Posted at 3:31 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

The labor force participation rate declined by 0.2 percentage points to 62.7 percent in May, but has shown no clear trend over the past 12 months. The employment-population ratio edged down to 60.0 percent in May. (See table A-1).

Don’t forget that the figures are misleading because a lot of people that work part time are included in the employment rate. It is all optics!

CIGA GG

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I expect we will see a belated reaction when people finally wake up to what is happening or when we again see some weak economic figures. The US dollar is toast!

CIGA GG

Jim/Bill,

I have only one question………

Who will buy the “crap” (MBS)?

and the bigger “crap” (TRSY’s)?

CIGA Wolfgang Rech

Fed Reveals Balance Sheet “Normalization” Schedule: Will Reduce Reinvestments By $10BN/Month
June 14, 2017

Coming in earlier than many expected, the Fed for the first time laid out how it plans to “normalize” its balance sheet which it expects to reduce by trimming reinvestments in TSYs at a rate of $6Bn/month initially, and MBS at $4Bn/month, or a total of $10bn/month, and will increase the reinvestment caps in steps of 10bn at 3 month intervals over 12 months until it reaches a total 50bn per month.

Indicatively this is well below Goldman’s expectation of $10bn and $5bn initial caps for TSYs and MBS, as we showed over the weekend.

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As its said in the addendum to the materials, “the Committee currently expects to begin implementing a balance sheet normalization program this year, provided that the economy evolves broadly as anticipated” with directions to read a Policy Addendum.

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One noteworthy reality about Europe’s current political leadership is summarised here by Phil Lawler:

“• Macron, the newly elected French president, has no children.

• German chancellor Angela Merkel has no children.

• British prime minister Theresa May has no children.

• Italian prime minister Paolo Gentiloni has no children.

• Holland’s Mark Rutte,

• Sweden’s Stefan Löfven,

• Luxembourg’s Xavier Bettel,

• Scotland’s Nicola Sturgeon—all have no children.

• Jean-Claude Juncker, president of the European Commission, has no children.

“So a grossly disproportionate number of the people making decisions about Europe’s future have no direct personal stake in that future.”

If true, this is most interesting…

CIGA B

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Jim/Bill,

Yields on the 10 year bond crashed from 2.20 to 2.11 this morning, indicating worsening economic activity, continued loose monetary policy, and after today, possibly no more rate hikes…lest we dive into a depression.

The smart money (Bond Market) has voted.

CIGA Wolfgang Rech

GM Extends Plant Shutdowns As Toxic Trifecta For Auto Loans Fuels Carmageddon
June 14, 2017

In yet another unsurprising headline, The Wall Street Journal reports that GM will extend the typical summer shutdown at certain U.S. factories to deal with slumping sales and bloated inventory, a sign the industry’s hot streak is grinding to a halt.

The No. 1 U.S. auto maker in terms of sales will idle its Chevrolet Malibu factory near Kansas City for five weeks starting in late June, Vicky Hale, president of the United Auto Workers Local 31, said. Job cuts will be needed if GM is forced to slow assembly-line speeds when those workers return.

Additional downtime is also slated in Lordstown, Ohio, a small-car factory already stung by deep layoffs related to a pullback in demand for passenger cars. A GM spokesman declined to comment on specific plans.

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Tanzania’s Acacia Spat Shows Deepening Battle With Business
June 14, 2017

Tanzanian President John Magufuli’s escalating battles with business risk alienating the very investors he needs to drive his multi-billion dollar industrialization policy.

On Monday, the 57-year-old leader ratcheted up his dispute with miners by accusing Acacia Mining Plc of operating illegally in Tanzania and insisting the government is owed billions of shillings of unpaid taxes. It’s the latest in a series of broadsides against private investors who are being unnerved by his administration’s stance and its lack of consultation on policy. Shares in Acacia, which denies any wrongdoing, slumped as much as 16 percent.

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Posted at 12:39 PM (CST) by & filed under In The News.

Bill Holter’s Commentary

And now for the heinous reactions…This is a sickness that spreads our nation, the ignorance and hate is incalculable. As I asked yesterday regarding the NY Times, what would have been the reaction if the situation were reversed? Can you not see civil war as the most logical result?

Left-Wing Twitter Celebrates Shooting of Rep. Scalise [UPDATED]
June 14, 2017

No sooner did news break that a gunman shot Rep. Steve Scalise (R-La.) were left-wing Twitter users celebrating the attack — in which two Capitol Police were also shot, as well as a congressional staffer, and possibly more.

