Posted at 11:17 AM (CST) by & filed under Jim's Mailbox.

Gotta say, CIGAs certainly have a sense of humor!

Bill

Hey, it might not look like much, but this baby weighs 8133 tons! Honest…

CIGA Les

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Courtesy of CIGA JB. As we have tried to warn, business ceases once credit is pulled…

Jim

Sears Death Spiral Accelerates: Vendors Halt Shipments As Cost Of Default Insurance Soars
August 25, 2017

When we commented back in March on the unexpected “going concern” notice in Sears’ 10-K which sent the stock crashing, we pointed out the immediate spin provided by Eddie Lampert’s distressed retailer which promised that its comeback plan may help alleviate the concerns, “satisfying our estimated liquidity needs 12 months from the issuance of the financial statements”, to which however we added the footnote that “the question is what happens when vendors start demanding cash on delivery as concerns about SHLD.’s liquidity concerns continue to grow.”

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When we commented back in March on the unexpected “going concern” notice in Sears’ 10-K which sent the stock crashing, we pointed out the immediate spin provided by Eddie Lampert’s distressed retailer which promised that its comeback plan may help alleviate the concerns, “satisfying our estimated liquidity needs 12 months from the issuance of the financial statements”, to which however we added the footnote that “the question is what happens when vendors start demanding cash on delivery as concerns about SHLD.’s liquidity concerns continue to grow.”

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Dismal Dave with the absolute truth.

Bill

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US Gross National Debt to Spike by $800 Billion in October?

August 21, 2017

The other option: too ugly to even imagine.

“There is zero chance, no chance we won’t raise the debt ceiling,” swore Senate Majority Leader Mitch McConnell (R., Ky.) at an event in Louisville, Kentucky, on Monday.

He who couldn’t get his Republican ducks all lined up in a row to get any major legislation passed this year was confident that the Senate would pass a bill that would raise the debt ceiling so that the government could continue to pay for things that Congress told the Government to pay for, and so that the government could service its debts, rather than default on them.

Treasury Secretary Steven Mnuchin was there with him, pleading once again for a “clean” debt-ceiling increase, according to the Wall Street Journal. His “magic super Treasury powers” that allow the government to conserve cash to avoid having to issue more debt will expire at the end of September, he said.

“This is not about spending money,” he said. “This is about paying for what we’ve spent, and we cannot put the credit of the United States on the line.”

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Posted at 10:51 AM (CST) by & filed under Jim's Mailbox.

…”Affordable Care Act was passed under false pretenses, even boasting that “the stupidity of the American voter” made the grand deception possible.”

CIGA JB

Obamacare ‘Architect’ Settles Suit Over Fraud Allegations
August 24, 2017

Jonathan Gruber, the MIT professor who has been dubbed the architect of Obamacare, has settled a lawsuit accusing him of filing fraudulent claims for government payments.

According to the settlement agreement, Gruber’s allegedly fraudulent claims date back to 2014, when the economics professor was hired by the State of Vermont to conduct research and economic modeling “relating to the implementation of Vermont’s single-payer healthcare system.”

Gruber rose to notoriety in late 2014 when video footage surfaced showing him admitting that the Affordable Care Act was passed under false pretenses, even boasting that “the stupidity of the American voter” made the grand deception possible.

The settlement notes that in two of the submitted invoices, Gruber documented that his “research assistants” worked for 500 hours at a rate of $100 an hour.

In total, the documents claimed that the assistants conducted $50,000 worth of work for each invoice period, but according to the settlement, a state investigation determined that Gruber only had “a single research assistant” during that period, who could not have completed all the stated work hours alone.

“Thus for the invoices to be accurate—that research assistant must have worked almost 12 hours a day for the first period and 16 2⁄3 hours a day for the second period,” the investigators pointed out, concluding that “Dr. Gruber’s February 18, 2015, ‘documentation’ of the research assistant’s hours did not reflect the actual hours worked by the research assistant.”

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What isn’t fake in today’s world? Courtesy of CIGA JB.

