Jim Sinclair’s Commentary
I would not argue with Trader Dan mainly because he is right. All I would add is "In time,” rather than “tomorrow."
Those on the left who read my columns will of course take exception with the title I have deliberately chosen, but that is and was a given. So let me start this by saying that I believe their euphoria at having seen their man win, will be short-lived, faced with the extreme problems facing this nation and their utter lack of anything that remotely resembles a plan to deal with them other than the usual class warfare tact of "soaking the rich" further and further enlarging the size and scope of an increasingly intrusive Federal Government.
I have written on this site repeatedly that the problems afflicting the US economy cannot and will not ever be solved by Uncle Ben Bernanke’s alchemy of turning paper into "money" and multiplying it in ever larger doses. What ails the US is structural or deep seated. To tackle that involves a serious plan, a plan which by its very nature will involve making choices that will surely bring about some short-term pain but which would put the nation on a sound footing for long term growth and lasting prosperity. Foremost among this is reducing the spending binge in Washington DC and getting America’s fiscal house in order. That WILL NOT HAPPEN now that the profligate spender Obama has been re-elected. He has no serious plan to reduce the deficit and never has. One can tax the "rich" into oblivion but even confiscating the entirety of their wealth would not so much as to put a dent into the burgeoning national debt.
Business owners, particularly small business owners, the backbone of this nation’s economic health and the primary source of all job creation, had been holding their breath, hoping against hope, that the nation would be delivered from its national nightmare. They either went to bed last evening or arose early this morning to learn, much to their consternation and dismay, that the nightmare will continue for four more long years. A system of nationalized healthcare, with the IRS being the chief enforcers of the penalty for non-compliance now awaits them along with a set of growing, job-killing regulations guaranteed to put further burdens upon them. Not only that, the beginning of the year 2013, will see a massive set of tax hikes hit the nation, further depressing economic activity.
An energy rich nation, blessed by Providence with an abundance of oil, will see its federal lands shut off to any drilling. Any hope for a pipeline delivering Canadian crude to the lower 48 has now withered and died on the vine. China – enjoy that Canadian oil because we are not going to see any of it.
The Dollar, while getting a respite today due to the fact that a near panic has seized upon the investor class, is destined to further weaken, resulting in higher prices for the basics of life such as food and energy. The fiscal cliff is drawing ever nearer with the very real possibility, nay strike that, probability, that the rating agencies will further downgrade the US credit standing.
My Dear Friends,
Today the PPT yanked out speaker Boehner to try and offset the minus 300 on the Dow that was scared to selling by the Fiscal Cliff. His speech was designed to calm financial people about the said cliff. It has to tell you Washington on both sides of the isle is scared to death about a collapse in confidence.
The Fed today confirmed its intention to QE to infinity. It sounded good, but in order to have an agreement you will have to inject brains into the clueless legislators.
Taxes are going up, so if you have losses to take try planning rather than the knee jerk action of not wanting to pay taxes on 2012 profits at the lower 2012 levels.
Taxes on profits have but one way to go, and that is up.
The ability to give tax free gifts to your family members is certain to come to a screeching halt in early 2013. I know giving is hard, but it makes very good sense when you are over 60 to balance your estate as taxes on estates are headed through the roof.
Jim Sinclair’s Commentary
This is relevant, especially today.
When students score low marks parents feel great grief. Similarly, when we fall low in morals and spiritual virtues, our motherland bemoans her fate ten times more sadly. We have to assuage the grief of the physical mother and promote the peace and prosperity of our motherland. The motherland is not a mere lump of earth. When we desire her progress, we have to promote the progress of the people who dwell therein. The skills needed for resuscitating and reforming are found in youth. The reforming process involves the removal, in daily living, of bad conduct and bad habits, and the practice of good conduct and good deeds. You must express your humility, fortitude, equanimity, and gratitude for kindness received, in various acts in your daily life, every day.
Jim Sinclair’s Commentary
A downgrade like this would not be greased over as easily as some might think.
