Posted at 2:24 PM (CST) by & filed under In The News.

Bill Holter’s Commentary

We live in a world that runs on credit. The only way to pay past credit …is with new credit. Credit “contraction” cannot in any way be allowed or the entire credit structure comes down. The scary thing is; what the world calls “money” today is backed by all this wonderful credit!

The Great Shadow Unwind: Chinese Entrusted Loans Post First Decline In 10 Years
May 12, 2017

With everyone, including Pimco, now acknowledging what we said most recently in February, namely that China’s credit impulse is the main, if not only variable, that determines the fate of global reflation …


… the latest credit numbers released by the PBOC overnight very closely watched by macro traders around the globe in light of the ongoing liquidity discussions surrounding the deleveraging narrative.

On the surface, the data wasn’t particularly exciting, with new bank loan data surprising modestly on the upside, most likely the result of less stringent quantitative controls by the central bank instead of a sharp pickup in bottom-up demand from specific sectors. Specifically, new loans amounted to RMB1.1 trillion, above the 815BN expected, while the broader, Total Social Financing dipped from March’s all time high of RMB2.12 trillion to 1.39 trillion, also slighly above the RMB1.15 trillion. This amounted to a 14.5% increase in TSF stock Y/Y, below the 14.8% in March, and another confirmation that China’s credit is slowing down. Mortgage loan supply remained steady at RMB444 bn, little changed from the RMB450 bn in March, despite the property sector supposedly tightening (it would also explain why home prices have again rebounded in recent months).


Posted at 9:26 AM (CST) by & filed under Bill Holter.

Usually it is too much beer that leads to a bar fight, in this case it was “unfairness” and exploitation of the poor!


Suppose that every day, ten men go out for beer and the bill for all ten comes to $100…

If they paid their bill the way we pay our taxes, it would go something like this…

The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12.

The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that’s what they decided to do..

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20”. Drinks for ten men would now cost just $80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? How could they divide the $20 windfall so that everyone would get his fair share?

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer

So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay.

And so the fifth man, like the first four, now paid nothing (100% saving).

The sixth now paid $2 instead of $3 (33% saving).

The seventh now paid $5 instead of $7 (28% saving).

The eighth now paid $9 instead of $12 (25% saving).

The ninth now paid $14 instead of $18 (22% saving).

The tenth now paid $49 instead of $59 (16% saving).

Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.

“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!”

“That’s true!” shouted the seventh man “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.

Author Unknown

Posted at 2:24 PM (CST) by & filed under

The latest is called “Fiscal Bloodbath Coming this Fall-David Stockman.” Sky high stock and bond prices have former Reagan Administration White House Budget Director David Stockman worried because we are on our way to a big financial crash. Stockman explains, “Yes, absolutely. The market is insanely valued right now. They were trying to tag, the robo machines and day traders, they were trying to tag 2,400 on the S&P 500. They ended up at 2,399, I think, but the point is that represents about 25 times trailing earnings for 2016. We are at a point in the so-called recovery that has already lasted 96 months. It’s almost the longest one in history. What the market is saying is we have reached the point of full employment forever. There will never be another recession or any kind of economic surprise or upset or dislocation. The market is pricing itself for perfection for all of eternity. This is crazy. . . . I think the market could easily drop to 1,600 or 1,300. It could drop by 40% or even more once the fantasy ends. When the government shows its true colors, that it’s headed for a fiscal blood bath when this crazy notion that there is going to be some Trump fiscal stimulus is put to rest once and for all. I mean it’s not going to happen. They can’t pass a tax cut that big without a budget resolution that incorporated $10 trillion or $15 trillion in debt over the next decade. It’s just not going to pass Congress. . . . I think this is the greatest sucker’s rally we have ever seen.”

So, when is cold hard reality going to set in? Stockman contends, “There will be no bid for the stock once the panic sets in. We’re going to an hit and air pocket. The S&P 500 is going to drop by hundreds and hundreds of points sometime over the next few months as we drift into this unexpected crisis. . . . I would target sometime between August and November because that’s when the rubber is going to meet the road on a debt ceiling increase when they are out of cash. Washington is going to end up in vicious political conflict over what to do about the debt ceiling. . . . It is going to be one giant fiscal bloodbath the likes of which we have never seen.”

