Posts Categorized: Jim’s Mailbox

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This is correct Wolfgang, I am writing about this currently for subscribers.



As far as I know, and correct me if I’m wrong, the bond market is the largest market in the world (aside from derivatives).

Graham Summers makes sense to me in his thinking. Any Central Bank action, such as QE and ZIRP, is not about resuscitating economic growth, but preventing a bond market collapse, and hence a worldwide financial debacle.

Add the quadrillion dollar derivative market, which is tied to bonds, and you have the formula global Depression.

Of course, despite the reputation and size of Central Banking, we all know the free markets can cut the legs out from under and any Central Bank action. At will.


What’s in your wallet?

CIGA Wolfgang Rech

The ECB Comes Clean On Rising Rates and the Coming Systemic Reset
November 30, 2017

Remember how the Fed, ECB and others all claimed ZIRP and QE were about generating economic growth, making mortgages more affordable, and helping consumers?

Well, that was a gigantic lie. The truth is that every major policy employed by Central Banks since 2008 have been about one thing…

Maintaining the bond bubble.

Governments around the world have used the bubble in bonds to finance their bloated budgets. If interest rates were anywhere NEAR normal levels, most countries would lurch towards default in a matter of weeks.

If you think this is conspiracy theory, consider that the European Central Bank openly admitted this in its semi-annual Financial Stability Review this week:

Even so, [the ECB] said that “higher interest rates may trigger concerns about sovereigns’ debt-servicing capacity,” and noted that “distrust in mainstream political parties continues to rise, leading to fragmentation of the political landscape away from the established consensus.”

Source: Bloomberg.

In plain speak, the ECB is admitting here that if rates were to rise, the financial world would quickly realize that most countries couldn’t finance their debt payments. Indeed, the five largest economies in the world are all near or above Debt to GDP levels of 100%



CIGA Hugh telling it like it really is!



We live a world of double standards for sure. Matt Lauer loses his job and get dogged, while Bill Clinton does the same thing or worse with women and nothing happens!!

Meanwhile the markets are moving like we are in the greatest economic boom in our life time. Absolutely nothing makes sense anymore.

I have been waiting for the world to come to its senses since 2008, only to see things get worse. I do not know what or who to believe in anymore.

I do not know how you and Jim can stay so positive!

Thanks for listening. Peace and god bless.


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Werner sent us a link to what was mentioned on our call Saturday …Isaac Newton went broke chasing a bubble!


How Isaac Newton Went Flat Broke Chasing A Stock Bubble
December 10, 2013

[Editor’s Note: Tim Price, Director of Investment at PFP Wealth Management and frequent Sovereign Man contributor is filling in for Simon today.]

For practitioners of Schadenfreude, seeing high-profile investors losing their shirts is always amusing.

But for the true connoisseur, the finest expression of the art comes when a high-profile investor identifies a bubble, perhaps even makes money out of it, exits in time – and then gets sucked back in only to lose everything in the resultant bust.

An early example is the case of Sir Isaac Newton and the South Sea Company, which was established in the early 18th Century and granted a monopoly on trade in the South Seas in exchange for assuming England’s war debt.

Investors warmed to the appeal of this monopoly and the company’s shares began their rise.

Britain’s most celebrated scientist was not immune to the monetary charms of the South Sea Company, and in early 1720 he profited handsomely from his stake. Having cashed in his chips, he then watched with some perturbation as stock in the company continued to rise.

In the words of Lord Overstone, no warning on earth can save people determined to grow suddenly rich.

Newton went on to repurchase a good deal more South Sea Company shares at more than three times the price of his original stake, and then proceeded to lose £20,000 (which, in 1720, amounted to almost all his life savings).

This prompted him to add, allegedly, that “I can calculate the movement of stars, but not the madness of men.”


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Playing with Nukes has its cost. Courtesy of JB.


Dozens Were Killed In Earthquakes Triggered By Kim Jong-Un’s Powerful Nuclear Missile Test
November 26, 2017

Dozens were killed when North Korean dictator Kim Jong-un’s most powerful nuclear missile test yet caused buildings to collapse.

Houses and a school near his nuclear base at Punggye-ri were brought down when his tests caused a 6.3 magnitude earthquake injuring up to 150 pupils in North Hamgyong Province.

