Your Future...

"The End Game: 2012 And 2013 Will Usher In The End" - The Scariest Presentation Ever?

If Raoul Pal was some doomsday spouting windbag, writing in all caps, arbitrarily pasting together disparate charts to create 200 page slideshows, it would be easy to ignore him. He isn't. The founder of Global Macro Investor "previously co-managed the GLG Global Macro Fund in London for GLG Partners, one of the largest hedge fund groups in the world. Raoul came to GLG from Goldman Sachs where he co-managed the hedge fund sales business in Equities and Equity Derivatives in Europe... Raoul Pal retired from managing client money in 2004 at the age of 36 and now lives on the Valencian coast of Spain, from where he writes." It is his writing we are concerned about, and specifically his latest presentation, which is, for lack of a better word, the most disturbing and scary forecast of the future of the world we have ever seen....
And we see a lot of those.

A Chinese Bank Run?

The balance sheet recession that seems to have correctly diagnosed the problem facing Japan (and now Europe and the US)  - explicitly causing debt minimzation as opposed to profit maximization - seems to be taking hold. However, it appears this death-knell for credit-created growth is now being seen in China - as AlsoSprachAnalyst interprets "people are not borrowing, but selling assets to pay down debts, and/or holding cash". What is most worrisome is that while the focus of the world has been on European bank runs (for fear of bank failure and redenomination risk), 21st Century Business Herald now notes that these bank runs have spread to China's industrial and construction-heavy city of Wuyishan. Queues were seen on various branches of China Construction Bank, Agricultural Bank of China, and Industrial and Commercial Bank of China. One local resident told the reporter that the city “has gone crazy”.

Presenting Dave Rosenberg's Complete Chartporn

For all your late Friday night chartporn needs.

Cashing In On Japan's Debt Conundrum?

On the heels of Fitch's sovereign credit downgrade to A plus (the fifth-highest investment grade), Japan's government debt continues to swell. With its debt at over 200% of its GDP, the Land of the Rising Sun appears to be embarking on a trek into the debt-laden unknown. As with any well-known macro-trend, there are speculators eager to capitalize on it. A ballooning government debt is often associated with sovereign debt crises, as market shocks can send the interest rate paid on the debt to unsustainable levels. Coupled with Japan's shrinking population (and thus tax base), the country is setting itself up for a hairy situation (data for both charts are from the IMF's World Economic Outlook Database). Enter Kyle Bass, one of the few hedge fund managers who made a killing when he bet against housing during the subprime mortgage bust. He and his fund have now set their sights on Japan, specifically shorting Japanese yen and Japanese government debt. His thesis is simple: with a debt-to-GDP ratio over 200% and a contracting population, it's only a matter of time before a sovereign debt crisis sets in, thus triggering a rise in Japanese interest rates – which the government would be unable to service with a shrinking and aging tax base. So far this strategy hasn't worked as Bass intended: according to ValueWalk, Bass' fund lost 29% of its value in April alone. That's not to say Bass' assumptions are incorrect. But there are alternative ways of looking at Japan's situation.

About That Boaz Weinstein London Whale Bulls-Eye

Two days ago we made a simple observation: back in September 2011, Weinstein's firm SABA Capital hired one of the key JPMorgan prop traders - Maitland Hudson - who "ran JPMorgan’s proprietary trading of derivatives tied to commercial-mortgage bonds" and whose future job at Saba would "focus on relative value trades" - such as, perhaps, IG9 10 Year versus a basket of tranched trades... Our suggestion was that instead of being a brilliant credit trader as he has been called by Bill Ackman, and his antics while in charge of the DB prop desk certainly put theory in jeopardy, perhaps Weinstein is merely a wonderful headhunter: one who knows just whom to hire and when (kinda like Steve Cohen hiring key Pharmaceutical company R&D personnel in a perfectly legal transaction now that expert networks are done, but that is a topic for another day).