So, what should you do right now? Stockman says, “The main thing is get out of the markets. These markets are unstable. They’re rigged, and there is no reason to own stock at this point of the game. It is so overvalued. Maybe you can get another two or three percent up, but you are facing another 30% or 40% down. The risk/reward is horrible. . . . The bond market is one giant bubble because the central banks have been buying all these bonds worldwide. They’ve been buying trillions of dollars’ worth, and they are still buying a trillion dollars’ worth on an annual basis. All that is coming to a halt. The Fed has finally run out of dry powder. They are out of the bond buying business. They are even talking about the initiation of the shrinkage of their balance sheet. That clearly needs to happen . . . . The central banks are finally getting to the end of the road. There isn’t going to be any more money printing, and that is going to leave a giant mess on the doorstep of all the fiscal authorities. It’s going to make the bond market a particularly dangerous place. There is a $100 trillion global bond market, and this is the biggest bond bubble the world has ever seen.”


Posted at 1:39 PM (CST) by & filed under Bill Holter.

Did I pique your interest with such a goofy title? We’ll get to that shortly but first let’s take a look at the question raised last week, “what are the chances of gold being down 15 days in a row”. I received the answer from statistician Jim Willie. The answer, “in a vacuum” is once in every 32,800 trading days.

This is something like once every 130 years but again, in a “vacuum”. This meaning strictly by chance such as a coin flip. But we do not live in a vacuum, no, we are now living during THE most bullish backdrop in history for gold or conversely THE most fundamentally bearish backdrop for paper currencies and debt. We do not live in a vacuum, we live in an era where the power structure is pulling all the stops to retain their system of power and control, namely U.S. dollar hegemony. Without writing another entire piece on gold manipulation, please understand the world we live in is “painted”. Let’s take a look at some of the artists and their work.

It is obvious (to those who can see truth and took the correct pill), there is and has been a “war” going on for your mind. This is not a recent event as we have seen this since the beginning of time. A prime example is socialism vs. capitalism. Other examples are liberalism vs. conservatism, the belief or non belief in a higher being (religion for a lack of better term), self reliance versus dependence, truth vs. non truth, or even good vs. bad. This “war” has always been around, however, the current tools available to sway opinion have not.

Specifically, the internet. It now turns out and proof has been provided that many entities are “lying” to you. We know many instances where government lies to us from economic numbers to climate theories, to false flag events, and even the money issued. We suspected previously but now know for sure the media is biased as they don’t even bother trying to hide it other than calling anything they disagree with as “fake news”. Companies like Google and Facebook mess with the minds of younger people by “filtering” searches, spreading “their news” and basically “shaping thought”. I would be remiss of course if I did not mention our universities and educational systems, “grabbing” impressionable minds at a young age is obviously the plan.

On the flip side (and though not always correct) are people like Robert Mercer. We see more truth from this side as their arguments are generally more logical and actual proof provided in many instances. But don’t be fooled as the “hunger for power” is just as strong.

The “real news vs. fake news” war has gotten so bad that people don’t even know what to believe anymore. I recently came across this link Scientists are Attempting to ‘Prove’ that ‘Religious’ People are Crazy – Study which was of particular interest to me because it suggests I have brain damage and am “crazy”. I have said we will not try to turn into the “God channel” because religious perspective is not why people seek our opinion. I have however professed my faith as a Christian. There is some very logical reasoning as to why there absolutely must be a higher being or creator. (I will not go there now but will point you in the correct direction should you contact me.) You can believe in a creator or not but you cannot argue the world would be a much better place were everyone to live their lives as Jesus displayed in the Bible! Logically, “doing the right thing” is normally the more difficult thing because it requires an action of “good” versus an easier action of “bad”. In any case, assuming you have read my work and heard interviews, I try to live within logic and with that comes truth. Maybe I am wrong but the search for truth is quite high on my list, brain damage isn’t.