U.S. Warned by Fitch on Fiscal Cliff; Moody’s Stands Pat on View By John Detrixhe – Nov 7, 2012 1:06 PM ET
Nov. 7 (Bloomberg) — Fitch Ratings warned that the U.S. may be downgraded next year unless lawmakers avoid the so-called fiscal cliff and raise the debt ceiling in a timely manner, while Moody’s Investors Service said it will wait to see the economic impact should the nation experience a fiscal shock.
Congress and President Barack Obama must confront more than $600 billion in tax increases and spending cuts set to take effect in 2013 or risk the economy tipping back into recession. Standard & Poor’s stripped the U.S. of its AAA credit rating on Aug. 5, 2011, after months of political wrangling that pushed the nation to the deadline an agreement to lift the debt ceiling.
The U.S. rating depends on “a stabilization and then a downward trend in the ratio of federal debt” to gross domestic product next year, according to a Moody’s statement. Fitch also said that the nation may lose its AAA ranking next year if the government fails to reduce the deficit.
Moody’s would likely “await evidence that the economy could rebound from the shock” of the U.S. falling off the fiscal cliff before considering restoring the nation’s stable outlook from negative, according to the company’s statement.
The U.S. Treasury reiterated Oct. 31 that it expects to reach the federal debt limit “near the end of 2012.” The agency said in a statement that it can use “extraordinary measures” that would “provide sufficient ‘headroom’ under the debt limit to allow the government to continue to meet its obligations until early in 2013.”
Jim Sinclair’s Commentary
Chris and Adam have been doing a good job. Here is a balanced article on the future, worth a read.
A good deal of our friends in the community tend to lean towards sensationalism as a competitive edge. I prefer a practical review of the predicaments we are in
Time to Focus on ‘Return of Capital’ by Adam Taggart of PeakProsperity.com
I am more concerned with the return of my money than the return on my money.
- unknown (often attributed to Mark Twain or Will Rogers)
The U.S. Presidential race is now behind us. And this morning the world woke up and realized that all the issues the election postponed now lie before us.
In his victory speech, President Obama focused on moving ‘forward’:
Obama’s re-election puts ‘forward’ to the test
"You elected us to focus on your jobs, not ours. And in the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together. Reducing our deficit. Reforming our tax code. Fixing our immigration system. Freeing ourselves from foreign oil. We’ve got more work to do."
That’s not a bad list of several of the bigger challenges we face: perniciously high and persistent unemployment, trillion dollar annual deficits, a complex and unequal tax code, overdependence on fossil fuels (domestic as well as foreign, I would add), and population management. These are truly prodigious issues that our nation is struggling with, in many cases for decades without resolving.
But that list of woes is not near complete. Add to it our national over indebtedness and insolvency, our eroded manufacturing base, escalating costs of food/fuel/health care, our outdated infrastructure, our failing educational system, accelerating global depletion of and competition for key resources, an aging population, the most dramatic wealth gap in our country’s history, and an unsustainable monetary system. For certain, there are also many other competing problems that can be further added to this ‘worry list’.
The hard truth is that these problems are not going to be resolved in the next four years, irrespective of whoever won the election last night.
In fact, as Chris so often states, many of these are not problems; they are predicaments. Problems have solutions. Predicaments have only outcomes. Outcomes that need to be managed. And if you’re jawboning about ‘solving’ a predicament (which our politicians have made a full-contact sport out of), you’re wasting precious time.
Jim Sinclair’s Commentary
Now we have a good snowstorm here in the foothills of the Berkshires. We might get some good snow accumulation. That leads me to the illustration below.
Jim Sinclair’s Commentary
I asked Patrick in Brussels today what he thought of gold now. He told me my price objectives are seriously too conservative.
Jim Sinclair’s Commentary
Add swaps and every under the table way to backstop Euroland and you will have trillions, not hundreds of billions.
The timing of this statement was not a mistake. I think it is the "High One" from The Bernank.
Fed’s Williams Says Bond Buying May Exceed $600 Billion. By Jeff Kearns – Nov 6, 2012 1:00 AM ET
Federal Reserve Bank of San Francisco President John Williams said the central bank may buy more than $600 billion in bonds by extending its third round of quantitative easing well into next year.