The Deer Is Back

It seems high-yield credit was on to something as we noted last night (here and here). Today's matrix-like collapse in equity perceptions of decoupling and central bank largesse sets up for more of the same as we suspect the ECB will hold off from acting until post-Greek-election to ensure the M.A.D. 'game' remains in place and with rates where they are, Bernanke will have to come up with some magical wording for his next QE raison d'etre. Today's 2.5% drop in the S&P 500 back below its 200DMA, its largest single-day drop in seven months, and the accompanying flood into safe-havens has left Gold and Treasury Bonds now outperforming Stocks for the year (with the Dow red YTD). S&P 500 e-mini futures volume was it highest of the year as we sit at the edge of the waterfall level from last July/August's plunge. Gold's 4% gain is the biggest day since January 2009. Treasury yields plunged to new all-time record lows with 30Y showing a 2.50% handle and 10Y a 1.43% handle. All the high-beta hope names were crushed with financials down 3.7% - their largest fall in 7 months (with the majors even more). VIX jumped 2.6 vols to close above 26.5% at 7 month highs. What is perhaps most disconcerting is the total lack of bounce into the close now two days-in-a-row - deer, meet headlights.

US Debt Soars By $54 Billion Overnight, Closes May At Record $15,770,685,085,364.10

There was one thing that the Roller-Upper-Of-Sleeves-In-Chief forgot to mention in his 1 pm rehearsed oratory today: the highlighted number below. And certainly the chart below showing the relative change in US GDP and debt. Since we can only assume the president was too busy pontificating on other very important things, we are happy to fill in the hole.n only assume he was too busy covering other important things, we are happy to fill in the holes.

Friday Humor Part 2 - TBTRIMJOB

In a day when many could do with some cheering up, here is some bonus humor courtesy of some truly delightful headline editing at Reuters.
 

2012 Just Woke Up In 2011 All Over Again

While the analogs to 2011 and 2010 have come thick and fast and our early January call for a three-peat has proved all too correct so far, the last few days are starting to really scream 2011 chaos regimes as Gold, Stocks, Treasuries, and the USD are now mimicking the 'reaction function' of investors faced with a world on its own. Just as last year, Treasury yields were first to go, then stocks and gold diverged as the USD surged. Ironic that this is occurring on the day when Gold and 30Y Treasury bond prices are now outperforming the S&P 500 YTD.

The Futility of QE

Trader Dan at Trader Dan's Market Views - 45 minutes ago

This is an attempt to explain what I believe will be the futility of another round of Quantitative Easing on the part of the Federal Reserve to do anything more than to merely provide another TEMPORARY boost to paper assets and by consequence, a short-lived blip in consumer confidence. As such, it is going to be much to the point without any rhetorical flourishes or attempts at refined writing. I do wish to start this brief piece by noting that I believe the Fed is indeed going to act, sooner rather than later, unless they want to witness a meltdown of the equity markets. Practicall... more » 

 

Gold Daily and Silver Weekly Charts - Did We See A Bottom In Gold Today?

SP 500 and NDX Futures Daily Charts - Something Wicked This Way Comes

Dude, Where's My Deflation? Yes the Fed Has Lowered Rates and Grown Money Supply But...

Gold Achieves that "16" Handle

Trader Dan at Trader Dan's Market Views - 12 hours ago

Gold's reaction to the payrolls number this morning was instantaneous - it shot up as if it was fired out of a cannon! As stated in the post on the mining shares this AM, gold is now fully expecting the Fed to move forward with a round of QE3 Sooner rather than later. It is this anticipation of a Fed move that has it blowing the recent hedge fund short positions out. Not only that, the ability to capture this elusive "16" handle and HOLD IT, has fresh money that has been sitting on the sidelines or in Treasuries (obtaining next to nothing for yield) willing to come in on the long sid... more » 

 

QE to infinity is more certain than death and taxes

Eric De Groot at Eric De Groot - 12 hours ago

QE to infinity is more certain than death and taxes. See the video we posted here on jsmineset.com today that gives you the worst case economic and social scenario for 2012, unless we go to full QE before the end of June 2012. Problems are reaching terminal velocity right now, here, today. QE to infinity might hold things together, in a sense, for 24 more months with gold above $3000.... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

 

The Sound And The Fury Of Financial Nuclear Air Raid Sirens

Dave in Denver at The Golden Truth - 13 hours ago

*Everyone stupid enough to sell their gold and buy Treasury bonds is climbing out of the lifeboat and getting back on board the Titanic* - guest on Fox Business *Anyone rooting for Ben Bernanke to print more money and Obama to borrow more to spend on "jobs creating" projects like Solyndra is one of the chickens in the coop cheering for Colonel Sanders*...Dave in Denver I'm going to keep today short if I can. Sometimes once I start writing there's no telling how amp'd up I'll get. Obviously the jobs report came in significantly below the Wall St. Einstein forecast. Because these... more » 

