Posts Categorized: Jim’s Mailbox

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Yes Wolfgang, as we have said for several years, it really is all about debt…TOO MUCH of it!



Let this sink in!

“Never before in human history have we seen so much debt.  Government debt, corporate debt, shadow-banking debt, and consumer debt are all at record levels. Not just in the U.S., but all over the world.

If you are thinking this is a “Goldilocks economy,” “there is no recession in sight,” “Central Banks have this under control,” and that “I am just being bearish,” you would be right.

But that is also what everyone thought in 2007.”

Being prepared, for what’s to inevitably come, is half the battle.

CIGA Wolfgang Rech

What Could Go Wrong? The Fed’s Warns On Corporate Debt
May 5, 2019

Authored by Lance Roberts via,

“So, if the housing market isn’t going to affect the economy, and low interest rates are now a permanent fixture in our society, and there is NO risk in doing anything because we can financially engineer our way out it – then why are all these companies building up departments betting on what could be the biggest crash the world has ever seen?

What is more evident is what isn’t being said. Banks aren’t saying “we are gearing up just in case something bad happens.” Quite the contrary – they are gearing up for WHEN it happens.

When the turn does come, it will be unlike anything we have ever seen before. The scale of it could be considerable because of the size of some of these leveraged deals.” – Lance Roberts, June 2007

It is often said that no one saw the crash coming. Many did, but since it was “bearish” to discuss such things, the warnings were readily dismissed.

Of course, what came next was the worst financial crisis since the “Great Depression.”

But that was a decade ago, the pain is a relic of history, and the surging asset prices due to monetary policies has once again lured both Wall Street and Main Street into the warm bath of complacency.

It should not be surprising warnings are once again falling on “deaf ears.”



Not off base Wolfgang, right on point!



Still more Moral Hazard?

First of all, isn’t that what QE is?  Buying bonds to inject cash?

Only, instead of arbitrarily buying bonds, you’re targeting specific issues.

Secondly, now bond investors don’t have to worry about losing money.  The FED would have their back.

Moral Hazard.  Throw caution into wind.  Damn analysis.  Just buy, buy, buy.

You’re creating a demand for paper which the rest of the world is shying away from.

Thirdly, what happens when interest rise?  Imagine the losses the Fed would take.

Am I off base?

CIGA Wolfgang Rech

Fed Launches “Rate-Peg-Instead-Of-QE” Trial Balloon For Next Crisis
May 10, 2019

Authored by Wolf Richter via,

Wall Street hype artists and assorted QE mongers would be deeply disappointed.

This came packaged into the middle of a speech by Federal Reserve Board Governor Lael Brainard, on “How Does Monetary Policy Affect Your Community?” It was under the subheading, “Some Issues to Explore.” And it would be a huge shift in how the next crisis will be handled.

During the next crisis when short-term interest rates are already at zero – for the Fed, that is still the lower bound – the Fed might not do the type of QE it did during and after the Financial Crisis when it set a target to buy a fixed amount of securities every month.

Instead, during the next crisis, when 0% short-term interest rates are no longer enough to stimulate the economy, the Fed might announce a target for slightly longer-dated interest rates, such as one-year rates, Brainard said. And it would buy just enough securities with those maturities, to bring the one-year yield down to the target range. And if more stimulus is needed, it might target two-year rates, she said:

Under this policy, the Federal Reserve would stand ready to use its balance sheet to hit the targeted interest rate, but unlike the asset purchases that were undertaken in the recent recession, there would be no specific commitments with regard to purchases of Treasury securities.


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Who needs supply when you have paper?

Courtesy of JB.


MORE TROUBLE IN MEXICO: Second Largest Silver Mine Suspended Operations
May 1, 2019

In just a little more than a week after the mighty Newmont-Goldcorp merger was finalized, the company suspended operations of its largest gold-silver mine in Mexico.  The Penasquito Mine, which produced more than a 500,000 ounces of gold and 25 million ounces of silver in a single year, has been dealing with a blockade of its operations since March 27th.

The blockade was started due to issues with the local community in regards to water supply concerns and problems with a trucking contractor.  However, the protests by the local community over water rights have been going on ever since the Penasquito Mine started operations in 2010.

According to the article, Goldcorp using excessive water at Peñasquito mine – critics, research by McGill Research Group, reported that the Penasquito Mine was using three times the amount of water than it originally agreed upon.  Furthermore, the large open-pit gold-silver mine, located in the state of Zacatecas, was also consuming three times the amount of water supplied to the entire City of Zacatecas (population 129,000).


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PT Barnum would be proud.

There’s a sucker born every minute.

First we got tap water bottled for the public and sold at 1000x the price.

Nice scam. And the public deserves every bit of this deception.

Ever have a glass of water sit on a night table overnight and take a drink?

It’s flat and tasteless.

That’s because fresh tap water is aerated for flavor.

Bottled water is no different. Tasteless and flat.


Now we’ve got fake meat.

At a hefty price increase!

It will most likely take the yuppie market by storm.

But not us old timers.

What next?

Meat made from recycled waste products, treated with chemicals and additives for nutrients, texture, and flavor?

What in the world is life coming to?

Want to be healthier? Don’t gorge! Simple.

Or simply eat some veggies with your meat.

Hey…..wanna buy some bronze?

Looks just like gold.

CIGA Wolfgang Rech

Why General Mills, Cargill And Puris Are Cheering Beyond Meat’s Big IPO
May 3, 2019

Beyond Meat, the California meat-substitute maker, soared on its first day on the public markets after a bigger-than-expected initial public offering. And it brought a couple of Minnesota companies along for the ride.