Bill

Google Issuing Refunds to Advertisers Over Fake Traffic, Plans New Safeguard
August 25, 2017

Alphabet Inc.’s GOOGL -0.31% Google is issuing refunds to advertisers for ads bought through its platform that ran on sites with fake traffic, people familiar with the situation said, as the company develops a tool to give buyers more transparency about their purchases.

In the past few weeks, Google has informed hundreds of marketers and ad agency partners about the issue with invalid traffic, known in the industry as “ad fraud.” The ads were bought using the company’s DoubleClick Bid Manager.

Google’s refunds amount to only a fraction of the total ad spending served to invalid traffic, which has left some advertising executives unsatisfied, the people familiar with the situation said. Google has offered to repay its “platform fee,” which ad buyers said typically ranges from about 7% to 10% of the total ad buy.

The company says this is appropriate, because it doesn’t control the rest of the money. Typically, advertisers use DoubleClick Bid Manager to target audiences across vast numbers of websites in seconds by connecting to dozens of online ad exchanges, marketplaces that connect buyers and publishers through real-time auctions.

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If you had knowledge that the US military was (because of a huge and sudden gap in technology) no longer the strongest military on the planet, exactly what would keep the dollar from going to its long – long term, low of .56?

Jim

Watch the USDollar index. If we go below the 92.50-92.00 level, you can kiss goodbye to the US dollar with all its consequences.

CIGA GG

92.502 USD

0.775

0.83%

As of 3:50 PM EDT 8/25/2017

OPEN 93.292 DAY RANGE 92.424-93.440 PREVIOUS CLOSE 93.277

52WK RANGE 92.424 – 103.820 YTD RETURN -9.50%

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Posted at 10:29 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

This is a problem for the Fed. It is easy to counterfeit gold and silver but not these.

The Base Metal Breakout – Industrial Commodities Threaten Their Decade-Long Downtrend
August 24, 2017

Summary:

* Base metals are showing signs of real strength, with prices across the complex breaking out, or threatening to do so.

* Copper and zinc have looked the strongest of the bunch and both have recently broke out of multi-month consolidation patterns.

* The moves we are seeing have the hallmarks of a supply (destruction) driven rally, which tend to be sharp and ferocious in nature.

* An industry-wide decline in reserve quantity (depletion) and quality (grade), accompanied with a complete lack of new discoveries means we believe we’re likely to see an increase in M&A as prices begin to rise, which is why we’re interested in quality exploration and development stage plays.

Every now and then you get a feeling that the market is sending a message. Last week was one of those weeks as we witnessed a whole host of commodities either breaking out of multi-month consolidation patterns, or seriously threatening to do so.

The topside moves were generally spread across the commodity complex, but by far the most significant moves were seen in the base metals where we witnessed breakouts across the board, some in rather spectacular fashion.

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Bill Holter’s Commentary

CEO Jim Murren made the announcement in a letter, saying he felt compelled to speak out against “the degradation of basic human dignity”

OK so I have to ask, according to these whack jobs, if you are a non Muslim or especially a woman…aren’t your basic human rights supposed to be degraded up to and including death? Sorry, but MGM Resorts Intl. cannot go out of business fast enough as far as I am concerned.

MGM Resorts International to match employee donations to terror-listed Islamic group
August 24, 2017

LAS VEGAS (AP) — One of the largest employers in Nevada is launching a donation match program benefiting civil rights organizations in light of the deadly Charlottesville protests.

MGM Resorts International, the largest casino operator on the Las Vegas Strip, said Friday that it would match employee donations made to the Southern Poverty Law Center, NAACP, Anti-Defamation League, Human Rights Campaign, Council on American Islamic Relations, OCA National-Asian Pacific American Advocates and League of United Latin American Citizens.

CEO Jim Murren made the announcement in a letter, saying he felt compelled to speak out against “the degradation of basic human dignity” following the deadly attacks in Charlottesville and Barcelona in recent days.

He said the company champions diversity and inclusion. Murren said MGM believes in free speech but that it would not tolerate hate.

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Jim Sinclair’s Commentary

Mr. Williams kindly shares the real numbers with us.