His explosion triggered aftershocks within eight minutes, hitting structures in a nearby village.

News of the deaths emerged today after there were three more shocks following the underground test back in September, according to the Sunday Express.

The fatalities were revealed by a defector group called South and North Development.

News of North Korean deaths has now emerged after being revealed by defector group South and North Development.



A few points on Bitcoin from our friend Warren.



It is an honor writing to you and thank you for your insight over the years.  I value every word spoken.

Here’s a few other nuggets for your call…

Firstly, I believe block chain technology has a great future, however it must be physically backed with a tangible asset.  The real proof is that the Eastern Nations who are setting the stage have been accumulating Gold for years… Once the west is drained they will default on their fiat debt and launch real tangible money again.  China’s debt is to themselves so very easy to default.    China wants to get paid in real things for the things they produce… no more fiat.  That is where Jim Willie’s gold trade note comes in… Petro yuan etc…

Problems with unbacked Crypto Currencies.

  1. Barriers to Entry – There are no barriers to entry if there is no asset backing and anyone can create a Crypto currency… An 18 year old kid at my local JayCar (Radio Shack equivalent in Australia) had developed his own Cyptocurrency 5 years ago. That turned me off completely… anyone can do it and now there are thousands of them.

Careful of Bix on your interview… he is as arrogant as they come and has turned his back on gold…Don’t forget he guaranteed that Ron Paul was going to be President!

  1. Finite Supply – Bix’s is pumping 15 different cryptos now… His video from last week is titled ALERT: 15 Must Have Cyptos… NOW!!

There goes the argument of finite supply… How many coins do those 15 Cryptos represent, 100 Billion coins maybe more?  He is a pure Pump and Dumper and I am sure there are laws against what he is doing.  His mate Jsnip4 has pumped up 30+ cyptos this year alone, one recently was collapsed as a major fraud.  This feels like the .COM bubble days… or maybe the penny stocks on the old Vancouver Stock Exchange…


CIGA G advising us of a crypto boo boo (ie. hack).



Hi Jim and Bill,

I am one of those guys that thought cryptos were safe and a great

way to give “they” a kick in the ass. My “blank” wallet got hacked and

there is NO recourse, NONE!, contrary to what Cliff said about getting

your coins back. Every one of my “assets” are gone and the Exodus Tekkie

says it was my fault. I do not see how this is a viable form of trade

when your money can disappear and there is no way to track the person

responsible. (I consider myself a semi-advanced computer user and had

all of the anti malware and virus protection running on my system).

Best regards,



Nice catch with this one Wolfgang!



With such a stellar balance sheet, why would Alibaba raise money by issuing debt?


They are borrowing in U.S. Dollars.  That’s the clue.

It wouldn’t surprise me if they figure the Dollar is heading downward, big time.

Borrow now with relatively strong Dollars, and pay it back in cheaper Dollars down the road.

It’s the new game in town.  Watch for other foreign companies doing the same.

And, if they are correct, gold will benefit handsomely of course.

CIGA Wolfgang Rech

Alibaba (BABA) Announces Proposed Offering of Senior Notes
November 27, 2017

Alibaba Group Holding Limited BABA) recently announced that it intends to sell U.S. dollar-denominated senior unsecured notes in an underwritten registered public offering.

The interest rate, conversion rate and certain other terms of the notes are yet to be determined. The Chinese e-commerce goliath stated that the net proceeds would be used for general corporate purposes.

On a year-to-date basis, shares of Alibaba have steadily treaded higher. The stock has returned 117.7% compared with the industry’s gain of 65.6%.

Alibaba’s Cash Position

As of Sep 30, 2017, the company had cash equivalents and marketable securities balance of almost RMB159.9 (US$24.0 million) billion compared with RMB148.2 (US$21.9 million) in the prior quarter. Also, the company generated RMB30.5 billion (US$4.59 billion) of cash from operations and RMB22.5 billion (US$3.4 billion) of non-GAAP free cash flow.

We believe that the company has a strong balance sheet, which will help it in capitalizing on investment opportunities and pursuing strategic acquisitions, further improving its growth prospects. Moreover, the senior notes offering will bring down the company’s cost of capital, thus strengthening its balance sheet and supporting growth.