The company’s debut — shares were priced at $25 and closed Thursday at $65.75 — was one of the best IPO performances in years. The New York Times has more details on the IPO itself and where L.A.-based Beyond Meat goes from here.

The Star Tribune, meanwhile, reports on the local impact of the IPO: Golden Valley-based General Mills (NYSE: GIS) was an investor in the startup, which uses pea protein and other vegetable products to make meatless burgers and sausages. And much of the the pea protein used in its recipes comes from Minneapolis-based Puris, which in turn is backed by Minnetonka-based Cargill Inc.

General Mills has been working with Beyond Meat for six years — the startup was one the first outside company backed through 301 Inc., General Mills’ in-house venture capital arm. It’s not clear how big 301’s stake was in Beyond Meat — neither 301 nor General Mills is listed as one of the company’s biggest investors in SEC filings. John Haugen, managing director of 301 Inc., said the company sold its stake as part of the offering.


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CIGA Tom with one of Yra Harris’s gems!


Notes From Underground: Did Xi Just Provide a Clue to China’s Yellow Brick Road?
April 28, 2019

In the past week, we have heard from the Bank of Canada and Bank of Japan. There were no surprises as both institutions noted softness in the global economy. The BOC, as reported by Bloomberg, “fully abandoned its bias toward raising interest rates at the economy grapples with a slowdown.” The BOC overnight rate remains at 1.75 percent, which is deemed appropriate by the Governing Council until the global economy removes some of the uncertainties it is struggling to overcome.

The BOJ statement continued to maintain that it is paramount for Japan to raise its inflation numbers because a failure to do so means this current period of “extremely low levels of short-and long -term interest rates” will continue “for an extended period of time, at least through around spring 2020.” This is aggressive forward guidance, and as the BOJ maintains, is representative of POWERFUL MONETARY EASING.

In an effort to justify its aggressive policy the BOJ said, “The Bank, decided to make clearer its stance to persistently continue with powerful monetary easing while examining uncertainties regarding economic activity and prices including the effects of the scheduled consumption tax hike and developments in overseas economies.”


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 ‘someone’ once again decided that 0830ET was the perfect time to puke over $1.5 billion notional of the precious metal into the market

This is becoming a common occurrence.

Massive paper dumps in thin markets.

If it happened in the equity markets, there would be investigations up the keester!

CIGA Wolfgang Rech

Gold Bounces Off Key Technical Level, Erases Earlier Plunge
April 23, 2019

Update: European markets closed and gold found a bid, erasing earlier losses…












And for now, it has decoupled from the dollar strength…











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A little info on 5G from a friend of JSMineset. Thanks Kevin!


To the UN, WHO, EU, Council of Europe and governments of all nations

We the undersigned scientists, doctors, environmental organizations and citizens from (__) countries, urgently call for a halt to the deployment of the 5G (fifth generation) wireless network, including 5G from space satellites. 5G will massively increase exposure to radio frequency (RF) radiation on top of the 2G, 3G and 4G networks for telecommunications already in place. RF radiation has been proven harmful for humans and the environment. The deployment of 5G constitutes an experiment on humanity and the environment that is defined as a crime under international law.

Executive Summary

Telecommunications companies worldwide, with the support of governments, are poised within the next two years to roll out the fifth-generation wireless network (5G). This is set to deliver what is acknowledged to be unprecedented societal change on a global scale. We will have “smart” homes, “smart” businesses, “smart” highways,
“smart” cities and self-driving cars. Virtually everything we own and buy, from refrigerators and washing machines to milk cartons, hairbrushes and infants’ diapers, will contain antennas and microchips and will be connected wirelessly to the Internet. Every person on Earth will have instant access to super-high-speed, low- latency wireless communications from any point on the planet, even in rainforests, mid-ocean and the Antarctic.

Please read…and sign.

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This is truly unbelievable for the people that understand what is happening here. These are private holdings all bought with printed money. The entire system is propped up with fake money.

CIGA Werner

What’s your currency backed with?


The Bank of Japan Is Now A Top-10 Shareholder In 50% Of All Japanese Companies
April 17, 2019

While traders continue to obsess over daily “China trade deal optimism” headlines, Japan’s central bank is quietly nationalizing its entire market.

The last time we looked at how much of the stock market the Bank of Japan controls, we found that Kuroda’s central bank owned a stunning 75% of all Japanese ETFs as the central bank keeps buying stocks under its ultraloose monetary policy. Perhaps more importantly, as of March 2018, the Japanese central bank has also become a major shareholder in nearly 40% of listed companies. According to Nikkei calculations at the time, the bank was one of the top 10 shareholders in 1,446 listed companies out of 3,735.




The bail out fixed nothing.


After a $354 Billion U.S. Bailout, Germany’s Deutsche Bank Still Has $49 Trillion in Derivatives
April 17, 2019

On July 21, 2011, when the GAO released its audit of the Federal Reserve’s secret $16.1 trillion in bank loans during the financial crisis, a foreign bank ranked number 9 on the list of the largest borrowers. The loans went not just to the largest banks on Wall Street but to foreign derivative counterparties to the Wall Street banks. The foreign bank that ranked 9 on the list of the largest borrowers was Germany’s largest bank, Deutsche Bank, which took $354 billion in revolving loans from the U.S. Federal Reserve.

According to an article in the Financial Times last week “Germany’s federal and state governments have spent €70bn on bailing out banks since the financial crisis, according to an estimate by Gerhard Schick, head of lobby group Finance Watch.” The figure of €70bn is about 79 billion U.S. dollars. Why did the U.S. Fed throw $364 billion at one German bank when its country of origin has only reached in its pocket to the tune of $79 billion for all of its troubled banks? (Read on for the answer.)