– Faltering Economic Activity and Intensifying Political Discord Continue to Peril the Dollar and to Intensify Risks of Market Turmoil
– Better-Quality Reporting than Gimmicked GDP and Employment Shows No Full Recovery from the Economic Collapse, No Economic Expansion, with Real Business Activity Increasingly Stagnant or in Renewed Downturn
– Net of Headline Inflation and Gyrations in Commercial-Aircraft Orders, New Orders Were Down by 9.3% (-9.3%) from Their Non-Recovered, Pre-Recession Peak
– Offering Some Caution for Booming Headline Retail Sales, Motor Vehicle Orders and Shipments Declined in June and July
– Housing and Construction Activity Continued In Deepening Contraction; Six-Month Smoothed Trends All Have Turned Down
– New- and Existing-Home Sales Fell in July, into Third-Quarter 2017, Having Contracted in Second-Quarter 2017
– July Existing-Home Sales Were Down by 25.2% (-25.2%) and New-Home Sales Were Down by 58.9% (-58.9%) from Pre-Recession Peaks
– Parallel Monthly and Quarterly Declines Were Seen Recently in July Building Permits and Housing Starts, Respectively Also Down by 46.0% (-46.0%) and by 49.2% (-49.2%) from Pre-Recession Highs

“No. 906: July New Orders for Durable Goods, New- and Existing-Home Sales”

www.shadowstats.com

Student Group Says USC’s White Horse Mascot Is a Racist Symbol
August 25, 2017

Some students are claiming USC’s longtime mascot, a white horse, is a racist symbol.

The horse is named Traveler, which was also the name of Confederate Gen. Robert E. Lee’s horse. The name was called out recently by a leader of the USC Black Student Assembly at a rally following the Charlottesville riots.

The Los Angeles Times reported:

At the rally, according to the student newspaper the Daily Trojan, Saphia Jackson, co-director of the USC Black Student Assembly, asked students not to be quiet, and reminded that “white supremacy hits close to home” and referenced the name of the Trojans mascot.

The Black Student Assembly did not respond to requests for comment, but questions about the name’s provenance have increased on social media in the midst of the national discussion on race.

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Posted at 10:11 AM (CST) by & filed under Bill Holter.

10,000 contracts (50 million ounces) in two minutes is what took silver from positive to negative.
And 20,705 contracts (2,075,000 ounces) in gold in 1 minute is what flash crashed the metals. Something must be on fire behind the scenes, no one would sell metal like this on the cusp of a breakout…unless they did not want it to break out?

Bill

Posted at 1:06 PM (CST) by & filed under In The News.

Bill Holter’s Commentary

So Jim Rickards says he has seen no proof the gold is gone and seen “proof” the gold IS in Ft. Knox. If this is the case, PLEASE SHOW US THE PROOF! Funny he mentions Eric Sprott in this article. Eric and I met Jim Rickards in London at the GATA conference in August 2011. He was adamant the Treasury would mark gold up to $10,000. I asked him in front of a dozen people if he knew there had not been an audit of the gold since the 1950’s? He tipped his head and said, “Really, I was not aware of that”? I saw his reaction with my own eyes, he had no idea there had been no audit. Afterwards, Eric said to me “if he doesn’t know there has not been an audit since the 1950’s, what else doesn’t he know?”

Let me say this, “if” Mr. Rickards is truly “ex CIA” then I believe he is using their playbook by giving 90% truth with a “hook” in there. The “HOOK” being the gold is there! I also believe “ex CIA” is about as common as “ex mafia”… As for the gold, seeing it has been delivered internationally for over 20 years and demand has exceeded mine+scrap supply during this time period …it had to come from “somewhere”. That “Somewhere” can only be from places where it once existed …Western vaults! Please show us your proof Mr. Rickards!!!

The Truth About the Fort Knox Gold
August 23, 2017

One of the little-known items on the Fed’s balance sheet is a vital asset it received from the U.S. Treasury a long time ago…

During the Great Depression, in 1933, President Roosevelt issued an executive order requiring anyone with gold to surrender it to a Federal Reserve bank or any member bank of the Federal Reserve system.