The Federal Open Market Committee last month affirmed its decision in September to buy $40 billion of mortgage-backed securities each month without specifying the total size or duration of the purchases. Williams, who holds a vote on policy this year, was among the first Fed officials to advocate open- ended bond buying.
“It should be at least that big but I would think it would probably be bigger given my view on how slow the economy is going,” Williams said yesterday, referring to his Aug. 31 comment that the Fed should purchase $600 billion in bonds in a third round of asset purchases.
“It’s going to take a long time for unemployment to come down and growth to really pick up,” Williams said to reporters after a speech in Irvine, California.
The central bank’s unprecedented bond-buying may boost economic growth without spurring inflation, Williams said in the speech to students and faculty at the University of California, Irvine.
Research shows the Fed’s three rounds of asset purchases have been “effective in stimulating growth” by raising prices for financial assets and reducing borrowing costs for businesses and consumers, said Williams, 50, the bank’s chief since March 2011. While the unconventional easing poses some risks of inflation, policy makers don’t see signs of unstable prices, he said.
Jim Sinclair’s Commentary
This means tons of political screaming followed by an increase in the debt ceiling.
Treasury Quietly Warns: ‘Expect Debt Limit to Be Reached Near End of 2012′ By Terence P. Jeffrey
(CNSNews.com) – The U.S. Treasury quietly warned at the end of a statement issued last Wednesday that it expects the federal government to hit its legal debt limit before the end of this year–which means before the new Congress is seated–and that "extraordinary measures" will be needed before then to keep the government fully funded into the early part of 2013.
On Aug. 2, 2011, President Obama signed a deal he had negotiated with congressional leaders to increase the debt limit of the federal government by $2.4 trillion. But, now, after only 15 months, almost all of that additional borrowing authority has been exhausted.
Although Treasury revealed in its statement on Wednesday that it was likely to hit the debt limit by the end of the year, Treasury Secretary Geithner failed to respond to a letter that Senate Finance Ranking Member Orrin Hatch and Senate Budget Ranking Member Jeff Sessions sent to him on Oct. 15 demanding that he notify them by Nov. 1 what he believes to be the exact date Treasury will hit the debt limit and the date he expects to begin using "extraordinary measures" to avoid it.
"Treasury continues to expect the debt limit to be reached near the end of 2012," says the tenth paragraph of the "Quarterly Refunding Statement" put out by Assistant Secretary of the Treasury for Financial Markets Matthew Rutherford.
"However, Treasury has the authority to take certain extraordinary measures to give Congress more time to act to ensure we are able to meet the legal obligations of the United States of America," said the statement. "We continue to expect that these extraordinary measures would provide sufficient ‘headroom’ under the debt limit to allow the government to continue to meet its obligations until early in 2013."
My Dear Friends,
We all know that the short term direction of markets is more a product of soul-less machines than it is fundamentals or even technicals.
Writers and speaker are always asked the why of a market move. Well, if we have to define a why it is that the focus of markets is now on the fiscal cliff with the anticipation of a partisan drag out and knock down fight scaring equity traders.
The solution will fall on central bank’s policy of stimulation.
The Fed will be the lender of last resort to the entire western financial world. QE to infinity is not a choice, it is the only tool that applies to the present international financial situation.
Gold is alive and well. Gold shares according to very knowledgeable CIGA Luis Ahlborn Sequeira "will become the market."
Jim Sinclair’s Commentary
CIGA HK calls our attention to the fact it already happened once in the USA.
The refusal of King George III to allow the colonies to operate an honest money system, which freed the ordinary man from the clutches of the money manipulators was probably the prime cause of the revolution. –Benjamin Franklin
Boy, nothing changes much, does it?
Same families, just the younger editions are well trained by their fathers and grandfathers. Brain washed from birth to feel the blood flowing in their veins is special and different. They are well bred to continue the line. They go to the same universities and are members of the same fraternities. The devils continue from one period to the next and onward.
Believe me, I know.
Frank Anstey M.P. – The Money Power (1921)
The Money Power in Australia, Britain and the USA and the power it exerts over the political process; bank bailouts and debt free money issues like the 1914 Bradbury Notes in GB.
