Posted at 6:24 PM (CST) by & filed under In The News.

Updated March 31, 2017:

Dear Jim, 

You posted an article yesterday suggesting the “bullish sentiment” in silver argues for a correction. This may be true and we may correct lower but I would suggest as you have, the time to buy is when you have the cash. 

Best, 

Bill

Extremely Important Update For Silver Traders And Investors
March 29, 2017

With the price of silver recently breaking back above $18, here is an extremely important update for silver traders and investors…

High optimism in silver

From Jason Goepfert at SentimenTrader: The Optimism Index on silver has climbed above 70, which has been a warning sign in recent years (see chart below).

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Since the bull market peaked in 2011, there have been 34 days when the Optimism Index exceeded 70. Over the next 30 days, silver showed a positive return after only 1 of those days, and the gain was only 0.3%. Its median return during the next 30 days was -5.9%, with risk of -7.9% and reward of +1.7%…

More…

Posted at 12:00 PM (CST) by & filed under General Editorial.

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Posted at 10:29 AM (CST) by & filed under Jim's Mailbox.

Wolfgang, translation: there are no options available that does not destroy the dollar. There are of course the Harry Dent’s of the world who claim a depression/deflation will benefit the dollar but they are smoking “left handers”. Deflation may have benefitted his grandfather’s dollar because it was a direct derivative of gold. Today’s dollar is only a derivative of thin air and fraudulent business practices…

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Bill,

Note the options:

“a fiscal crisis occurred in the United States, policymakers would have only limited—and unattractive—options for responding. The government would need to undertake some combination of three approaches”:

1) restructure the debt: Translation: Default!

2) use monetary policy to raise inflation above expectations: Translation: Hyperinflation!

3) adopt large and abrupt spending cuts or tax increases. Translation: Depression!

CIGA Wolfgang Rech

CBO Warns Of Fiscal Catastrophe As A Result Of Exponential Debt Growth In The U.S.
March 30, 2017

In a just released report from the CBO looking at the long-term US budget outlook, the budget office forecasts that both government debt and deficits are expected to soar in the coming 30 years, with debt/GDP expected to hit 150% by 2047 if the current government spending picture remains unchanged.

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The CBO’s revision from the last, 2016 projection, shows a marked deterioration in both total debt and budget deficits, with the former increasing by 5% to 146%, while the latter rising by almost 1% from 8.8% of GDP to 9.6% by 2017.

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Posted at 11:30 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Talk about all or nothing, today’s vote will determine our future as a nation. A yes vote to repeal will mean we have a governing body. A no vote will mean the people lost and government becomes more (totally) dysfunctional. I cannot stress enough how important this day will be seen by historians.

Jim Sinclair’s Commentary

I have read and agree 100% with Bill’s analysis.

Russian Roulette, Central Banks, and Gold
March 24, 2017

Grab your ultra-reliable 357 magnum revolver and load the cylinder with six, not one, rounds of ammunition. Point the gun at your head if you are a member of the struggling middle-class. Imagine pulling the trigger and hoping …

Do you feel lucky?

The Six Loads of Ammunition for your 357 revolver are:

#1: Central banks and commercial banks exert a huge influence over all aspects of our financial lives. Paper currencies issued by central banks, digital currency units, credit card debt, pension funds, retirement accounts, checking accounts, Quantitative Easing, bond monetization, congress, regulators, Presidents, and the list goes on. Their game, their rules, your losses, and more of the same.

More…

Bill Holter’s Commentary

If you are nervous or even bearish about gold, this is a must read. Highly respected money manager John Hathaway lays out the case for much higher gold prices. Please note the supply and demand situation, his discussion of paper versus physical gold and thoughts on China “revaluing” gold. None of this should be new to you but it should serve as an excellent read to strengthen your convictions!

John Hathaway – China To Radically Reprice Gold Higher In 2017 As Demise Of The COMEX & LBMA Accelerates
March 23, 2017

(King World News) – Gold rose 8.5% for the year while gold-mining stocks (XAU – Philadelphia Gold and Silver Index stocks) rose 75%. On an annual basis, results were highly satisfactory. However, there was considerable drama beneath the surface that left precious metals investors in a state of anxiety by year-end. Precious metals and mining shares rose sharply through August, and then spent the rest of the year giving back much of the first-half gains. The second half downtrend accelerated into early December, following the unexpected victory by Trump and a hawkish statement after the December Federal Open Market Committee (FOMC) meeting…

The Next Big Change In The Gold Price Will Be Substantially Higher

The question of the hour is whether the 2016 gains were merely a countertrend rally following a four-and-a-half-year decline from all-time highs in 2011, or the beginning of a new leg in the secular bull market that began in 1999, during which gold rose from less than $300/oz. to $1900 in August 2011. We judge the weight of current sentiment, mainstream media opinion, and technical analysis to be extremely bearish, comparable to year-end 2015 just prior to the dramatic gains that followed. We believe that, based on prevailing negativity, the next big change in the gold price will be substantially higher. If so, the 2016 second-half correction will have established a durable higher low from the advance that began at year-end 2015, and would be the precursor to the continuation of the secular advance that began in 2000.

