Posted at 9:59 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

If the nature of these assets was made public, the weakness now in the Federal Reserve Balance Sheet would be immediately obvious. The dollar would implode immediately and treasury instruments would have to be downgraded. It also would reveal those entities who are the near and dear of the Fed.

Fed Defies Transparency Aim in Refusal to Disclose
By Mark Pittman, Bob Ivry and Alison Fitzgerald

Nov. 10 (Bloomberg) — The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

“The collateral is not being adequately disclosed, and that’s a big problem,” said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. “In a liquid market, this wouldn’t matter, but we’re not. The market is very nervous and very thin.”

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

More…

 

Jim Sinclair’s Commentary

Before all this is over you will see continuing and major bullion purchases by central banks. To hell with standing agreements.

ECB-Gold reserves rise by 1 mln euros in week
Tue, Nov 11 2008, 14:27 GMT

FRANKFURT, Nov 11 (Reuters) – Gold and gold receivables held by euro zone central banks rose by 1 million euros to 220.193 billion euros in the week ending Nov. 7, the European Central Bank said on Tuesday.

Net foreign exchange reserves in the Eurosystem of central banks rose by 22.8 billion euros to 361.1 billion euros, the ECB said in its regular weekly consolidated financial statement.

Gold holdings rose mainly as a result of purchases by 1 euro zone central banks, and this was consistent with the 2004 Central Bank Gold Agreement, the ECB said.

More…

Posted at 1:37 PM (CST) by & filed under Jim's Mailbox.

Jim,

"Colin Powell has made bizarre comments that echo the recent declaration by Democratic VP candidate Joe Biden that there will be an “international crisis” early into Barack Obama’s presidency that will test the new president by forcing him to make unpopular decisions.

Speaking on meet the press two days ago, Powell officially endorsed Obama and also made the following statement:

“The problems will always be there and there’s going to be a crisis which will come along on the 21st, 22nd of January that we don’t even know about right now.”"

More… 

I have heard the stories about riot troops being brought into the U.S. , not for release but for active duty here.

I suppose they could’ve been speaking hypothetically, especially with regard to the specific dates given. But thinking further about it, we may conclude that whatever unpopular actions Obama has to take, it would be more politically "correct" to do them quickly, especially because if it is early enough he would be able to justify these drastic actions by trying to correct the catastrophic financial and economical situation the Bush administration has created.

Regards,
Christopher

Jim,

I guess prosecution is out of the question. Perhaps a citizens should attend to the needful. If this, along with everything else, is not guilt beyond reasonable doubt, I don’t know what is.

CIGA Pedro

A Quiet Windfall for US Banks
Monday 10 November 2008
by: Amit R. Paley, The Washington Post

"With attention on bailout debate, Treasury made change to tax policy.

The financial world was fixated on Capitol Hill as Congress battled over the Bush administration’s request for a $700 billion bailout of the banking industry. In the midst of this late-September drama, the Treasury Department issued a five-sentence notice that attracted almost no public attention.

But corporate tax lawyers quickly realized the enormous implications of the document: Administration officials had just given American banks a windfall of as much as $140 billion…

"Did the Treasury Department have the authority to do this? I think almost every tax expert would agree that the answer is no," said George K. Yin, the former chief of staff of the Joint Committee on Taxation, the nonpartisan congressional authority on taxes. "

More…

Posted at 1:24 PM (CST) by & filed under General Editorial.

Dear Friends,

Gold is a currency. Gold is not a commodity. It has always been so. It will always remain so. That will once again be proven an axiom when you look back at this period in time.

Do not throw away your insurance. Protect yourself by distancing yourself from your financial agents. Take delivery of paper shares or become a direct registration book entry at the transfer agent.

If you can afford to, take delivery of both gold and silver from the COMEX.

Now your insurance companies are major risks as they have been gambling in OTC derivatives.

Respectfully yours,
Jim

Posted at 8:25 PM (CST) by & filed under General Editorial.

Dear Lie-bor,

We all want to thank you for your excellent demonstration of duty performed for the financial public welfare and donor central banks.

However you might just be pushing a tad too far. It is clear that you are dropping rates so consistently and significantly you intend to go below zero before next Wednesday.

We all know that your quoted rates are your published rates on loans of under $10USD fully backed by $20USD for a term of 12 hours.

Maybe a one day pop up of one basis point would give the entire process some credibility?

Sincerely,
Jim

Posted at 7:46 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Tax expatriation is the renunciation of US citizenship deemed by the IRS as a move to escape US taxation. You think the US IRS would deem otherwise?

