Germany, Mexico). All that basically remains is the Fed, government funds such as pension and Social Security, US Banks, and other US entities (pension funds, institutions, insurance companies, corporations, and individuals).

Pulling a default is like holding a gun to your own foot and pulling the trigger. (I would have preferred to another body part but it would be too graphic).

All that is left is…drumroll please……….MONETIZATION.

Hell, even helicopter drops would be too slow.

You’d need a quicker and more massive means…..

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CIGA Wolfgang Rech

Wolfgang is on a total roll today! I want whatever vitamins he is on…

Bill

Who Bought The $1.3 Trillion In Debt The US Government Added In 2019?
February 19, 2019

Authored by Wolf Richter via WolfStreet.com,

Treasury securities are hot. The Fed backed up the truck. US banks & others bought too. But China dumped…

The US Gross National Debt spiked by $1.3 trillion over the past 12 months, to $23.3 trillion. These days, trillions fly by so fast it’s hard to see them. But these are the good times. And we don’t even want to know what this will look like during the next economic downturn:

3

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Bill, 
Here’s the original broadcast for 1965. That’s right — 55 years ago!
Denny
…and 100% spot on today!
Bill

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Bill/Jim,
Shut downs are echoing.
JB

USPS Suspends “Delivery Guarantee” On Mail To China As Shipping Industry Faces Global Disruption
February 12, 2020

The United States Postal Service (USPS) announced on Monday that it will be “temporarily suspending the guarantee on priority mail express” destined for China and Hong Kong because of airline and air freight cancellations and other restrictions since the coronavirus outbreak.

“USPS will be temporarily suspending the guarantee on priority mail express international destined for China and Hong Kong, effective Monday, February 10,” a service alert on USPS’ website read.

usps warning coronavirus

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The definition of a rabbit hole? Courtesy of JB.

Bill

BREAKING: Treasury Dept Hands Over Highly Sensitive Financial Records About Hunter Biden to Expanding GOP Senate Probe
February 6, 2020

GOP Senators Grassley (IA) and Johnson (WI) this week requested the official travel documents of Hunter Biden from the US Secret Service.

The Senators are expanding their investigation and just received “evidence of questionable origin” from the Treasury Department.

The Senate committee is also seeking documents on Hunter Biden from the State Department, Justice Department and the National Archives.

Yahoo reported: (emphasis our own)

The Treasury Department has complied with Republican senators’ requests for highly sensitive and closely held financial records about Hunter Biden and his associates and has turned over “‘evidence’ of questionable origin” to them, according to a leading Democrat on one of the committees conducting the investigation.

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Jim/Bill,

This chart should scare the Bejeezus out of everyone.

unnamed

What if a company like Apple quietly bought back 95% of it’s shares?

What do you think the price would be?

Now just imagine, if after they surreptitiously bought back these shares, they suddenly announced a radical innovation in technology that they developed? Something that would change our lives forever?

But there’s no stock to be had for purchase!!!

That’s the situation we have in silver and gold and the coming currency reset.

The only difference is….gold and silver cannot be replaced or created.

And, unlike gold, once silver is used….it’s gone forever.

CIGA Wolfgang Rech

Wolfgang,

Steve St. Angelo is correct. I particularly enjoyed this quote. “The world basically ATE ITS SEED CORN of MONETARY SILVER so we could have more fancy gadgets and technology.” because it basically will be the supercharger to the coming price action.

Best,

Bill

There’s Just Not That Much Silver Investment Insurance To Go Around
February 5, 2020

By the SRSrocco Report,

As the Fed and Central banks continue propping up the financial markets, many precious metals analysts advise owning gold over silver. They say that gold is the key precious metal that will be used to reintroduce a “Sound Monetary System.” However, I believe the real winner in terms of “future value” in percentage terms will be silver, not gold.

Why? It all comes down to ENERGY. While I have repeated myself many times over about energy being the driver of the economy, there is a large percentage of precious metals analysts and investors that still don’t “GET IT.” And even worse than that, one website that publishes my work, REMOVES the energy content from the article, while only allowing the precious metals subject matter to remain… LOL.