Dear Mr. Sinclair,
I have been an acolyte of yours for 5 years now, many thanks for kindly sharing your vast expertise.
I am what is often termed an ‘old Asian hand’, having lived and owned businesses in various countries in the region for over 25 years, keeping a close eye on China perpetually.
I (and others) believe China will use its power over the gold market as a last resort in times of domestic political crisis. A significant repricing of the metal will be the same as putting cash into the pockets of their population, whom they have been encouraging to buy gold for some time now. China can easily achieve this. Look what happened to the price of gold last time they officially adjusted their holdings. Their actions will, at some stage, help propel the price northwards significantly.
What few westerners understand is that any Asian family with any kind of wealth ALWAYS owns at least some gold. Gold has always been money and a store of wealth for this region, which also has the majority of the world’s population.
Dear CIGA Steve,
You are absolutely correct. The China bashers that might argue with you are people who may have visited China a few times on a zip trip and conclude they understand the Chinese.
The truth is that the Chinese do not understand the Chinese, nobody not Chinese has a rat’s chance of knowing the Chinese, certainly not some suit on Wall Street talking on Bloomberg.
It’s hard to believe how little Americans know about the real issues facing them after $6 billion was spent by both parties getting their message out (a record $2 billion for President alone). I don’t blame the politicians in this or any election cycle. After all, why talk about tough issues and choices if you are not pressured to do so. I blame the mainstream media (MSM) for acting more like cheerleaders and spin doctors than arbiters of truth for the public. The MSM ignored the real issues while spending hours on things like the Trayvon Martin tragedy. I do not know who is at fault, but I do know the MSM’s wall-to-wall coverage inferred there was a national problem of white on black murder when there is none. According to the latest FBI information, around 90% of blacks are killed by black people (likewise for the white on white murder rate).
The U.S. faces a financial storm of biblical proportions; I am talking a Noah’s Ark tsunami. The real fiscal cliff isn’t what is coming at the end of the year. It is the debasement of the U.S. dollar at the hands of the Federal Reserve that is printing $85 billion every month in “open-ended” currency creation. According to experts, it is only a matter of time before the U.S. bond market collapses with an interest rate spike that money manager Michael Pento says will turn into “an interest rate shock that will make the Great Depression look like the days of wine and roses.” Not a word in the debates or questions by the MSM to the candidates about money printing on a scale that has never been done in human history.
The 2008 financial meltdown was caused by a housing crisis created by big banks. They sold “liar loans,” packaged those loans into mortgage-backed securities, they were rated “Triple-A” when they were “toxic;” and when it all blew sky high, the bankers committed forgery, perjury and fraud that was politely called “robo-signing.” According to Professor William Black, who was also a top regulator in the Savings and Loan crisis of the 1980’s, more than 1,000 financial elites were successfully prosecuted in the aftermath of the S&L calamity. The 2008 meltdown was 70 times larger. There has not been a single financial elite charged with a crime. This fraud and crime is one of the main reasons the economy is still in deep trouble. According to Fabian Calvo of TheNoteHouse.us, “We haven’t even scratched the surface of being at the bottom of the housing market.” (His company buys and sells $100 million a year in real estate and sour mortgage debt.) $40 billion of the $85 billion the Fed prints every month is going for continued banker bailouts. You can talk all you want about raising taxes on rich, but the real money is in the banker bailouts. No meaningful discussion or questions were asked of the Presidential candidates on this subject either.
It has been widely reported the U.S. used al-Qaeda terrorists to help overthrow the Libyan government. It is doing the same thing in Syria. We all saw the results of this policy on 9/11/12 in Libya where four Americans (including a U.S. Ambassador) were killed in an al-Qaeda terrorist attack. Calls for help went unanswered, even though there was a live Internet video feed going into the White House situation room. No questions were asked by the MSM of either candidate of the logic and danger of this kind of foreign policy.