Activist and media personality, Tariq Nasheed, appeared to indicate support for the shooting on Twitter:

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Bill Holter’s Commentary

Another visual for you. China’s liquidity is now “growing” (actually shrinking?) at the lowest level in over 20 years. Please remember this, ALL Ponzi schemes must grow, and GROW exponentially over time to survive. The Chinese are well aware of this and why they have stocked up on real money (gold) over these past years. Could it be “they” are pulling the plug and will end up with all the marbles (gold and infrastructure)? The Chinese are very smart people and know history as well as anyone, Mao called it correctly on August 15, 1971!

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Jim Sinclair’s Commentary

You know they might really believe in their own propaganda. In this case all is lost!

Fed Hikes Interest Rates Despite Declining Inflation, Sets Plan For Balance Sheet Reduction
June 14, 2017

The Federal Reserve approved its second rate hike of 2017 even amid expectations that inflation is running well below the central bank’s target.

In addition, the Fed provided more detail on how it will unwind its $4.5 trillion balance sheet, or portfolio of bonds that includes Treasurys, mortgage-backed securities and government agency debt.

As financial markets had anticipated, the policymaking Federal Open Market Committee increased its benchmark target a quarter point. The new range will be 1 percent to 1.25 percent for a rate that currently is 0.91 percent.

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Jim Sinclair’s Commentary

If this was not written by Simon Black, I would not even be in this set of circumstances to believe or reprint it.

Anyone interested in a nice deposit of gold in Africa which actually looks politically more solid than the USA?

You Won’t Believe This Stupid New Law Against Cash And Bitcoin
June 14, 2017

This one is almost too ridiculous to believe.

Recently a new bill was introduced on the floor of the US Senate entitled, pleasantly,

“Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017.”

You can probably already guess its contents.

Cash is evil.

Bitcoin is evil.

Now they’ve gone so far to include prepaid mobile phones, retail gift vouchers, or even electronic coupons. Evil, evil, and evil.

These people are certifiably insane.

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Jim Sinclair’s Commentary

Madness, total madness. This is the 1930s all over again, insuring that the US and world economies will be in the “out house” for a considerable period of time. This may be the rest of my life.

10-Year Treasuries Break Key Trendline As Yield Curve Collapses
June 14, 2017

10-year US Treasury yields just broke to 2.10% for the first time since November 10th, and more importantly tumbling through a key trendline support from a year ago…

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Sending the yield curve near cycle flats…

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Jim Sinclair’s Commentary

Come on now. This chapter of financial history needs its own Tulip Craze. Be fair.

Bundesbank’s Weidmann: Digital Currencies Will Make The Next Crisis Worse
June 14, 2017

When global financial markets crash, it won’t be just “Trump’s fault” (and perhaps the quants and HFTs who switch from BTFD to STFR ) to keep the heat away from the Fed and central banks for blowing the biggest asset bubble in history: according to the head of the German central bank, Jens Weidmann, another “pre-crash” culprit emerged after he warned that digital currencies such as bitcoin would worsen the next financial crisis.

As the FT reports, speaking in Frankfurt on Wednesday the Bundesbank’s president acknowledged the creation of an official digital currency by a central bank would assure the public that their money was safe. However, he warned that this could come at the expense of private banks’ ability to survive bank runs and financial panics.

As Citigroup’s Hans Lorenzen showed yesterday, as a result of the global liquidity glut, which has pushed conventional assets to all time highs, a tangent has been a scramble for “alternatives” and resulted in the creation and dramatic rise of countless digital currencies such as Bitcoin and Ethereum. Citi effectively blamed the central banks for the cryptocoin phenomenon.

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Jim Sinclair’s Commentary

Barrack did it again! You have to love his consistency.

Barrick Meets With Government of Tanzania to Commence Negotiations
June 14, 2017

Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or the “Company”) Executive Chairman John L. Thornton met today with the President of the United Republic of Tanzania, His Excellency Dr. John P. Magufuli, to discuss issues pertaining to Acacia Mining plc (“Acacia”), and the country’s current ban on mineral concentrate exports.

The meeting was constructive and open, with the parties agreeing to enter into negotiations to seek a resolution that is in the best interests of all stakeholders, including Tanzania, Barrick, and Acacia.

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Jim Sinclair’s Commentary

There is a very simple answer to that question. YES says JES & Free Gold.

Is The Global Gold Price Really Headed To A Jaw-Dropping $20,000 – $150,000?
June 13, 2017

June 14 (King World News) – Despite having been officially outlawed as money decades ago, gold still remains the primary monetary reserve asset of all major central banks. Based on our remarks in this report and the 10 preceding reports, it should be clear that we believe that gold must be regarded as a monetary asset.