Many of you have called and emailed concerning the subject. The general opinion seems to be that my comment was incorrect. Before making judgments on the subject and the impending changes to the act of 1995 based on, as all things seem to be, 9/11 (to become effective 01/1/09), please consult the following:

Taxation Expatriation: Will the Fast Act Stop Wealthy Americans From Leaving The United States?
by BG Cantley

File Format: PDF/Adobe Acrobat

(A) any United States citizen who relinquishes citizenship, and …… The individual expatriate proposal would replace current law on a prospective …

More…

Posted at 3:31 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Herbert and Bunker, where are you when we need you?

Maybe Chung Phat and Dr. No would be interested.

Taking Delivery of Silver and Gold from the COMEX Warehouse Into Personal Custody:

If you are tired TODAY of being had by paper gold the following is the only course of action that takes a positive step to end the games being played at your expense.

Delivery Process for Gold or Silver:

Delivery – Prudential holds the receipt in PFG’s account for customer

  1. 1. Client buys the futures contract.
    2. Client will take delivery between First Notice Day and the Last Trading Day.
    3. On delivery day account is debited cost plus a $50.00 delivery fee.
    4. Receipt is booked to customers account
    5. Monthly storage charge passed on to customer’s account(about $50.00).

Physical Delivery – Customer wants bars in their procession

1. Client buys the futures contract.
2. Client will take delivery between First Notice Day and the Last Trading Day.
3. On delivery day account is debited cost plus a $50.00 delivery fee.
4. We will provide the customer with name and phone number of the individual at the depository to contact.
5. Customer makes arrangements for the physical delivery

CIGA JB Slear, who is in the commodity business, offers his services to assist anyone seeking physical delivery of metals. He will guide you through the entire process, including arrangements for delivery.

To be totally clear, I expect JB not to discuss any type of speculation with you but ONLY help you acquire 100 ounce gold bars. Once 21,000 bars have been taken the paper gold’s reign over the price of gold is over.

CIGA JB Slear can be reached at the following:

Fort Wealth Trading Co. LLC
www.FortWealth.com
866-443-0868
ext 104

Posted at 3:24 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

The Queen of England does not look happy. Are we entering the perp walk phase of the derivative meltdown?

Ciga Ken

Queen baffled at delay in spotting credit crunch
November 6, 2008 – 8:41AM

Queenie

Queen Elizabeth has been given an academic briefing on the origins of the credit crunch and wound up the "lesson" by asking why nobody had seen the crisis coming.

The 82-year-old monarch had the complexities of the current global financial crisis explained to her during the inauguration of a new building at the renowned London School of Economics (LSE).

The origins and effects of the crisis were explained to her by Professor Luis Garicano, director of research at the LSE’s management department, the Press Association reported.

Prof Garicano said afterwards: "The Queen asked me: ‘If these things were so large, how come everyone missed them? Why did nobody notice it’?"

When Garicano explained that at "every stage, someone was relying on somebody else and everyone thought they were doing the right thing", she commented: "Awful."

More…

Dear Ken,

The reason it will probably not happen is because you would have to arrest every international investment bank in the entire world, all their clients and half of both of their staff. After that the Federal Reserve would arrest past Chairmen followed by the Fed arresting itself.

The way the perp walk might happen is if someone really angry who has no clue how pervasive the OTC derivative scam is, like the Queen, demanded a criminal investigation by non-financial incorruptible criminal judges.

Who knows, it could happen.

Regards,
Jim

Dear Mr. Sinclair,

I decided to visit Bloomberg.com this morning to review the market news. Here is what I found. This appears very ugly for the US dollar and wildly bullish for gold.

CIGA Marc

AIG Bailout Swells to $150 Billion as Insurer Reports Fourth Straight Loss
U.S. Stock Futures Rise on China Stimulus Plan, G-20 Call for Lower Rates
Fannie Mae Posts Record $29 Billion Quarterly Loss After Asset Writedowns
Gendell, Scholes Are Losers as Hedge Funds Slide for Fifth Straight Month
Believing in Estimates Means S&P 500 Rallies Record 20% Before 2008 Closes
Circuit City Files for Bankruptcy Amid Competition From Best Buy, Wal-Mart
Deutsche Post Will Eliminate 9,500 More Jobs in U.S., Scale Back DHL Unit
Fed Refuses to Identify Recipients of $2 Trillion Emergency Loans to Banks
Russia Probes Nuclear Submarine Accident in Pacific That Killed 20 People

Dear Marc,

Yes, this and much more is coming at the technical money flow that has created this bear market dollar rally.

Regards,
Jim