I am going to say this once more… IF YOU DON’T UNDERSTAND ENERGY, you will not understand the real reason to own precious metals. For example, after my last video, Gold & Silver Investing: The Amazing Untold Facts, one commenter stated that after they watched the information, they “WOULDN’T SELL THEIR SILVER.

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Jim/Bill,

Think about that…..only 5% of Buffett’s cash can wipe out all available gold in COMEX!

Imagine when everyone starts scrambling to grab some. Good luck with that plan.

What’s even scarier is “Where will Buffett put the other 95% of his cash?”

This lends much credence to Bill’s belief that gold will not only reach $50,000 but surpass it mightily!

It is, and has ALWAYS been….. a dear metal.

CIGA Wolfgang Rech

Wolfgang,

Ultimate price will depend on whether or not we have the gold we claim, and how much more debt/printing is done. Only then can one calculate price.

Best,

Bill

Warren Buffett Could Easily Take Out All The Gold On The COMEX
January 23, 2020

[VIDEO]

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Jim/Bill,

Could Monday be the start of the 2nd American Revolution?

If other states stand up and take notice of what’s going on in Virginia, it could turn quite ugly.

The abuse of power to take away our Constitutional rights (and misappropriate the taxpayer money) is something that has been festering a long time.  Increasingly greater numbers of articles are highlighting this in recent years.

In Virginia, it all began about taking away peoples’ 2nd Amendment rights.  Your right to bear arms.

Criminals are already banned from owning guns….and how’s that working for you?

Now the citizens of Virginia are looking to remove the Governor and his cronies by petition. They will NOT wait till election time to vote them out.   The law states that 10% of the voters (240 thousand signatures) petition to remove the lawmakers, they’ll have to leave office immediately.

So what do the Governor and lawmakers do?  They change the law to make it 25%.

“Virginia says we’re not going to wait, we’ll petition your removal from office and gets almost a 3rd of the 240K signatures to remove the governor and starts petitions to remove deligates.

Virginia govornment responds by introducing a bill to raise the amount of signatures from 10% of the prevailing vote, to 25%.”

As the article states,  this is the very definition of TYRANNY.

Changing the laws to circumvent the wishes of citizens and keep yourself in power.

Watch closely how this evolves.  People are getting tired of politicians.

CIGA Wolfgang Rech

W,

They may have underestimated how many true Americans there are left?

Best,

Bill

Northam Declares State Of Emergency In Virginia Because “Armed Militia Groups Plan To Storm The Capitol”
January 16, 2020

Authored by Daisy Luther via The Organic Prepper blog,

The drama in Virginia has escalated again as Governor Ralph Northam declares an official State of Emergency before January 20th’s “Lobby Day” protests.

Citing violence that erupted in Charlottesville during a Unite the Right rally in 2017, Northam said that there are credible threats that “armed militia groups plan to storm the Capitol” during Monday’s rally. In an executive order, he announced he is banning all weapons from Capitol Square for the day.

redible intelligence gathered by Virginia’s law enforcement agencies indicates that tens of thousands of advocates plan to converge on Capitol Square for events culminating on January 20, 2020. Available information suggests that a substantial number of these demonstrators are expected to come from outside the Commonwealth, may be armed, and have as their purpose not peaceful assembly but violence, rioting, and insurrection. Assuring that Virginia’s Capitol Square and surrounding public areas are sheltered safe places for those who come to participate in the democratic process, as well as those who work on or near Capitol Square, is my greatest priority.

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The wheels of justice turn very slowly, but they are apparently turning! Courtesy of JB.

Bill

Judicial Watch: Federal Court Orders Snap Hearing on Awan Brothers, Congressional Democrat IT Scandal After DOJ Files Document Under Seal
January 14, 2020

(Washington, DC) – Judicial Watch announced today that a federal court yesterday ordered a snap hearing after the Justice Department submitted information under seal on Friday following the court’s demand for an explanation of why no records have been produced in the ongoing legal battle for documents about the Congressional Democrat IT (information technology) scandal involving the Awan brothers. The hearing is set for tomorrow, January 15, at 10 am.

