Dear CIGAs,
The implications of China paying for Iranian oil in gold is the most important event in the modern history of gold
1. It is reasonable to assume that China has been threatened with
total or at least selective exclusion from the SWIFT system if it pays
in any currency for Iranian oil.
2. Gold has been decided by China as the means of making payment for massive international purchases free of the SWIFT system.
3. Other Asian and Middle Eastern nations will now see the gold they hold as money free of Western economic interference.
4. Gold now is not only money free of liability, but also free from
interference regarding settlement by the long arm of Western influence.
5. The SWIFT system is becoming ever more a weapon of Western international political will.
6. In case of war anywhere, it is now demonstrated for all to see
that only gold will buy the materials required. Paper currencies are
under the SWIFT system’s control in settlement.
7. Far from being a barbaric relic, gold is now clearly the money of state survival in every sense.
8. It is reasonable and possible for the supply of physical gold to
fall far behind the size of the massive short positions now common to
algorithm and hedge fund paper shorts. That will make an effective cover
at a reasonable price as compared to a certain day’s close impossible
the following day on an exogenous event.
9. It may not be possible to use TA of any nature to determine a
price of overvaluation for gold. Should the USA decide to take on China
in full out economic war with the physical market totally illiquid, such
as through isolation from the SWIFT system, consider the gold price
that might result.
Dear CIGAs,
Gold is officially replacing the US dollar June 28th. The cat is out of the bag.
Phil, you are booting any nation that dares to refuse to be
legislated by any other body than themselves out of the SWIFT system.
You have officially made gold money. Now what are you going to do,
declare economic war on China? They will fire dollars back at you.
You just might end the economic world as you knew it.
The Best Reason in the World to Buy Gold CIGA Eric
Have no doubt, emotions generated by short-term price action will be influencing investor decision-making a hundred years from now. We may have substituted iPad for the telegraph over the past hundred years, but we’re still fairly lousy traders as a species. The real world makes decision based on reality rather than perceptions generated by emotions. Well, at least the real world that stays in business. The Chinese are buying gold while the public panics and sells. Nuf said.
Headline: The Best Reason in the World to Buy Gold
"Beijing is planning to avoid U.S. financial sanctions on Iran by paying for oil with gold. China’s imports of the metal are already large, and you can guess what additional purchases are going to do to prices. On the last day of 2011, President Obama signed the National Defense Authorization Act for Fiscal Year 2012. The NDAA, as it is called, attempts to reduce Iran’s revenue from the sale of petroleum by imposing sanctions on foreign financial institutions conducting transactions with Iranian financial institutions in connection with those sales. This provision, which essentially cuts off sanctioned institutions from the U.S. financial system, takes effect on June 28."
Source: forbes.com
More…
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The Power of a Lobby:
You would be interested to know that the US House of Representatives has approved HR 2682 which appears to reconfirm that the end-user firms are exempt from margin and capital requirements on derivative contracts that they enter into.
What is going to be left of this "sold to the devil" system of lobby to legislation?
Click here to read more on the bill…
Jim Sinclair’s Commentary
It is the first out there, and only a commonwealth. However if you
think this is simply an aberration with no same and similar problems
brewing you are misinformed.
In an apparent first, a public pension plan files for bankruptcy Northern Mariana Islands plan in deep trench, with $268M in assets, $911M in liabilities By Darla Mercado
April 19, 2012 3:37 pm ET
In what’s believed to be a first by a public pension plan, the Northern Mariana Islands Retirement Fund filed for Chapter 11 bankruptcy protection on Tuesday.
The public defined-benefit plan is in a big hole. At the moment, it’s only 38.8% funded, thanks to low investment returns and a benefit structure that’s been increased without raises in funding, according to the bankruptcy filing in the U.S. District Court for the Northern Mariana Islands, a U.S. commonwealth consisting of three major islands in the Western Pacific.
Currently, the fund holds $268.4 million in assets, yet faces a staggering $911 million in liabilities. Last year alone, it paid $76 million in retirement benefits, health and life insurance claims and lump-sum death payments.