The Realities Of Choosing Your Survival Retreat Location

I am a child of an age laden with illusory wealth, and have benefitted (for a short time at least) from the financial fakery of our economic system, as have many Americans.  Most of us have not had to suffer through the unmitigated poverty, hopelessness, and relentless fear that are pervasive in harsher days.  All our problems could be cured with money, especially government money, and as long as the greenbacks were flowing, we didn’t care where they came from.  Ultimately, though, the ease of our well-to-do welfare kingdom has set us up for a cultural failure of epic proportions.  Anytime a society allows itself to be conditioned with dependency, its fate is sealed. We do not know what crisis really is.  Many Americans barely have an inkling of what it entails.  We imagine it, in films, in books, and in our own minds, but the fantasy is almost numbing.  We lose sight of the tangible grating salty rawness of the worst of things, while imagining ourselves to be “aware”.  Most people today are like newborns playing merrily in a pit of wolves. Preppers, on the other hand, are those who seek to understand what the rest of the public goes out of its way to ignore.  They embrace the reality and inevitability of disaster, and suddenly, like magic, they are able to see its oncoming potential where others cannot (or will not).  The price they pay for this extended vision, however, is high…





Read and Learn...

The Fed Is Playing With Fire

June 1, 2012, at 7:04 pm
by Jim Sinclair

Dear CIGAs,

QE to infinity is for certain. About that there is no question whatsoever. It cannot be avoided.

Operation twist is a damn joke stimulation wise. At this point in time it is a dark joke.

The Fed is playing with something worse than fire. That fire is posted in a video today on www.jsmineset.com. This video references a worldwide financial crisis that if it starts cannot be stopped by any power on the planet.

They are already easing up on the rhetoric. The Fed will downright panic as the world’s economies go from slow to dropping out of sight. That is what is on the plate tonight, this night, right here and now.

Safety only exists in gold bullion and in the outrageously depressed good gold shares now shorted out of sight.

Fed Will Likely Weigh Rosengren’s Call for Stimulus By Joshua Zumbrun and Jeff Kearns – Jun 1, 2012 3:50 PM ET
Federal Reserve policy makers this month will consider joining Boston Fed President Eric Rosengren’s call for renewed stimulus after a report today showed unemployment rose to 8.2 percent in May, economists said.
Rosengren said the Fed should further its full-employment mandate and extend beyond June a program known as Operation Twist, which lengthens the average duration of bonds on its balance sheet. He spoke before the Labor Department today said the U.S. added 69,000 jobs in May, the fewest in a year, pushing the yield on 10-year Treasury notes to a record low.
“The May report does significantly raise the odds of further easing from the Fed,” said Dean Maki, chief U.S. economist at Barclays Plc in New York and a former Fed economist. “There will be a case made at the June meeting for easing.”
By calling for new stimulus, Rosengren aligned with the view of Chicago Fed President Charles Evans. Any setback in the job market is also a chief concern of Chairman Ben S. Bernanke, who said in April the Fed may provide more accommodation should unemployment fail to make “sufficient progress towards its longer-run normal level.” Fed policy makers plan to meet June 19-20.
Today’s employment report “does change the game, certainly in terms of Operation Twist,” said John Silvia, chief economist at Wells Fargo & Co. in Charlotte, North Carolina. “Because the slowdown in the economy has been fairly rapid compared to what they expected, they’ll go ahead and extend Operation Twist.”
More…

 

Pimco’s El-Erian Sees Synchronized Global Slowdown

June 1, 2012, at 10:59 am
by Jim Sinclair

Dear CIGAs,

QE to infinity is more certain than death and taxes. See the video we posted here on jsmineset.com today that gives you the worst case economic and social scenario for 2012, unless we go to full QE before the end of June 2012.

Problems are reaching terminal velocity right now, here, today.

QE to infinity might hold things together, in a sense, for 24 more months with gold above $3000. Those popular gold writers calling for much lower gold prices are simply out of their mind sand disconnected from reality.