The President can legally order the execution of any U.S. citizen without due process. The President did just that last year when he ordered drone strikes in Yemen that killed three suspected American born terrorists. Relatives are suing the U.S. government for wrongful-death. According to a New York Times story, “The killings violated fundamental rights afforded to all U.S. citizens, including the right not to be deprived of life without due process of law,’ the complaint says.” (Click here for the NYT story.) There was not a single question asked of either Presidential candidate by the MSM about Presidential “license to kill.”
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I don’t normally watch television (the “zombie tube”), but I couldn’t resist on election night. So I tuned in and found myself reacting in total shock at the live news interviews with Americans who had just voted: These people were complete morons!
Without exception, the people I saw interviewed on the news appeared to be babbling idiots yanked right out of the movie Idiocracy. Some of them gave “reasons” for voting that had no basis in fact. “He’s good for the economy and created more jobs,” one Obama voter explained, apparently not realizing Obama has gutted the U.S. economy and destroyed tens of millions of jobs over the last four years, causing unemployment to skyrocket and food stamps to more than double.
Today in America, a man who distributed raw milk remains imprisoned in Ventura, California. He has committed no crime, but he is an enemy of the state and thus remains incarcerated for no rational reason. People across America are threatened with jail time for growing gardens, and one mom was recently given a $2500 citation because her three-year-old boy urinated in their own two acres of property.
The rise of the Idiocracy state is upon us, and it’s a recipe of tyranny and lunacy.
Read More @ NaturalNews.com
Today acclaimed money manager Stephen Leeb told King World News, “Usually I’m not surprised by anything I see in these markets, but yesterday when gold was up over $30, I was a bit surprised. Even with the market action today, it’s very clear that the market realizes that money is going to remain very easy.
My advice is if we get a dip in gold, I would buy that dip. Gold has a lot of support. I think long-term and that’s a bet that I’m always willing to make. I haven’t sold a single ounce of gold or a single share of a gold stock. That is because I am positioning and I am thinking about the long-term.”
Stephen Leeb continues @ KingWorldNews.com
While all eyes were on Hurricane Sandy in the days leading up to the storm’s breach on the mainland of the Northeast, the White House was busy devising new ways to enslave Americans under the guise of protecting national security. On October 26, 2012, Barack Obama quietly signed an Executive Order (EO) establishing the so-called Homeland Security Partnership Council, a public-private partnership that basically merges the Department of Homeland Security (DHS) with local governments and the private sector for the implied purpose of giving the Executive Branch complete and limitless control over the American people.
One of the most effective ways by which the federal government has been able to spread its tendrils into every level of state, regional, and local governments in years past has been to continually convince the people that terrorism lurks around every corner, and that the federal government is needed to provide safety. This, of course, is how blatantly unconstitutional provisions like the Patriot Act and the National Defense Authorization Act (NDAA) were able to get passed with relative ease — without these draconian expansions of federal control over American affairs, the terrorists will win, we were all told.
Read More @ NaturalNews.com
Residents On Long Island ARM THEMSELVES To Make Stand
In the wake of superstorm Sandy, reports of lootings across the Tri-State have been widespread.
Areas hit especially hard by Sandy continue to deal with dealing with lawlessness.
Rockaways residents told 1010 WINS reporter Gary Baumgarten that looting and thievery have become such serious threats that taking up arms and fleeing town are the best options for staying safe.
Read More @ NewYork.CBSlocal.com
U.S. Continues Descent Toward Third World Status; Loses Top 10 Position Among Most Prosperous CountriesAs much of the zombie-like public is still focused on which two of the political hack parties are going to offer a better direction for the future, the only direction that the U.S. is currently (and consistently) headed is directly into the Third World.
from CBS Detroit:
Among the new group of state lawmakers to emerge from Election Day on Tuesday is Brian Banks, who has been convicted eight times for felonies involving bad checks and credit card fraud.
Banks, a Democrat and lifelong Detroiter, won a seat in Lansing as a state representative for the 1st District, representing the east side of Detroit, Harper Woods, and the tony Grosse Pointes. He won 68 percent of the vote to Republican Dan Schulte’s 32 percent.
Banks, 35, was convicted eight times between 1998 and 2004 of writing bad checks and credit card fraud.
His slogan was “You can Bank on Banks.”
Read More @ Detroit.CBSlocal.com