Marcia Wagner, managing director at The Wagner Law Group, believes that this is the first time a public pension plan has filed for bankruptcy. Notably, this is a restructuring of the fund and not a liquidation, which would be under the jurisdiction of Chapter 7 of the U.S. Bankruptcy Code.
The development of the restructuring will set a precedent, particularly at a time when local government budgets and defined-benefit plans are under strain.
“If it were a private pension plan, the [Pension Benefit Guaranty Corp.] could take it over,” Ms. Wagner said. “But with a public plan, the question is: What happens to the plan participants?”
More…
Jim Sinclair’s Commentary
This is what MOPE has communicated in the assumption that the Fed has
the time, and privilege to watch economic statistics for a few months
before deciding on the level and means of stimulation, if any. Below is
an illustration of what MOPE, which controls the media, has communicated
to many. That is total BS. It is pure psychic-opts at its best.
Jim Sinclair’s Commentary
Austerity changes governments.
Dutch Prime Minister, Cabinet Resign THE HAGUE, Netherlands April 23, 2012 (AP)
The Dutch government information service says that Prime Minister Mark Rutte and his Cabinet have resigned after failing to reach agreement on reducing the country’s budget to meet European guidelines.
The information service said Monday that Rutte had met with Queen Beatrix and she had accepted his resignation, asking him to tend to pressing matters of state with a caretaker government for the time being.
Rutte is due to address parliament Tuesday afternoon to discuss interim budget cuts and schedule new elections.
More…
Jim Sinclair’s Commentary
QE to infinity, as there is no other choice.
Spain’s economy plunges into recession Posted: 23 April 2012 1712 hrs
MADRID – Spain’s jobs-scarce economy plunged back into recession in the first quarter of 2012 as employment slumped even further, the Bank of Spain said Monday.
Barely two years after emerging from the last downturn, Spain slid into recession again with two consecutive quarters of economic contraction, the central bank said in a report.
Gross domestic product fell by an estimated 0.4-percent in the first quarter of 2012 after a 0.3-percent decline in the last three months of 2011, the bank said.
Spain, whose unemployment rate at the end of 2011 was already the highest in the industrialised world at 22.85 percent overall and nearly 50 percent for the young, suffered a further sharp jobs decline.
"Employment fell again, sharply, with an estimated year-on-year decline of 4.0 percent," the report said, noting also a "significant" decline in unit labour costs.
More…
Jim Sinclair’s Commentary
The USA to legislate the entire world?
FACTA: US tax authorities want to access data in all banks in the world German SMEs news | 15.04.12, 01:18
Reveal Schwarzgeldkonten US citizens around the world, the American tax authority wants to force all banks to disclose the data of customers from the United States. Should a foreign Institute is cooperating with the US authorities, it should pay whopping penalty tax.
The US tax authority wants to oblige all banks around the world to disclose the data of customers from the United States. So will the authority American citizens around the world locate black money and combat tax evasion. Would this law with a considerable burden for European banks. They fear not only a loss of business customers, they should invest money to set up the appropriate infrastructure.
Should financial institutions be unwilling to give out the data, they would be confronted with significant sanctions. A company is not willing to cooperation, a tax of 30 percent on all US income from financial assets, which recognised the Institute is threatened. This tax is due even if the bank pays the income for the customer’s account.
If the so-called foreign account tax compliance Act, or FACTA, enters into force must all banks either separate from their US customers or announce their data. Legally, this commitment is indeed controversial, but the United States have already signed an agreement with several European countries. In addition to Germany, also France, Spain, Italy and the United Kingdom have consented to implement FACTA. This means that the Europeans agree a far-reaching tax American hegemony.
Still, the design for the global tax treaties can be modified until the end of April.The European financial industry tries hard at during this period the agreement to defuse. Because in its current form it would be linked up to $500 billion cost.However, observers assume that the Europeans can make at most cosmetic changes.Essentially, it seems the train has departed. In the future, the Americans are everywhere around the world have access to the taxable income from U.S. businesses.