Regards,
Jim

Pimco’s El-Erian Sees Synchronized Global Slowdown

 

In The News Today

June 1, 2012, at 10:50 am
by Jim Sinclair

In the epic Ramayana, Ravana lent his ear to the pleasant eulogies from his ministers than the beneficial advice from his brother, Vibeeshana. By exiling his brother and honouring his courtiers, he sealed his own fate. Now many people are pursuing the pleasant over the beneficial and that is the reason for all distress and discontent. Indian Culture has always emphasised the hard and beneficial way; it has always advised the control of one’s senses. However people today follow cultures that cater to the senses and go after momentary and external frills and pleasures. Realize that the car is driven by steering the wheel inside, when this is turned, the outer wheels automatically move. Similarly when you turn the inner wheel, you can progress. –May 16th, 1966 SSB.

Dear CIGAs,

Gold did what? Well of course it did. Next comes an explosion in the shares.

Don’t you read jsmineset.com?

My Dear Extended Family,

This is true of any company out there with real value unrealized by the market in a safe political location outside of North America

Please give me a call or email me if you are one of them. I am a ready buyer.

Mining Maven Says Share Slump To Spur Merger Boom By Liezel Hill – May 28, 2012 10:16 AM ET
Catherine McLeod-Seltzer, one of Canada’s top mining dealmakers, is forecasting an increase in mergers and acquisitions because of a shortage of financing.
Mining stocks are trading close to a three-year low as commodity prices decline on concern that growth is slowing in China, the largest metals consumer. McLeod-Seltzer says that as investors shun equity offerings and banks shy away from making loans, more mine developers will be bought by larger competitors looking to add output and reserves.
“I see these downturns as opportunities,” she said in an interview in Toronto. “The company that’s going to create value for shareholders today is the one that’s not timid.”
McLeod-Seltzer, 52, who sits on the boards of five miners including Toronto-based Kinross Gold Corp. (K), says that during her 28-year career she has raised more than $600 million for new companies searching for mineral riches. She has co-founded exploration startups including Arequipa Resources Ltd., which was bought by Barrick Gold Corp. (ABX) for almost $1 billion after three years, and Peru Copper Inc., sold for about C$776 million ($757 million) within three years of its initial public offering.
‘Like Cockroaches’
“She’s been very effective,” Rob McEwen, founder of Canada’s Goldcorp Inc. (G) and the chief executive officer of Toronto-based McEwen Mining Inc (MUX), said in an interview. “She’s curious, and she’s one of those people who seems to have a good eye for mineral deposits.”
The world of mineral exploration comprises hundreds of ventures in Canada alone that are trying to bring deposits into production. In return for assuming the risk of evaluating and developing projects, often in remote regions, the payoffs, when they come, can be enormous.
More…





Jim Sinclair’s Commentary

This is the harbinger of things to come.

In the new normal now there will be donut lines, not soup lines.

Big Brother wants to eliminate the pensioners so donuts and perhaps sugary drinks are now on the menu along with Wonder Bread.

This is the only answer to Social Security and Medicare. Eliminate the clients.

National Donut Day: Free doughnuts inspired by WWI
National Donut Day celebrates the women who served doughnuts to US troops overseas in the first World War. Get free doughnuts for National Donut Day at Krispy Kreme, Dunkin Donuts, and other chains. By Schuyler Velasco, Correspondent / June 1, 2012
National Donut Day, which falls every year on the first Friday in June, is, of course, a time to celebrate Homer Simpson’s favorite pastry. But unlike many other national food holidays concocted by the Internet, this one has a real place in history.
Fresh off the heels of Memorial Day, celebrating America’s troops, National Donut Day was created in 1938 to honor another group of wartime heroes: women of the Salvation army who served doughnuts to soldiers during World War I.
But first, let’s get to the free doughnuts. In honor of National Donut Day, Krispy Kreme is offering one free doughnut per customer at participating locations, no purchase necessary. Participating Dunkin’ Donuts locations will give you a free doughnut with the purchase of any beverage. Regional chains celebrating the day include Lamar’s Donuts in the Midwest, which is giving away free doughnuts, and Canadian purveyor Tim Horton’s, which is offering a doughnut with any purchase if you “like” their Facebook page and bring in the printable coupon. Other local doughnut shops around the country are having their own promotions.
In New York’s Madison Square Park, pastrymaker Entenmann’s will be serving the largest box of Entenmann’s doughnuts ever created as part of the festivities. The company will also donate $25,000 to the Salvation Army.
More…





Jim Sinclair’s Commentary

What the hell, freedom of political speech is dead in the USA so why not this also?