More…

Posted at 9:36 AM (CST) by & filed under In The News.

“Just look at us. Everything is backwards, everything is upside down. Doctors destroy health, lawyers destroy justice, psychiatrists destroy minds, scientists destroy truth, major media destroys information, religions destroy spirituality and governments destroy freedom.”

― Michael Ellner …”and money was destroyed a long time ago.” – Bill Holter and Jim Sinclair

Bill Holter’s Commentary

Do you think allowing James Comey to testify to Congress before revealing these revelations was by accident? I would say Mr. Comey just got punked “by accident on purpose”…Can’t wait to see MSM’s reaction to this…!

House Intelligence Chair Devin Nunes: ‘Incidental Collection’ Of Communications From Trump Team During Transition
March 22, 2017

WASHINGTON — In what he called “significant developments,” House Intelligence Committee Chairman Devin Nunes (R-Calif.) said there was “incidental collection” of communications from President Trump’s team between the election and Trump’s swearing in — and Trump himself may have been inadvertently surveilled by U.S. intelligence officials.

Nunes, a Trump ally who is heading the House’s investigations into Russia’s meddling in the election, said he was “alarmed” by the developments. But he repeatedly said that the surveillance was obtained legally from normal intelligence monitoring of foreign sources.

“This appears to be all legally collected foreign intelligence,” he told reporters during a Wednesday press conference on Capitol Hill. “It was all normal foreign surveillance.”

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Bill Holter’s Commentary

This guy obviously ate too many tainted spuds!

Posted at 10:15 AM (CST) by & filed under Jim's Mailbox.

Yes Wolfgang correct, the Fed will be the buyer of last and only resort.

Bill

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Bill,

Sometimes Central Bank actions defy reasoning. In this case it’s raising interest rates in the face of an economic environment that’s on life support.

Lowering rates to ramp up bond prices has been the tempting feature of Fed policy for the past decade. This game has now run its course and the market knows this. Now they will raise rates in an attempt to draw buyers. A closer look at the underlying situation reveals their rationale.

We are all aware of the continual unloading of U.S. Treasuries by Central Banks throughout the world, especially China and Russia . This movement is gaining traction and will not end soon.

Someone has to pick up the slack. It certainly won’t be any funds or trading houses, as the run in yields toward zero has achieved its objective and the only real direction now is backtracking towards “normalization.”

Therefore, it’s up to the Fed to support its own paper. The way they do this is to raise rates and make US paper more competitive with foreign paper, as well as tempt the funds to move away from rich dividend equities and back into government paper. But at a cost….equity market turbulence.

“That said, a 3% Fed Funds rate would also lead to steep selloff in risk assets as the dividend yield on the S&P, currently at about 2%, would be about 1% below the risk free rate, leading to a wholesale “great rotation” out of stocks.”

Sure, the economy (the public) will draw the short straw with these actions, as they will promote a deeper slide into our recessionary environment. Higher rates will stifle growth. Quite simple.

“We could certainly debate why this expansion is already longer than normal, but strong growth is clearly not the reason. In fact, quite the opposite – a lackluster economic backdrop for years, leading to massive central bank support,has likely kept the cycle going more than anything else.”

There is, however, another option. And that may come to be their only option very soon. Printing fiat currency.

Print to repurchase debt and flood the landscape with green. Green paper that is!

When push comes to shove has the Fed ever really cared about the public? It’s always about corporate “care packages” at any cost. Always was, always will be.

CIGA Wolfgang Rech

Morgan Stanley: “Only One Thing Will Allow Central Banks To Keep The Party Going
March 19, 2017

Last week, we presented readers with the latest note from SocGen strategist. Albert Edwards, who explained why after so many years of false rate hike starts, the market not only responded to last week’s hike in a dovish manner – interpreting last Wednesday’s 0.25% hike as a 0.25% rate cut- but as Goldman Sachs showed previously, the dovish reaction was one of the strongest ones since the financial crisis, in other words: “the market no longer believes the Fed.” This is what Edwards said, citing his FX colleague Kit Juckes:

[T]he Fed’s reluctance to send an aggressive tightening signal, instead preferring to again shuffle upwards its dots just slightly, has disappointed markets. But to be fair, the problem isn’t really with the famous dots. It’s with the market, which just doesn’t believe the Fed will tighten as fast as they say they plan to (see left-hand chart below). If the market took the FOMC at their word and discounted a 3% Fed Funds rate at the end of 2019 and beyond, then we’d probably have a 3% nominal 10-year Treasury yield by now.”