More…
Jim,
"The chairman said there was broad consensus on the International Monetary and Financial Committee that it is "critical" for as many advanced economies as possible to return to normal growth levels within two to three years.
"If we don’t get (gross domestic product) back to its potential levels, then fiscal sustainability is not possible either," he said.”
Meaning:
IMF plus Central banks’ firepower (QE to infinity) can be maintained for as long as 2-3 years.
Best regards,
CIGA Christopher
IMF Policy Board Stresses Medium-Term Fiscal Focus, Growth By Ian Talley
WASHINGTON -(Dow Jones)- The International Monetary Fund’s policy board warned against budget cuts in Europe and other rich nations that would starve the growth vital to erasing their massive debt obligations, a senior IMF official said Saturday.
"Everything that we do should be supportive of medium term fiscal consolidation, particularly in advanced economies," said Tharman Shanmugaratnam, chairman of the IMF’s policy-steering committee, after a meeting of the fund’s key finance ministers.
The chairman said there was broad consensus on the International Monetary and Financial Committee that it is "critical" for as many advanced economies as possible to return to normal growth levels within two to three years.
"If we don’t get (gross domestic product) back to its potential levels, then fiscal sustainability is not possible either," he said.
IMF Managing Director Christine Lagarde and other senior fund officials this week warned against further near-term deficit cuts in Spain and Italy beyond what has already been announced. Instead, the governments need to build credibility with markets by implementing proposed plans with discipline and outlining tough deficit cuts over the medium term. Additionally, the U.S. has cautioned against a knee-jerk reaction to a potential deterioration in the euro zone that sought more deficit cuts. That, the U.S. warns, could create a downward spiral of austerity and recession.
More…
Nearing end of the coordinated operation CIGA Eric
We’re closer to the bottom than most realize. That’s what happens when fear rules the day. I will post more about this later.
Eric
More…
Greece decides to thumb their nose at Troika/Dutch cabinet resigns/Spanish and Italian bond yields rise/gold and silver bombed/bourses all in the red
Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 7 hours ago
Good
evening Ladies and Gentlemen:
Gold closed down today as all of Europe bourses and the USA Dow were in
the red. Gold finished the comex session at $1631.90 down $10.20 on the
day. Silver finished at $30.53 down $1.09. Spanish 10 yr yields rose
above 6% and stayed there the whole day followed by the 10 yr Italian
bonds which rose to 5.73% in yield. Credit default swaps rose against
these
Citi's Englander On What Can Go Wrong In The Next 11 Days?
As
usual the market remains on tenterhooks for its next fix of Central
Bank largesse and the following 11 days provide some rather large
potholes for those addicted to the sweet nectar of freshly printed
extreme monetary policy. Citi's Steven Englander provides some
much-needed reality checking on what the market is expecting and what
the FOMC/ECB might deliver, and all importantly, what the
implications for risk-assets in general will be. The possibility of
misunderstood language at the FOMC meetings seems very high even as the
announcement of additional measures remains unlikely and perhaps more
notably the Euro has sold off sharply when the ECB does not present a
policy response to rapidly deteriorating market conditions - especially
in light of the implicit tightening we have seen in Euro-zone aggregate
rates. Rock meet hard-place.Is Gold Volatility The Cheapest Event-Risk Hedge?
With
the plethora of mounting event risks, from the end of Operation Twist
to numerous elections, the possibility of QE3, the US fiscal situation,
the ECB/Bundesbank battle, and China's on-again-off-again economy, it
seems finding a low cost long volatility 'bet' is the best way to gather some macro protection (aside from total liquidation that is). Earlier, we noted
how expensive S&P 500 implied volatility had become relative to its
realized vol - suggesting that being long S&P vol is not a
low-cost option. However, as Barclays points out, GLD (and
slightly less so SLV) is among the cheapest (defined based on
percentiles of implied vol over realized vol) volatilities available.