The present surveillance of net blogs by our beloved Big Brother should lead to this.

Today we don’t burn books, we pull plugs on the net. We also do not write books anymore, we write blogs.

Jim Sinclair’s Commentary

No matter who is elected, this factor has little chance of changing.

Jim Sinclair’s Commentary

The Skier is descending and each of the illustrations will go down in history as perfectly correct, just like the Formula.

Job growth falters in May By Lucia MutikaniPosted 2012/06/01 at 8:36 am EDT
WASHINGTON, June 1, 2012 (Reuters) — Job growth in May was the weakest in a year and employers added far fewer jobs in the prior two months than previously reported, suggesting the economic recovery was faltering.
Employers created a paltry 69,000 jobs last month, the Labor Department said on Friday, the fewest since May last year. Economists polled by Reuters had expected nonfarm payrolls to increase 150,000.
In addition, employers added 49,000 fewer jobs than previously estimated in March and April. The unemployment rate rose to 8.2 percent from 8.1 percent as people flocked into the labor market.
While unseasonably warm weather that brought forward hiring into the winter months has been blamed for the step back in March and April, the latest report hinted at more fundamental weakness in the economy.
It could further shake confidence, coming on the back of a raft of soft regional factory surveys and a worsening of the debt crisis in Europe. Data on Friday also showed China’s vast factory sector lost momentum in May.
Economists have blamed Europe’s prolonged financial crisis and slowing Chinese growth for sluggish factory activity in May, which has evoked memories of the slackening of job growth in the summer of 2011 when the recovery nearly stalled.
More…


Jim Sinclair’s Commentary

Any part of this is possible post June 2012.

This is what the US Fed is playing chicken with for some PR reason only.

Jim Sinclair’s Commentary

The SWIFT weapon was blown on nothing.

Iran designs alternative system for SWIFT: CBI
Governor of the Central Bank of Iran (CBI) Mahmoud Bahmani says the country has designed and implemented a new system for conducting international transactions.
Bahmani said on Saturday the new system, which has already been activated, would replace Worldwide Interbank Financial Telecommunication (SWIFT)
On March 15, SWIFT CEO Lazaro Campos said in a statement that the society has decided to discontinue offering services to Iranian banks which are subject to financial sanctions imposed by the European Union.
On January 23, the EU foreign ministers approved new sanctions on Iran’s financial and oil sectors, which prevent member countries from importing Iranian crude or dealing with its central bank.
Experts believe that SWIFT’s new action is meant to fully enforce EU sanctions, as global financial transactions are impossible without using SWIFT.
Bahmani rejected reports about a Japanese bank freezing transactions with Iranian banks.
More…





Jim Sinclair’s Commentary

These are the seeds of the end coming in the mirror image dollar rally.

Yuan fetches 12.33 yen at start of Japan, China currency trading TOKYO, June 1, Kyodo
Direct trading in the Japanese and Chinese currencies started Friday with the Yuan fetching 12.33 yen at the outset, bypassing the U.S. dollar in a development expected to boost trade and investment between Asia’s two biggest economies.
Yen-Yuan trading was previously conducted by referring to their respective exchange rates against the dollar and so was subject to risks associated with fluctuations in the U.S. currency and increased costs to settle trade and investment transactions.
The first direct exchange rate was marked early morning in Tokyo, according to the Bank of Tokyo-Mitsubishi UFJ. It compared with 12.39 yen, the rate calculated via the dollar at Thursday’s close in Shanghai.
More…





Jim Sinclair’s Commentary

You think Greece got out of hand? Watch what happens in the US if the Fed doesn’t move. They will of course, this is an election year.

Jim Sinclair’s Commentary

The next step the financial geniuses have embarked on.

The can no longer be kicked. Whatever plan you have there is but one tool. That tool is QE to infinity.