We first presented the so-called “shadow gold price” calculated by Paul Brodsky and Lee Quaintance in 2011. This way of looking at the gold price is by no means a mere intellectual game. Rather, it is in line with how the exchange rate between paper money and gold was determined according to the Bretton Woods agreement (US monetary base divided by US gold reserves). As Brodsky and Quaintance explain:

“The Shadow Gold Price extrapolates forward the Bretton Woods model for valuing US dollars (USD base money/US official gold holdings), used from 1945 to 1973. Rather than fixing the gold/USD exchange rate (at 1/35 of an ounce, which assumed a static quantity of base money), it uses the actual quantity of base money vs. actual gold holdings.

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Posted at 2:30 PM (CST) by & filed under In The News.

Judicial Watch Sues Justice Department for Records about Forcing Corporations to Fund Leftist Groups
June 12, 2017

(Washington, DC) – Judicial Watch announced today that it has filed a Freedom of Information Act (FOIA) lawsuit against the U.S. Department of Justice for records relating to an Obama administration policy of settling agency lawsuits against corporate defendants by requiring that the corporations make “donations” to left-wing interest groups La Raza, the Urban League and the National Community Reinvestment Coalition. The lawsuit was filed in the U.S. District Court for the District of Columbia (Judicial Watch v. U.S. Department of Justice (No. 1:17-cv-01064)).

Judicial Watch filed the suit after the Justice Department failed to respond to its April 7, 2017, FOIA request seeking:

All records discussing the policy or practice of settling [Department of Justice] lawsuits against corporate defendants by requiring donations to La Raza, the Urban League or the National Community Reinvestment Coalition.

The time frame of the request was identified as January 1, 2013 through January 20, 2017.

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Bill Holter’s Commentary

…probably those darn “technical difficulties” again?

CNN Cuts Feed After Senator Objects to Clinton Foundation Atty Joining ‘Independent’ Counsel
June 13, 2017

CNN cut away from a Senate Judiciary Committee hearing on Tuesday morning, seconds after Sen. Lindsey Graham (R-SC) raised concerns that Special Counsel Robert Mueller had hired a former Clinton Foundation attorney to assist with the probe into alleged Russian interference in the 2016 presidential election.

Graham was questioning Deputy Attorney General Rod Rosenstein, who was sitting in for Attorney General Jeff Sessions.

Democrats have long accused the Trump campaign of colluding with Russia, though no evidence has emerged. There is also speculation that Special Counsel Mueller will probe allegations of obstruction of justice against President Donald Trump.

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Bill Holter’s Commentary

One must wonder what the response would have been from the NY Times if the office of the President was disgraced with a play depicting Obama’s assassination?  My guess would be outrage?  I believe the fire they are fanning with such ignorant bliss could well end in a bloody civil war where those who are armed slay Alice in Wonderland’s unsuspecting soldiers… Jim calls this an attempted coup, I sadly have to agree.

Trump Assassination Play Is Sponsored By The New York Times
June 9, 2017

A “Shakespeare in the Park” production of Julius Caesar by the Public Theater features a mock assassination of a President Donald Trump lookalike. Public Theater is sponsored by none other than The New York Times.

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Posted at 2:22 PM (CST) by & filed under Jim's Mailbox.

Jim/Bill,

With all the…

fake political news,

fake global news,

fake markets,

fake politicians…

…I find your reaffirmation of gold and silver as the true safety net still refreshing.

Nothing is real anymore in our society, except gold and silver.

CIGA Wolfgang Rech

Posted at 2:52 PM (CST) by & filed under General Editorial.

Dear POTUS,

Can you not see that the resistance movement against you is a modern form of a coup intent on stopping you in any way required legal or illegal? They have no plans to stop the resistance movement for the next 4 years, if then.

In a war you never give the opposition any information, nor do you set yourself up to be outnumbered by those sworn to remove you by any means required.

You expose yourself to interrogation by those who despise you. This will not result in the highest good.

You might as well have a private conversation with the former White House hopeful Satan and her associates, the fallen.

JES

Posted at 9:41 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

WOW, now even brokers are seeing what we have harped on for the past several months? Please read this carefully, the real economy follows “credit creation”!

UBS Has Some Very Bad News For The Global Economy
June 12, 2017

At the end of February we first highlighted something extremely troubling for the global “recovery” narrative: according to UBS the global credit impulse – the second derivative of credit growth and arguably the biggest driver behind economic growth and world GDP – had abruptly stalled, as a result of a sudden and unexpected collapse in said impulse.