Bottom Line

Alibaba Group caters mainly to its native market. We remain positive about the company’s market position, expanding customer base androbust growth in core e-commerce business.


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Both courtesy of JB.


John Conyers Steps Down From House Judiciary Post After Sexual Misconduct Allegations
November 26, 2017

Rep. John Conyers (D-Mich.) is stepping down as the ranking member of the House Judiciary Committee after allegations of sexual harassment.

“After careful consideration and in light of the attention drawn by recent allegations made against me, I have notified the Democratic Leader of my request to step aside as Ranking Member of the House Judiciary Committee during the investigation of these matters,” he said in a statement.

<blockquote class=”twitter-tweet” data-lang=”en”><p lang=”en” dir=”ltr”>John Conyers is stepping down as the top Democrat on the House Judiciary Committee. <a href=””></a></p>&mdash; Kyle Griffin (@kylegriffin1) <a href=””>November 26, 2017</a></blockquote>

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Courtesy of GG.


The Source Of The Next Crisis
November 23, 2017

In 1992, the CBOE hired Robert Whaley to develop a tradeable volatility product on equity index option prices. A year later, in 1993, the VIX was born when the CBOE started publishing real-time quotes on the implied volatility of the calculated S&P 500 index options. In those early days, I very much doubt Robert ever imagined his volatility index would someday be the cornerstone of some of the world’s most actively traded ETFs. In fact, for the next decade, no VIX instruments traded at all, and it wasn’t until 2004 that the VIX future was listed. And then, it took another five years before the first ETF based on those futures hit the exchanges. But what a ride it’s been.


Nowadays, everyone knows the VIX index. It’s no longer some arcane index reserved for derivative traders, but instead a highly liquid, easily traded way to bet on future implied volatility. And I doubt most participants realize that last part. They are not betting on current volatility. They are not betting on future volatility. They are betting on future implied volatility. Remember that point. It’s important. We’ll come back to it later.

During the 2008 Great Financial Crisis, implied volatility went through the roof.


It had spiked during other crises, like Long Term Capital Management and the Asian crisis, but nothing like 2008.


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CIGA Werner with a very ugly truth …and one must ask the question, “what is the currency actually worth”?



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“Has the world gone crazy with money printing?” Yes it did, many years ago…

Unless, of course, “gravity” pulls stocks and bonds down….in which case, all this money has to go somewhere. Yes it does Wolfgang, gold will accrue capital seeking a place (the ONLY place) without “liability”


“Gravity” is a magnetic force. As such, it not only pulls down, it also pulls up.

This is important regarding our monetary situation.

I heard the traders on “Fast Money” talk about Netflix. They said it is ripe for a takeover. It is selling cheap….only $83 billion!

Think about it for a moment. $83 billion is chump change!!


Facebook and Amazon at 1/2 trillion dollars each

Apple and Google at just under a trillion each

Global debt measured in the trillions

Global derivatives measured in the quadrillions

And we all know bonds, of almost every nationality or credit rating, are soaring so high that some are even at negative interest rates.

Has the world gone crazy with money printing?

Certainly, with all the excessive newly printed fiat currency sloshing all over the place, the current stagnant prices of gold and silver are beginning to resemble the price of a pack of chewing gum!

As the “gravity” of all this money is pulling equity and bond prices to the heavens, eventually it will also pull undervalued gold, silver, copper, nickel, houses, cars, clothing, food, etc. right up there with the speculative excesses of these financial instruments.

Unless, of course, “gravity” pulls stocks and bonds down….in which case, all this money has to go somewhere. That somewhere being the OTHER remaining assets I just mentioned. Then stocks and bonds could wave hello and goodbye on the way down, as they pass gold and silver on their way up.

Mean reversion anyone?

CIGA Wolfgang Rech

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Here is some sanity in a sea of tulip-like madness.

Compliments of Wolfgang.



From our friend Nat.



Guys, for your daily chuckle and reflection. Doesn’t there seem to be a bit of a dichotomy in these two gems?

Best of health to you and your families,




We always knew it was a game of dominoes, just not “who” would be first? Is it Venezuela? Courtesy of JB.