Time Bomb? Banks Pressured to Buy Government Debt Published: Thursday, 31 May 2012 | 2:42 PM ET
By: Jeff Cox
US and European regulators are essentially forcing banks to buy up their own government’s debt—a move that could end up making the debt crisis even worse, a Citigroup analysis says.
Regulators are allowing banks to escape counting their country’s debt against capital requirements and loosening other rules to create a steady market for government bonds, the study says.
While that helps governments issue more and more debt, the strategy could ultimately explode if the governments are unable to make the bond payments, leaving the banks with billions of toxic debt, says Citigroup strategist Hans Lorenzen.
"Captive bank demand can buy time and can help keep domestic yields low," Lorenzen wrote in an analysis for clients. "However, the distortions that build up over time can sow the seeds of an even bigger crisis, if the time bought isn’t used very prudently."
"Specifically," Lorenzen adds, "having banks loaded up with domestic sovereign debt will only increase the domestic fallout if the sovereign ultimately reneges on its obligations."
More…

 

 

Jim’s Mailbox

June 1, 2012, at 10:16 am
by Jim Sinclair

Hi Jim,

Your JSMineset article on Mergers and Acquisitions coming after the El-Erian video wherein it was mentioned that 1) companies (non gold) have large amounts of cash, and 2) Central Banks will continue low interest rates, triggered something in my mind.  Would it not be reasonable for those cash rich companies to start buying gold producing (and maybe gold exploration) companies? Or if not the whole company, at least shares of gold producing companies in order to preserve capital, and especially the purchasing power of that capital?
I have read on a number of occasions where the market cap of a MacDonald’s or a Cocoa Cola is more than the market cap of all gold companies combined. Therefore it seems to me that this could be accomplished very easily by an individual company – provided they were the first or one of the first to do so.  Once corporations caught on to this, there could be the “explosion of the shares” you suggest, as competition for gold companies increased.  Would not what is good for an individual also be good for a company?
CIGA Dave

Dave,

It would be a stroke of genius but it will not happen.

Jim

Hi Jim,
Right, it’s all relative. We are one of the very few analysts (along with ECRI and Hussman) who have stuck by our recession call for the past nine months. The smoke and mirrors economy engineered by the Fed has been able to fool the mainstream, but not those who analyze and understand the data. The economic and market turmoil during the second half of this decade will make the current disruptions look tame by comparison. Many will be shocked beyond belief when gold rises to $10k per ounce. A few of us will not be.
Best Regards,
CIGA Erik McCurdy
Senior Market Technician
Prometheus Market Insight www.prometheusmi.com

Erik,

We are crisis velocity all over the Western financial system today. Right here, right now!

You are totally correct.

Jim

Jim,
There is ALWAYS "cash" so to speak.  Would you not trade your farm for shares of a mining company as long as it was a real, safe location and proven ore?  Or for Gold, Silver?  You better than anyone on the planet knows that "something" must be used as money.  The only thing is it will take time to implement a new currency (one that people have confidence in).  Think back to Weimar, the new currency was introduced and real estate dropped 30% overnight and THEN started going down because there was no money on the street.  Deflation hit once real money was introduced. Yes, you may have a problem unloading the farm but in the scheme of things does it really matter?  It is what percent of your net worth, 5%, 1%, less? Relax and enjoy what little time is left to live civilized!
Best,
CIGA Bill

Bill,

I would trade my farm for shares of any quality gold junior.

Well said on all points.

Jim

Jim,
Having brushed off a little bit of MSM market shrapnel, somehow my thoughts center on you. I think the Gods are smiling on you.
Here’s to QE(n).
CIGA Alexander Truth




Dear Jim,
Patience is a virtue and you sure deserve a medal. It sure looks like today was the start of something big. Thanks for all your advice over the years.
CIGA Howard

Dear Howard,

Now it is June and this is the month it was destined to happen.

Yesterday will go down in market history as the day gold asserted itself.

Now we try $1764 again no matter what the manipulators try.

Jim

David,

it has already begun at Morgan and behind the FASB legal curtain of the others.

Jim

Could The Global Derivatives Market Tip Over? www.davidchapman.com

Source: Global Research
The picture is rather stark. This is a chart shown in an article at Global Research (www.globalresearch.ca) – Financial Implosion: Global Derivatives at 1,200 Trillion Dollars 20 Times the World Economy. It bears repeating.

US economy added 69K jobs in May, fewest in a year CIGA Eric
More evidence of what Insight readers already know, the economy is slowing.  Today’s weak employment data (see chart and headline) will increase both political and social pressure for another installment of QE(n).
Chart: Job Creation Histogram (JCH): Net Nonfarm Payrolls Added/(Lost) less Civilian Labor Force Added/(Lost), 12 Month Average.