As UBS’ analyst Arend Kapteyn wrote then, the “global credit impulse (covering 77% of global GDP) has suddenly collapsed” and added that “as the chart below shows the ‘global’ credit impulse over the last 18 months is essentially mainly China (the green shaded bit), which even now is still creating new credit at an annualized rate of around 30pp of (Chinese) GDP. But the credit impulse is the ‘change in the change’ in credit and even the Chinese banks could not sustain the recent extraordinary pace of credit acceleration. As a result: whereas back in Jan ’16 the global credit impulse was positive to the tune of 3.8% of global GDP (of which China comprised 3.5% of global GDP) it has now fallen back to -0.1% of global GDP (China’s contribution is -0.3% of global GDP).”

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Bill Holter’s Commentary

Yes Mr. Dudley, everyone who hears this is an idiot and fully believes you!

Jim Sinclair’s Commentary

Seth’s parents want you independent investigation of his death, but there seems to be no real official investigation taking place. Now that is strange.

Video Emerges of Seth Rich Questioning Ballot Integrity
June 8, 2017

A video has surfaced of murdered Democratic National Committee staffer Seth Rich questioning ballot integrity during the Election Data Summit in 2015.

“Seth Rich, with the DNC,” he introduces himself, after clearing his throat. “I think some of you had spoken about provisional ballots and rejected ballots — I guess we have looked at, as an outside practitioner with a vested interest in training our voters, how do we get better access to data that tells us why ballots are rejected — why ballots are cast as provisional — so we can analyze that and develop better training guides?”

Rich had valid concerns. During the Democratic primaries the following year, New York voters reported two voter purges that barred 120,000 people from being able to vote. The scandal, months before Rich’s death, had lead to massive outcry from supporters of Vermont Senator Bernie Sanders, who believed that the DNC was engaging in election fraud to nominate Hillary Clinton.

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Bill Gross warns U.S. market risk is at highest since 2008 crisis

June 10, 2017

As stocks continue their inexorable march deeper into uncharted territory, yet another prominent investor has joined the chorus of experts warning of a catastrophic end to the market’s hot streak.

Bill Gross, portfolio manager of the Janus Global Unconstrained Bond Fund, on Wednesday warned that the financial markets are at their most vulnerable since the 2008 financial crisis and investors are paying too high of a price for the risks that they are taking.

“Instead of buying low and selling high, you’re buying high and crossing your fingers,” said the bond guru, speaking at the Bloomberg Invest New York conference.

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Jim Sinclair’s Commentary

The bust will be a series of flash crashes and recoveries until the flash crash of all time does not come back. After that the black hole rules.

‘Horrendous Storm’ To Hit Stocks, Wall Street Not Rational: David Stockman
June 11, 2027

If David Stockman is right, Wall Street should hunker down.

“This is one of the most dangerous market environments we’ve ever been in. It’s the calm before a gigantic, horrendous storm that I don’t think is too far down the road,” he recently said on “Futures Now.”

Stockman, who was director of the Office of Management and Budget under President Ronald Reagan, made his latest prediction after lawmakers grilled former FBI Director James Comey over whether President Donald Trump tried to influence the Russia investigation.

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Posted at 9:38 AM (CST) by & filed under Jim's Mailbox.

If this is true, the sellers of this “risk insurance” need to “lay it off” to someone else. Risk can only be transferred to someone else, never eliminated. It was this laying off of risk that took the market apart at the seams in 1987…

Bill

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Jim/Bill,

What does this mean in common English?

How does this effect me, even though I am NOT in the markets?

CIGA Norma

Traders Are Buying The Most Nasdaq Downside Protection Since Lehman
June 12, 2017

Friday was volumes of Nasdaq ETF put options explode higher as investors rushed to protect their downside as FANG stocks led the tech wreck.

This is the biggest spike in volume since Lehman in September 2008.

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Compliments of GG. All is well! Who are you kidding?

Jim

Is Another Spanish Bank about to Bite the Dust?
June 10, 2017

After its most tumultuous week since the bailout days of 2012, Spain’s banking system is gripped by a climate of fear, uncertainty and distrust. Rather than allaying investor nerves, the shotgun bail-in and sale of Banco Popular to Santander on Tuesday has merely intensified them. For the first time since the Global Financial Crisis, shareholders and subordinate bondholders of a failing Spanish bank were not bailed out by taxpayers; they took risks in order to make a buck, and they bore the consequences. That’s how it should be. But bank investors don’t like not getting bailed out.

Now they’re worrying it could happen again. As Popular’s final days showed, once confidence and trust in a bank vanishes, it’s almost impossible to restore them. The fear has now spread to Spain’s eighth largest lender, Liberbank, a mini-Bankia that was spawned in 2011 from the forced marriage of three failed cajas (savings banks), Cajastur, Caja de Extremadura and Caja Cantabria.