OK, so what spurred such an odd title and writing. My wife Kathryn recently had foot surgery so I have been doing some of her errands. I went to the local producers market for locally grown food and met some really nice down to Earth folks, farmers. Yesterday we ventured into south Austin (baby San Francisco) for pizza. The crowd was mostly young (college students) and definitely “different”. I noticed that at most of the tables and booths, no one was talking or even looking at each other (even couples). Instead, they were texting (each other?), surfing the internet (posting to Facebook?), talking on the phone or whatever …but not interacting with whom they were sitting (except for selfies).

A group of four sat down next to us and the “smart” phones immediately came out. They were all eating pizza with one hand and using their phones with the other. One of the young girls had a nose ring…with a big hunk of cheese hanging from it. She didn’t know because she couldn’t see it …and no one sitting with her said anything because no one ever looked up from their phone. Being the insensitive jerk that I am (because the truth sometimes hurts), I said to everyone at our table (after turning my palms up) …”so, now I know why you shouldn’t wear a nose ring at an Italian restaurant”. Their table didn’t hear me and they walked out together with her cheese “hanging”…

So what’s my point? Please understand there is an absolute war on for your mind! You can either sit back and be “fed” information, or you can actively “seek” information in a search for the truth. Financially the entire world is about to go bust, this is factual mathematics. I saw two opposite ends of the spectrum over the weekend, self reliant rural farmers and totally dependent (and brainwashed by technology) urban dwellers. When the financial (and thus social) ship hits the sand, which of these groups will survive? Which of these groups has the intellectual, social and moral fabric to survive in a world that stops because credit stops? This is a very real question because there is no question credit will cease for a time … and maybe a very long time!

To finish, it is up to you to decide what is “real” and what isn’t. It is up to you to decide what is “truth” and what isn’t. Do not let anyone, any group, entity, or government force feed you “reality” because maybe it really isn’t …or won’t be shortly. YOU must decide what is real and take responsibility for your decisions because no one else is bound to and few will be able to. Follow your own gut and use your own God given common sense! I do not know who to attribute this quote to but it describes our world pretty well “Common sense is not a gift – it’s a punishment because you have to deal with everyone that doesn’t have it”

Standing watch while rubbing my eyes,

Bill Holter

Holter-Sinclair collaboration

Comments welcome

Posted at 12:38 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

This Zero Hedge article accomplishes so much that it demands to be posted, so that you do not miss it.

Goldman: “The Last Time Correlations Were This Low Was Just Before The Financial Crisis”
May 8, 2017

In a note from Goldman’s cross-asset strategist Ian Wright, the bank points out something troubling: on one hand, over the past six months, or rather since the US elections, equity markets around the globe have soared, and returns across regions have been “strong” – S&P 500, Stoxx 600, Nikkei 225 and MSCI EM ($) have returned roughly 11%, 16%, 20% and 11% in local currency price terms, respectively, with MSCI World ($) up 12% over the same period. In other words, everything is up. And yet, while equity indices have rallied across regions, inter-regional equity return correlations have actually fallen materially to their lowest levels since 2000.


Why is this troubling? Because as Wright casually throws out, “the last time correlations were this low was in 2007, just preceding the financial crisis”

So does this imply that a financial crisis is imminent? Goldman isn’t sure, and notes that the collapse in correlations “leads to the questions whether we expect correlations to remain low or whether we expect equity markets to recouple and move more in lock step, and what the environment will be from here. In our asset allocation, we are overweight Asian and European equities and underweight US equities over both 3- and 12-month views, with the former on growth expectations inflecting and an earlier cyclical position supporting EM and EAFE while, in the latter, the expectation that higher valuations and the later cycle of the US weigh on returns (see Exhibit 2 for return forecasts).


Posted at 8:53 AM (CST) by & filed under Jim's Mailbox.

From our friend at GATA and one of the earliest truth warriors for gold, Chris Powell.


Those Attacks On Gold Don’t Come From Adam Hamilton’s Mere ‘Speculators’
May 7, 2017

Dear Friend of GATA and Gold:

Every day it seems that the manipulation of the monetary metals markets can’t get any more obvious, and every day it does. But at least the manipulation is starting to aggravate certain mining stock touts who have paid little heed to it.