The Federal Reserve banks also required the commercial banks to hand over their gold to the Fed. Now, suddenly, the gold went out of the commercial banks into the Federal Reserve Bank.

But under the Gold Reserve Act of 1934, the Fed was ordered to surrender all its gold to the Treasury Department. All the nation’s gold in effect came under direct government ownership.

Now, this is key: The Federal Reserve is actually a private system, while the Treasury is an arm of the U.S. government. And the Fifth Amendment of the Constitution prevents the government from taking private property without just compensation.

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Posted at 1:02 PM (CST) by & filed under Jim's Mailbox.

This gets more complex by the day. The swamp is now overflowing.

EXCLUSIVE: White House Fingers Mitch McConnell As Media Leak; Believes GOP Leader Divulged Sensitive Intelligence on Trump
August 24, 2017

The White House is accusing Senate Majority Leader Mitch McConnell of waging a clandestine smear campaign against President Donald Trump, leaking sensitive internal communications shared with the President to the New York Times and possibly other media, according to administration officials.

“The President knows exactly what the senator (McConnell) has done,” a White House official said. “And the President will address this in his own way. Privately.”

The honeymoon — if you can call it that — appears to be officially over for the GOP leaders. And that might be a very bad thing for McConnell whose popularity is sliding in his home state of Kentucky.

According to White House insiders, President Trump was furious when the New York Times published a long hit piece on the president’s growing feud with McConnell. The piece included detailed communications between Trump and McConnell that, according to White House sources, were almost verbatim. Moreover, it is believe the article was timed to try to steal some of Trump’s thunder from his Monday night address to the nation on military plans in Afghanistan, officials said.

At a time when Trump should have been celebrating his speech from Tuesday night in Arizona — which likewise was well received by supporters — the mood on Wednesday was tamped down by the realization that the GOP leader had ratted out and betrayed the GOP President of the United States to the house organ publication of the Democratic party: The New York Times.

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They are only “short”: dollars which can easily be printed. The question is this; what will these dollars be worth once they are printed? …and markets tend to discount the future.

They’re Using Bernie Madoff Math to Hide a Crisis
August 23, 2017

Politicians are always generous with other people’s money… until it runs out.

Near the peak of the late-’90s tech bubble, California’s legislature passed the largest pension increase in its history.

Today, with as much as $750 billion in unfunded public pension debt, California has one of the worst pension situations in the country. But it’s far from alone.

Illinois has a staggering $250 billion in unfunded pension obligations. State pension plans in Connecticut, Pennsylvania, New Jersey, and many other states are taking on water, too.

Unfunded public pension liabilities in the US have surpassed $5 trillion.

Taxpayers Are Stuck With the Bill

There used to be a simple formula for a secure retirement. American workers would work for a big company for decades. Then, at a certain age, they were eligible for a monthly pension check… for life.

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CIGA JB

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This may be the case GG but I have just one question; when the markets crash …who will still be solvent and able to pay out on this “crash insurance”?

Bill

The Cost Of Market Crash Insurance Just Hit A Record High
August 24, 2017

With the VIX surging, and then quickly getting pummeled on two occasions in the past three weeks, dizzy traders could be forgiven to assume that any latent “risk off” threat, whether from North Korea or the US political front, has been taken off the table. However, a deeper look inside the vol surface reveals something very different: with increasingly more analysts and traders warning that volatility is set for a sharp return this fall, equities have already been adjusting to the increased probability of a “tail event.” However, instead of buying VIX futures, call or ETPs, they have been doing so by bidding up the price of OTM equity put options, or equivalently, by steepening the S&P 500 put skew and.

As a reminder, a put skew shows how much more expensive it is to buy deep OTM puts vs puts that are in the money or in other words, a levered bet on (or hedge against) a market crash.

And as the following chart from Bank of America shows, the S&P put skew is now at the highest level on record, making the relative price of tail hedges the highest in 13 years as traders are quietly bracing for a sharp market crash.