SPY vol is trading at a 60% premium to its realized vol while GLD is
trading at a 20% discount. While the main risk to being long GLD
volatility is a continued drift lower in realized vol, the current
realized volatility is near the lower-end of its empirical range and
there appear to be a number of catalysts, as we noted above, for gold
(or hard assets in general) to break from its range-bound YTD
performance in price and volatility (either up - more likely in our
view - or down). Bing administration says 2,500 job cuts, privatization will save Detroit $250M
Eric De Groot at Eric De Groot - 9 hours ago
The Dutch people have been reminded that austerity changes leadership. This
principle knows no prejudice or lines of nationality. Headline: Bing
administration says 2,500 job cuts, privatization will save Detroit $250M
Detroit Mayor Dave Bing’s staff laid out a city budget this morning that
cuts more than 2,500 jobs in an effort to shave $250 million from its
annual expenses as the city...
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content, and more! ]]
The Gold Standard Shuffle
Gold Outperforms As Stocks Suffer From Wal-Mart's 'Sinko-De-Abril'
An
ugly European market initially dragged stocks notably weaker
overnight, with plenty of headline-makers from Apple's moves to WMT's
'Sinko-de-Abril' accounting for 20% of the Dow's loss, and Europe's
macro data but after the first 30 minutes or so, S&P futures bounced
off 4/10 day-session lows and leaked higher all day from there to end
around last Monday's closing print. Volumes lagged as we rallied - as
did average trade size - but in the last few minutes heavy volume and large average trade size stepped back in more biased to the downside.
Stocks and volatility continue to follow very similar paths during
this reflation phase as they did in 2010 and 2011 and while much was
made of VIX's more-positive-than-expected performance today, we remind
readers that we are at 8-month wides relative to realized vol - suggesting markets are anticipating a lot more anxiety ahead.
FX markets leaked higher in the USD until shortly after the US
day-session open and then drifted USD weaker from there as Treasury
weakness coincided with EUR buying - smelling a lot like more
repatriation flows. The drift higher in equities is therefore supported
from a correlation-perspective as carry and rates (and oil) pushed up
from soon after the US open. The USD ended up around 0.25% from
Friday's close (with JPY the best performer and stable from the Tokyo
close) which matches gold's 0.25% loss (though still best of the group)
as Commodities all lost ground today with Silver underperforming. WTI
managed to get back over $103 by the close. Credit markets
underperformed close-to-close but from the lows intraday, they managed
to out-gain stocks with a late-day pop in HYG bringing it in line with its intrinsic value and SPY for the first time since 3/29.NFLX Beats But Guidance Stuns Stock -19% From Friday's Close, Margins Implode
Netflix
headlines may appear rosy as top and bottom lines were a beat but
guidance on revenues and subrscriber adds perhaps rings the death knell
on this mythical beast...*NETFLIX SEES 2Q NET ADDS BELOW THOSE OF 2010 :NFLX US
*NETFLIX SEES 2Q REV. ABOUT $873M-$895M; EST. $893.4M :NFLX US
We can only hope that AAPL does not miss in any way on any metric ever as NFLX is now down 18% from Friday's close...
Global Systemic Risk At 3 Month Highs
In a little over a month, the risk of the 30 most systemically important global banks has jumped an impressive 45%.
At 235bps, the FSB30 stands just shy of the peak levels that were seen
in the initial March 2009 crisis moment - though remains below Q4 2011
peak crisis levels. Perhaps, despite all the protestations of 'zee
stabilitee', self-sustaining record-profit-margin-driven recovery, and
Chinese soft-landing, the vicious circles of austerity in Europe (and
perhaps the US) and financials squandering their newly-found liquidity
(and certainly not capital) is becoming too large to ignore?Rosenberg Roasts The Roundtable Of Groupthink
It appears that when it comes to mocking consensus groupthink emanating from lazy career 'financiers' who seek protection from their lack of imagination and original thought, 'creation' of negative alpha and general underperformance (not to mention reliance on rating agencies, only to jump at the first opportunity to demonize the clueless raters), in the sheer herds of other D-grade asset "managers" (for much more read Jeremy Grantham explaining this and much more here), David Rosenberg enjoys even more linguistic flexibility than even us. Case in point, his just released trashing of the latest Barron's permabull groupthink effort titled "Outlook: Mostly Sunny." And just as it so often happens, no sooner did those words hit the cover of that particular rag, that it started raining, generously providing material for the latest "Roasting with Rosie."