This week one of those touts, Adam Hamilton of Zeal LLC, wholeheartedly acknowledged what he called “gold futures shorting attacks.”

“The only reason to sell 20,000-plus gold futures contracts within minutes is to brazenly attempt to manipulate gold’s price lower,” Hamilton wrote in commentary posted at GoldSeek, 24hGold, and 321Gold, among other internet sites:

Hamilton added: “Long-side speculators who want to exit positions never sell so fast, since it blasts gold lower, wrecking their exit prices. And the same is true for normal short-side speculators. If they expect gold to drop and want to establish shorts, they execute their selling gradually for the best entries.

“Long-side and short-side speculators alike want to sell gold futures at the highest gold price possible. So they don’t sabotage their own exits and entries by unleashing far more selling than the market can bear. Normal rational speculators enter and exit large positions relative to market volume gradually, over hours. A 20,000-plus contract buy or sell order broken into pieces and spread across hours will have a far-smaller price impact.”

Indeed. But who undertakes these strange attacks? Hamilton can attribute them only to “speculators” who hope to profit by provoking panic selling by ordinary gold investors, through which the “speculators” can cover their shorts. Hamilton adds that these attacks are “always short-lived.”

Yet these attacks often require access to billions of dollars, money available only to the world’s biggest financial institutions, particularly central banks. And while these attacks may be “short-lived” in their individual manifestations, of course they have been happening for years, ever since the gold futures market opened in the United States in 1974, just after the U.S. government sought and received assurances from bullion banks in London that a gold futures market would facilitate the injection of so much volatility that ordinary investors would be scared out of gold:

Hamilton doesn’t seem to have noticed that there are never “gold futures buying attacks,” which, like Sherlock Holmes’ observation about “the dog that didn’t bark,” is a powerful clue about what is really happening in gold. If “speculators” can make money by triggering panic selling in gold, couldn’t they, if they wanted to, also make money triggering panic buying every once in a while? So why don’t they want to?

The answer, of course, is that the attacks are not being undertaken by mere “speculators” at all but by central banks, as GATA long has documented:

But if central banks are ever acknowledged as the manipulators of the monetary metals market, defending their currencies and bonds against a potentially independent world reserve currency, gold and silver mining stocks would have the world’s most powerful enemies and touting them to unwary investors would become much more difficult.

So Hamilton cheerfully assures his readers that “gold stocks are wildly oversold today, poised for a major surge,” and urges them to subscribe to his newsletter, where he will help them invest in a sector that is priced at half of what it was five years ago and even 10 years ago:

Yes, gold and gold stocks are “wildly oversold,” but no amount of touting is going to get them up until the sector and the people who write about it have the wit, integrity, and courage to identify just who is keeping them down and why.

CHRIS POWELL, Secretary/Treasurer

Gold Anti-Trust Action Committee Inc.

Posted at 10:25 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

A breath of fresh air!

Supreme Court Rejects Guilty Until Proven Innocent, Says States Cannot Keep Money From The Innocent
May 2, 2016

With so many constitutional rights under siege, it’s welcome news when one of them is defended. Reaffirming the presumption of innocence, the U.S. Supreme Court struck down a Colorado law last month that forced criminal defendants to prove their innocence when the defendants’ convictions were already overturned. As the court explained, “Absent those convictions, Colorado would have no legal right to exact and retain petitioners’ funds.” Not only is this decision a win for due process, the court’s ruling in Nelson v. Colorado could have major ramifications for government shakedown schemes nationwide.

The case arose after two defendants, Shannon Nelson and Louis Madden, were convicted for sexual offenses and ordered to pay thousands of dollars in court costs, fees and restitution. Between her conviction and later acquittal, the state withheld $702 from Nelson’s inmate account, while Madden paid Colorado $1,977 after his conviction. When their convictions were overturned, Nelson and Madden demanded their money back.

Although a state appellate court sided with them, the Colorado Supreme Court denied their refund request. Instead, the court ruled that Nelson and Madden could reclaim their money only through the state’s Exoneration Act, which requires filing a civil claim and proving “that the person was actually innocent of the crime for which he or she was convicted.”