Headline: US economy added 69K jobs in May, fewest in a year
WASHINGTON (AP) — U.S. employers created 69,000 jobs in May, the fewest in a year, and the unemployment rate ticked up. The dismal jobs figures could fan fears that the economy is sputtering. The Labor Department also says the economy created far fewer jobs in the previous two months than first thought. It revised those figures down to show 49,000 fewer jobs created. The unemployment rate rose to 8.2 percent from 8.1 percent in April, the first increase in 11 months. Dow Jones industrial average futures, which were already down 100 points before the report, fell an additional 100 points within minutes of its release. The yield on the benchmark on the 10-year Treasury note plunged to 1.46 percent, the lowest on record, suggesting investors are flocking to the safety of U.S. government bonds.
Source: finance.yahoo.com
More…





Greece Pours $22.6 Billion Into Four Biggest Banks CIGA Eric
More money pours in and deposits and capital flee Greece. Officials have warned that the state could run out of cash to pay pensions and salaries by end-June. As Jim suggests, this could be key to timing.
Headline: Greece Pours $22.6 Billion Into Four Biggest Banks
Greece handed 18 billion euros ($22.6 billion) to its four biggest banks on Monday, an official said, allowing the stricken lenders to regain access to European Central Bank funding. Facility rescue fund — will boost the nearly depleted capital base of National Bank, Alpha, Eurobank and Piraeus Bank. "The funds have been disbursed," an official at the Hellenic Financial Stability Facility, who declined to be named, told Reuters. The HFSF was set up to funnel funds from Greece’s bailout programme to recapitalise its tottering banks. The HFSF allocated 6.9 billion euros to National Bank, 1.9 billion to Alpha, 4.2 billion to Eurobank and 5 billion to Piraeus. All four are scheduled to report first-quarter earnings this week. The news came as two government officials told Reuters that near-bankrupt Greece could access 3 billion euros, left from its first bailout programme, to cover basic state payments if efforts to revive falling tax revenue fail. "Our finance ministry efforts at this time are focused on boosting revenue," one official told Reuters. But he added that if these efforts failed they would "examine all alternatives, including the 3 billion euros from the first bailout." Greek state coffers are on track for a more than 10 percent fall in revenue this month, a senior finance ministry official said last week. Officials had warned the state could run out of cash to pay pensions and salaries by end-June.
More…





China’s ICBC has big dreams for bullion business CIGA Eric
Negative lease spreads represent the paper that leans on price. As price declines, the paper is removed and lease spread expand towards zero (see table). Reuters reports that the Chinese through the the world’s largest bank by value are pushing to gain entry into this lucrative game of control. Gold and Silver Lease Spread Composite Table:


Headline: China’s ICBC has big dreams for bullion business
SHANGHAI May 28 (Reuters) – Industrial and Commercial Bank of China Ltd is seeking membership of overseas exchanges and aims to become a major global bullion market maker, a senior executive said on Monday. The world’s biggest bank by market value, ICBC is the top player by volume on China’s gold and futures exchanges, but its participation in foreign markets is limited to over-the-counter trading, which reached a total $90 billion last year. Emboldened by Beijing’s ambitions to have a bigger say in global commodity prices, ICBC now has an eye on bourses such as COMEX and on joining the 11 market makers of the London Bullion Market Association (LBMA). These quote continuous two-way bid and offer prices for gold, silver, platinum and palladium throughout the London day, providing a liquid market in which to trade.
Source: af.reuters.com
More…





Jim,

Marketwatch got its timing wrong featuring "gold’s new identity crisis" article on its front page when the only green indicator on the right hand side is gold up +3pc with everything else deeply in the red.
Screen picture attached.
With kind regards,
CIGA Christophe de Buchet

 

 

In The News Today

May 31, 2012, at 12:21 pm
by Jim Sinclair

Jim Sinclair’s Commentary

The following excerpt is from Eric Sprott’s recent article "The Real Banking Crisis, Part II."

The recent gold price has been particularly frustrating given the continuation of bullish demand trends out of China. China posted another record Hong Kong gold import number in March of 62.9 tonnes. Gold imports into China have now totaled 135.5 metric tonnes between January and March 2012, representing a 600% increase over the same period last year. We don’t have to connect the dots here – China is stockpiling the precious metal while investors in the West scratch their heads wondering why the spot price is so low.
Link to full article…



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