With continued volatility in many of the key global markets, 40 year veteran, Robert Fitzwilson wrote this exclusive piece for King World News. Fitzwilson is founder of The Portola Group, one of the premier boutique firms in the United States. Here are Fitzwilson’s observations: “The world’s fiat money system is based upon a sleight of hand, the most significant magic trick ever invented. The sleight-of-hand begins with the creation of debt, frequently issued by a sovereign entity such as a king or a nation. The debt often starts out being backed by some real asset, such as land in the French Revolution or gold in the case of the U.S. during the early stages of our Federal Reserve System.”
Robert Fitzwilson continues @ KingWorldNews.com
SBSS 23. The World Is Cornering The Elite
by C. Powell, GATA.org:
Dear Friend of GATA and Gold:
He doesn’t quite put it that way, but in his new commentary about gold’s competition with U.S. Treasuries for recognition as a default-proof and inflation-proof asset, University of Texas Business School Professor Lew Spellmake essentially makes the case for the gold price suppression scheme.
Spellman writes:
“For decades U.S. Treasury debt took over from gold as the market’s preferred store of value. Treasury bonds mythically had no default risk and little inflation risk when central banks were not under pressure to be concerned about unemployment, lending to insolvent banks, or propping up the value of government debt. Moreover, U.S. dollar-denominated Treasuries not only served as the store of value but also sprouted interest payments.”
Read More @ GATA.org
Dear Friend of GATA and Gold:He doesn’t quite put it that way, but in his new commentary about gold’s competition with U.S. Treasuries for recognition as a default-proof and inflation-proof asset, University of Texas Business School Professor Lew Spellmake essentially makes the case for the gold price suppression scheme.
Spellman writes:
“For decades U.S. Treasury debt took over from gold as the market’s preferred store of value. Treasury bonds mythically had no default risk and little inflation risk when central banks were not under pressure to be concerned about unemployment, lending to insolvent banks, or propping up the value of government debt. Moreover, U.S. dollar-denominated Treasuries not only served as the store of value but also sprouted interest payments.”
Read More @ GATA.org
by Dr. Paul Craig Roberts, PaulCraigRoberts.org:
When did things begin going wrong in America?
“From the beginning,” answer some. English colonists, themselves under the thumb of a king, exterminated American Indians and stole their lands, as did late 18th and 19th century Americans. Over the course of three centuries the native inhabitants of America were dispossessed, just as Israelis have been driving Palestinians off their lands since 1948.
Demonization always plays a role. The Indians were savages and the Palestinians are terrorists. Any country that can control the explanation can get away with evil.
I agree that there is a lot of evil in every country and civilization. In the struggle between good and evil, religion has at times been on the side of evil. However, the notion of moral progress cannot so easily be thrown out.
Read More @ PaulCraigRoberts.org
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When did things begin going wrong in America?“From the beginning,” answer some. English colonists, themselves under the thumb of a king, exterminated American Indians and stole their lands, as did late 18th and 19th century Americans. Over the course of three centuries the native inhabitants of America were dispossessed, just as Israelis have been driving Palestinians off their lands since 1948.
Demonization always plays a role. The Indians were savages and the Palestinians are terrorists. Any country that can control the explanation can get away with evil.
I agree that there is a lot of evil in every country and civilization. In the struggle between good and evil, religion has at times been on the side of evil. However, the notion of moral progress cannot so easily be thrown out.
Read More @ PaulCraigRoberts.org
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