In November 2018, Judicial Watch filed a Freedom of Information Act (FOIA) lawsuit against the FBI over two FOIA requests for records related to the Awan brothers (Judicial Watch v. U.S. Department of Justice (No. 1:18-cv-02563)).

In August 2019, the Justice Department told the court that it would begin producing records by November 5, 2019. After producing no records, on November 13, 2019, the agency told Judicial Watch that it was having “technical difficulties,” and in a recent email claimed that “difficulties with the production remain.”

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Bill,

Looks like Christmas sales sucked after all, wait for online sales to fail.

JB

JB,

Sales are going to be great! They’re going to be great…never mind.

Bill

Target Shares Plunge After Holiday Sales Missed Forecasts
January 15, 2020

Target shares plunged as much as 8.8% on Wednesday morning after it cut its fourth-quarter comparable sales view due to a rather depressing holiday sales season, missing the average Wall Street estimates.

2020-01-15_07-25-12

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Jim/Bill,

The title should read “He Knows When You’ve Been Sleeping”

The fix is in against the populace.

Banks benefit and the upper 10% benefit.

The bottom 90%……let them eat cake.

The pickle the FED is in:

Higher rates, which will definitely come, will decimate every financial institution!

He (Fed Chair Powell) continues:

“Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy”.

You think?

“Spurred by low interest rates and loose financial conditions, we estimate that total global debt will exceed $257 trillion in Q1 2020.
A total of more than $19 trillion of syndicated loans and
bonds will mature in 2020
.

edition.cnn.com/2020/01/13/economy/global-debt-record/index.html?utm_content=2020-01-13T20%3A30%3A57&utm_term=link&utm_medium=social&utm_source=twbusiness …

If rates begin moving higher sooner rather than later, the $19 trillion could trigger the collapse of the $257 trillion global debt, which in turn could trigger the quadrillions in derivatives.

The choices are clear…….either continue printing money and welcome hyperinflation or reverse the process to normalcy and welcome massive depression.

Now stop and think for a moment…where do you put your money to safeguard it?

Here’s a another pickle…….who benefits from QE?

Why do you think the major money center banks are reporting great earnings?

    -The Fed buying back prearranged auction sales at     enormous monetary benefit to the dealer community.

    -Guaranties to keep rates low and have the money     coming in from the Fed, goes right to the markets to     keep them afloat

    -Usury levels of interest rates on credit     cards…anywhere from 25% to 35% per annum

Simply look at the analysts’ breakdown of the banks’ earnings releases.

As Jim Rogers says:  “This will end badly”.

CIGA Wolfgang Rech

Sadly Wolfgang, they knew the day the current system was set up…!

Bill

He Knows You Know That They Know…
January 15, 2019

Authored by Sven Henrich via NorthmanTrader.com,

Last week we found out that Dallas Fed president Kaplan knows that the Fed is creating excess and imbalances in stocks. Yes, bloating the Fed’s balance sheet by over $400B in four months has a massive impact on stock markets. And billions of repo liquidity unleashed each day can be seen impacting the daily action as well (see: Repo Lightning).

So what’s Jerome Powell have to say about all this? Silence. Not a word.

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Jim/Bill,

Nice article. Yet Simon fails to mention the momentum gaining traction as an alternative form of transactional payments….GOLD.

This is very important as it cuts the time of dependency withdrawal, from the Dollar, from years…to a very short timeframe. No new alternative fiat currency need be developed. Gold will rule.

CIGA Wolfgang Rech

Uncle Sam Just Used Its Financial Nuclear Weapon Again
January 15, 2019

In August of 1945, the United States became the only country to drop nuclear bombs on an enemy.

Hiroshima and Nagasaki were largely destroyed in the blink of an eye. And the Japanese had no choice but to surrender to the Allies, finally ending World War II.

Ever since, world superpowers have been rapidly advancing weapons technology, constantly raising the bar for destructive power.

It won’t surprise you to find out that the most powerful and destructive weapon in the world, though, by far, is claimed by the United States.

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