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That said, a 3% Fed Funds rate would also lead to steep selloff in risk assets as the dividend yield on the S&P, currently at about 2%, would be about 1% below the risk free rate, leading to a wholesale “great rotation” out of stocks.

More…

Posted at 12:59 PM (CST) by & filed under In The News.

Bill Holter’s Commentary

Maybe they would have had better odds playing “Russian roulette”? As a side note, I searched for other sources on this topic via Bing and Yahoo. The entire first page on Yahoo were of articles claiming these 8 Russians ALL had ties to President Trump. Bing was even worse, their first two pages were filled with similar articles claiming ties to Mr. Trump. I wonder how this will square in the next week or two as the DNC back peddles and admits there is not nor has been a “Trump/Russia” connection? True information is becoming very difficult to obtain, “they” are coming for your mind …DO NOT LET THEM have it!

Another Senior Russian Official Has Died
March 19, 2017

Since the day of Donald Trump’s election, high-ranking Russian officials have been dropping like flies and today’s reports that a top official of Russia’s space agency has been found dead brings the total to eight.

As we noted previously, six Russian diplomats have died in the last 3 months – all but one died on foreign soil. Some were shot, while other causes of death are unknown. Note that a few deaths have been labeled “heart attacks” or “brief illnesses.”

1. You probably remember Russia’s Ambassador to Turkey, Andrei Karlov — he was assassinated by a police officer at a photo exhibit in Ankara on December 19.

2. On the same day, another diplomat, Peter Polshikov, was shot dead in his Moscow apartment. The gun was found under the bathroom sink but the circumstances of the death were under investigation. Polshikov served as a senior figure in the Latin American department of the Foreign Ministry.

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Bill Holter’s Commentary

Please refer to our latest subscription article “Credit Impulse”. Credit creation is no longer growing, not a problem in a system built on equity …a HUGE problem however for one built on debt!

Bank Loan Creation Crashes At Fastest Pace Since The Financial Crisis
March 19, 2017

Last weekend, after looking at the latest H.8 statement by the Fed, we noted something concerning: total loans and leases by U.S. commercial banks were rising at an annual pace of about 4.6%, based on weekly Fed data. That is down from a 6.4% pace for all of last year and peak rates of around 8% in mid-2016. This is the slowest pace of debt creation since the spring of 2014. This deceleration has prompted numerous questions about the sustainability of the recovery, and led the WSJ to noted that the slowdown, “is at odds with the idea of a stronger economy and rising sentiment.”

But the slowdown was especially acute in the all important for growth Commercial and Industrial loan category, which after growing at a pace of 10% in the first half of 2016, had unexpectedly slowed to just 4.0%, nearly 50% lower than the 7% growth notched at the start of the year. This was the lowest pace of loan growth since July of 2011.

Fast forward one week, when after the latest update to the Fed’s latest weekly commercial bank loan data, we find that the trends have deteriorated substantially.

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Jim Sinclair’s Commentary

“Has the Federal Reserve Gone Completely Insane?” The simple answer to this question is YES!

12 Reasons Why The Fed Just Made The Biggest Economic Mistake Since The Last Financial Crisis
March 19, 2017

Has the Federal Reserve gone completely insane? On Wednesday, the Fed raised interest rates for the second time in three months, and it signaled that more rate hikes are coming in the months ahead. When the Federal Reserve lowers interest rates, it becomes less expensive to borrow money and that tends to stimulate more economic activity. But when the Federal Reserve raises rates , that makes it more expensive to borrow money and that tends to slow down economic activity. So why in the world is the Fed raising rates when the U.S. economy is already showing signs of slowing down dramatically? The following are 12 reasons why the Federal Reserve may have just made the biggest economic mistake since the last financial crisis…

#1 Just hours before the Fed announced this rate hike, the Federal Reserve Bank of Atlanta’s projection for U.S. GDP growth in the first quarter fell to just 0.9 percent. If that projection turns out to be accurate, this will be the weakest quarter of economic growth during which rates were hiked in 37 years.

#2 The flow of credit is more critical to our economy than ever before, and higher rates will mean higher interest payments on adjustable rate mortgages, auto loans and credit card debt. Needless to say, this is going to slow the economy down substantially…

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