This creature’s shares were sold to the public in May 2013 at an IPO price of €0.40. By April 2014, they were trading above €2, a massive 400% gain. But by April 2015, shares started sinking. By May 2017, they were trading at around €1.20.

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CIGA GG says that now it is becoming fun!

Jim

Feinstein: “Congress Should Investigate If Lynch Pressured Comey To Cover For Hillary Clinton”
June 11, 2017

In a surprisingly non-partisan take by Dianne Feinstein, the top Democrat on the Senate Judiciary Committee, the California senator said that Congress should investigate whether – as we discussed last Thursday – former Attorney General Loretta Lynch pressured former FBI Director James Comey to cover for Hillary Clinton’s presidential campaign.

“I think we need to more about that, and there’s only one way to know about it and that’s to have the Judiciary committee take a look at that.”

“I think we need to know more about that,” Feinstein told Briana Keilar on CNN’s State of the Union, adding that “there’s only way to know about it, and that’s to have the Judiciary Committee take a look at that.”

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Jim/Bill,

Nice way for ex-Presidents to talk!

He may well be correct, but nonetheless, you just don’t say this.

Nobody in our political system has “class” anymore. That could be the reason the world doesn’t respect us anymore.

Want class? Get gold!

Quiet, understated, rolls with punches, and ALWAYS wins in the end.

CIGA Wolfgang Rech

Obama Reveals True Thoughts On Trump: “He’s Nothing But A Bullshitter”
May 18, 2017

People Magazine decided to dedicate their cover story this month to their beloved “cool, even-keeled, no-drama Barack Obama.” And even though it will come as surprise to precisely no one, the story apparently includes the “bombshell” revelation that….wait for it…Obama can’t stand Trump…shocking, we know.

According to two anonymous sources friendly with the Obamas, People Magazine revealed that Obama frequently describes Trump as “nothing but a bullshitter”…

“He’s nothing but a bullsh–ter,” Obama told two friends early last November, describing an election night phone call with Trump, in which the businessman suddenly professed his “respect” and “admiration” for Obama—after years of hectoring.

Speaking to PEOPLE for its new cover story on Obama and his wife Michelle adjusting to life outside the White House, the two friends quoted Obama’s blunt assessment of President-elect Trump. And how has Obama’s opinion changed since Trump been in office? “Well,” said one of the sources, “it hasn’t gotten any better.”

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Posted at 9:35 AM (CST) by & filed under USAWatchdog.com.

June 11, 2017

Analyst/trader Gregory Mannarino says do not be fooled by the stock markets at or near all-time highs. Friday, the tech heavy NASDAQ suffered a massive selloff late in the day after hitting all-time highs. What happened? Mannarino explains, “There is no doubt that we are in financial fantasyland. It is epic. So, have we just witnessed the bursting of this bubble? It is very possible, and the reason why is because it came out of nowhere. It wasn’t driven by a geopolitical event. It wasn’t driven by a downgrade. It wasn’t driven by anything, it just happened. . . . There is going to be a moment of reckoning. If this is real. If this is an actual bursting of a bubble here, the tech bubble, we might get a follow through on Monday or we might get a bounce, and that will lead to a follow through. . . . I am telling people to watch out because the fact this came out of nowhere and driven by nothing is a big tell.”

Even if this is not a sign of a meltdown, one is baked in no matter what, according to Mannarino. Mannarino contends, “Nothing is real here . . . . You watch these financial commentators talk about this market like it is real. If it were real, the Federal Reserve would not be taking the largest part of this market for the better part of a decade now. They are artificially suppressing interest rates and creating bubbles like we have never seen. These are the worst distortions that have ever been seen in the history of the financial world. That’s a fact. It’s worse than the Dotcom bubble and way worse than the 2008 meltdown. This one has the potential to make the last two look like walking through Central Park with an ice cream cone. Are they going to use this against President Trump? They are going to twist this, and we need to be ready for anything.”

The so-called Deep State has been trying to take President Trump down, and nothing has worked. If the Deep State cannot take Trump down, what are they going to do? Mannarino says, “They are going to collapse the economy. They are going to wipe out the economy, and they are going to hurt everybody. Housing is in a bubble and it’s cracking. . . . The markets are in bubbles that are truly epic. This is all being supported on the back of a debt bubble. That’s what they are going to do. No doubt about it. If they can’t get Trump any other way, they are going to collapse the economy. . . . We are going to see a wave of wealth go from one group of people to another group of people. This is the setup that has been going on for a long time. . . . There are those on the inside that are determined to bring down this country. If this thing comes apart, we have the potential for civil war right here in the United States.”

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