Who’s Next? Venezuela’s Collapse Puts These Nations At Risk
November 18, 2017

It’s a wake-up call for a lot of people who will say ‘Look, the stuff I own is actually very risky’…” warns Ray Jian, who oversees about $6 billion at Pioneer Investment Management Ltd. in London. “People have been ignoring risks in places like Lebanon for a long time,” and the official default of Venezuela this week has emerging-market money managers are looking to identify countries that might run into trouble down the road.


While Bloomberg reports that while none are nearly as badly off as Venezuela – where a combination of low oil prices, economic mismanagement and U.S. sanctions did the country in –  traders are scouting for credit risk, from Lebanon, where Prime Minister Saad Hariri’s sudden resignation has once again thrust the nation into a Saudi-Iran proxy war, to Ecuador, where recently elected President Lenin Moreno continues to expand the debt load in a country with a history as a serial defaulter.


1. Lebanon:

One of the world’s most indebted countries, Lebanon may hit a debt-to-gross domestic product ratio of 152 percent this year, according to International Monetary Fund forecasts. That’s coming at a time when political tension is rising. Hariri’s abrupt resignation, announced from Riyadh on Nov. 4, triggered about $800 million of withdrawals from the country as investors speculated that the nation would be in the crosshairs of a regional feud between the Saudis and Iranians. While the central bank says the worst may be over, credit-default swaps have hit a nine-year high.


What are they afraid of if they can back their actions as honorable in the first place? Evil fears the light, requesting their testimony be sealed tells me all I need to know! Courtesy of JB.


Lerner, Paz Say They Fear Physical Harm From Enraged Public, Want IRS Testimony Sealed Permanently
November 19, 2017

Former IRS executive Lois G. Lerner told a federal court last week that members of her family, including “young children,” face death threats and a real risk of physical harm if her explanation of the tea party targeting scandal becomes public.

Ms. Lerner and Holly Paz, her deputy at the IRS, filed documents in court Thursday saying tapes and transcripts of depositions they gave in a court case this year must remain sealed in perpetuity, or else they could spur an enraged public to retaliate.

“Whenever Mss. Lerner and Paz have been in the media spotlight, they have faced death threats and harassment,” attorneys for the two women argued.

Ms. Lerner and Ms. Paz gave taped depositions in a class-action lawsuit brought by tea party groups demanding answers and compensation for having been subjected to illegal targeting for their political beliefs.

The government settled the class-action lawsuit in Ohio and another tea party challenge in the District of Columbia in two agreements last month, admitting to the illegal behavior. The Ohio settlement also called for the government to pay $3.5 million to the tea party groups, according to one of the plaintiffs.

Ms. Lerner came in for particular criticism, with the government admitting she not only didn’t stop the targeting — contradicting the Obama administration’s claims — but also hid it from her superiors in Washington.

During the course of the Ohio case, the tea party groups filed thousands of pages of documents, but testimony from Ms. Lerner and Ms. Paz was left out of the public record because of their earlier request for privacy.

Now Ms. Lerner and Ms. Paz say that since the case has been settled, there is no reason for their testimony to ever become public.

“The voluminous record of harassment and physical threats to Mss. Lerner and Paz and their families during the pendency of this litigation provides a compelling reason to seal the materials,” the women’s attorneys said.


Compliments of JB.


Keith Neumeyer: The Numbers Sound Crazy, But I Predict $8,000 Gold & $130 Silver
November 19, 2017

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Keith says the reason the resource markets are lagging is due to institutions not entering the metal market. Until there is a crack in the major markets, we will not see institutional money flow into the mining equities. The market is quite similar to the year 2000 when it was flat and then took off. History is repeating itself. We need some sort of correction and sane-ness to enter the market. He feels the coming bull market will be quite impressive.

He thinks the mining sector over the next decade will become a much more efficient business. Miners will be in a rising metal price environment. He’s not concerned about being wrong in the short term to be right in the long run. When the market turns, it will turn quickly.

The current silver price is almost a joke. We’ve seen lead, zinc, nickel, lithium, and cobalt make significant price rises but gold and silver remain flat. Silver is ignored as a cheap gold substitute, and that is a wrong assumption. Silver is a strategic metal needed in all sorts of applications, and modern society would not function without it. It’s shocking that this hasn’t been noticed by more people as a result production continues to decline.