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Bill,

True that was the reason there was the emergency payment to rescue AIG because AIG has issued so many credit default swaps because they never believed the market would crash. And if they couldn’t make full on their promises the card house would have collapsed.This is the example of counter-party risk. The difference this time is that if and when the FED/treasury will come to the “rescue” the currency’s pp purchasing power or the US dollar will fall dramatically. The devaluation of the currency in the end is the ultimate counter party risk because when you can’t buy anything anymore with your currency it means that the base the anchor of the financial system on which everything is based has lost its value and credibility hence why at that time gold and silver will go haywire. And remember silver is cosmetically cheap and will outpace the rise in the gold price with many factors. Next to that silver has not been confiscated as far as I know.

The next crisis is all about counter party risk!

Best,

G

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JB, you’re killing me! Where is the one of the statue peeing on someone?
Bill

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In the end, this is only paper. It will all be worth zero when the “show me the money” moment comes!

Bill

God help us, please!

CIGA JB

U.S. Banks Precious Metals Derivative Exposure Surged In The Beginning Of 2017

August 23, 2017

According to the most recent report on the U.S. Financial Institutions Derivatives trading activity, the U.S. banks held a record amount of precious metals contracts in the first quarter of 2017. Not only did the U.S. banks report a record amount of precious metals contracts, but they also held an unprecedented quantity in notional value of commodity and equity derivative contracts.

There just seems to be a lot of paper floating around in our highly inflated stock, bond, and Forex markets. And… there needs to be. Without an ever increasing amount of leverage via their derivative bets and hedging, these markets would be in serious trouble. Furthermore, the practice of using contracts to hedge bets upon on other derivative bets has put the financial market in a highly fragile state.

The Office of the Comptroller of the Currency (OCC) put out its First Quarter 2017 Quarterly Report on Bank Trading and Derivative Activities. In that report, they published the following chart on the U.S. Banks’ notional value in precious metals contracts:

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Posted at 10:54 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

History does rhyme…and as bad as Rome was, we are taking the effort to rewrite history to an all new level of ignorance.

Americans Channel Ancient Rome In Condemning Confederate Statues
August 23, 2017

The ancient Romans loved to destroy statues almost as much as they loved to admire them. Americans may be following in their footsteps as we decide whether to celebrate, destroy or relocate Confederate statues. The campus where I work, The University of Texas at Austin, is wrestling with this very question.

After an unpopular leader died, the Romans were known to vandalize the leader’s monuments, likenesses or even property. The practice occurred so often that historians came up with a name for it: damnatio memoriae. Translated literally, it means “condemnation of memory/legacy.”

The term encompasses a variety of acts, from outright destruction to literal defacement: sculptors would sometimes chip away at the likeness of a deposed leader until it resembled the new one. Whether this was done to save money on expensive marble, or as a silent signal to the new leader that his own face could be just as easily replaced, remains a matter of debate.

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Bill Holter’s Commentary

Quite an elite club wouldn’t you say?

“In the past 10-years, the early warning has been issued in Burundi, Iraq, Ivory Coast, Kyrgyzstan and Nigeria.”

I would say, pretty obvious we are a divided nation and evidenced by the intelligent half “prepping” …but what do we know? As a side note, there is humor in the word “potential”!

Quite an elite club wouldn’t you say?

“In the past 10-years, the early warning has been issued in Burundi, Iraq, Ivory Coast, Kyrgyzstan and Nigeria.”

United Nations Issues Rare “Early Warning” – Signals Potential Civil Conflict In America
August 23, 2017

As StockBoardAsset.com notes, this rare signal often preludes the potential for civil conflict.

In the past 10-years, the early warning has been issued in Burundi, Iraq, Ivory Coast, Kyrgyzstan and Nigeria.

The United Nations Committee on the Eliminations of Racial Discrimination has called on high-level politicians and public officials of the United States to condemn “racist hate speech and crimes in Charlottesville and through the country”.

Anastasia Crickley, Chairperson of UN Committee on the Elimination of Racial Discrimination (CERD) said:

We are alarmed by the racist demonstrations, with overtly racist slogans, chants and salutes by white nationalists, neo-Nazis, and the Ku Klux Klan, promoting white supremacy and inciting racial discrimination and hatred

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