Q: Hi! I have a question for your Q&A day on Wednesday. In the 1933 gold confiscation, did FDR gold confiscate silver as well - and if so, what were the limits allowed if any for an American citizen?

Q: Hey there, I'm a worker in the Alberta oil sands but live on the east coast of Canada, I worry about how the "patch" will be effected by a U.S. currency reset/revaluation as it's so tied into the US economy as well as the rest of Canada. Also it bothers me being so far away, when I'm out at work, for my family if this were to go down while I'm away. Your thoughts please as I am a long time reader and respect your insight.

Bill Holter's Answer:

These are different questions from the norm but very good nonetheless.  First, Canada will probably follow economically the fate of the U.S.  The question on oil is a tough one, does it drop in price because demand softens with weaker economies or does it strengthen as an inverse move to weak currencies?  Also, being in the oil sands area, a lot will depend on their breakeven.  Lower prices mean you may be out of work while higher prices may mean you are working when many others (in other professions) are not.

As for you question of "distance" from your family, you are not going to like my answer.  I believe it is very possible for many areas to close outright in the midst of a reset, transportation included for a time.  You are 2,500 miles from your family and cannot stock enough gasoline in a car to make the trip, if airlines, trains and buses are not running for a spell, you will be stuck.  There is no getting around this possibility, you may want to keep a few ounces of gold on hand with you as a way to "pay the fare" back home.  I would have the metal in smaller denominations like quarter ounces and 1/10ths as these may get you 100 to 200 miles at a time.  Don't laugh at this, Jim Sinclair has said on many occasions he will not travel without gold.  Gold will "spend" when nothing else will, it got many out of Germany and harm's way when it counted.  A few ounces can probably get you across Canada when nothing else will.  Hope this was helpful.

Q: Why isn't the price of gold higher? With China purchasing 68 tons last week, Bill mentioned this is evidence of high demand taking advantage of weak prices. My first assumption was that the 2,200 tons of gold mined each year was essentially the same as the FED printing currency. But then I remembered that there is a finite supply of physical gold (I guess there is a finite supply of paper too). According to the USGS there remains 54,000 tons of gold yet to be mined. Assuming the world produces 2,200 tons per year as Bill mentioned, that leaves approximately 25 years until the world's gold reserves are exhausted. What is keeping the price of gold so low?

Andy Hoffman's Answer:

Actually, 2700 tonnes are mined each year, but I'm not sure I understand the connection to Fed money printing. 

As for "why" gold is not higher, it's not like China's 68 tonnes purchase last week was an anomaly.  They have been buying at record amounts for years, as has the world at large.  The "reason" gold prices are lower - albeit, less so in dollar terms than other currencies - is due to manipulation.  Part of this game relates to naked shorting (selling what doesn't exist) on paper exchanges like the COMEX and LBMA, which we speak and write of each day.  The other part is the secret dishoarding of Western Central bank inventory via leasing, swapping, and unreported sales.  Simple math proves this to be true - much less, the reams of evidence presented by GATA, the Miles Franklin blog and countless others over the years.

Fortunately, as you note, gold (and silver) supply are finite - and all signs point to such "finality" being at the verge of being realized.  Remember, we don't "invest" in PMs, but "save" in them for the long-term.  Personally, I think the "long-term" will be a lot shorter than most can imagine; but in the meantime, my metal just sits and waits for reality to re-emerge as it always does.

David Schectman

Today's Featured Articles

LeMetropole Caf� (Why Worry About Bullion Silver?) (Gold price touches five-week high of $1,250 as Indian religious buying forecast to almost double this season)

Jim Sinclair (Russians and Chinese are ditching the dollar as Europeans start using renminbi in their reserves) (Forex-Rigging Fines Could Hit $41 Billion Globally: Citi)

Zero Hedge ("Anti-Petrodollar" CEO Of French Energy Giant Total Dies In Freak Plane Crash In Moscow) (Santelli & Schiff: "A Messy Exit Is A Given... Ending QE Will Plunge US Into Severe Recession") (First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45%)

Bill Holter

Benefit Of The Doubt

October 22, 2014

The argument of "stock versus flow" has been debated from many angles and across many asset classes.  The most heated may be in the gold and silver bullion categories.  I've written on this topic before and I'm sure I will again but for this exercise I want to talk about U.S. stocks.

Zero Hedge put out a piece on Monday reporting that JP Morgan says liquidity has dropped 40% in the S+P E mini contract.  The study looks at "depth" of both bids and offers, this is now drying up, in fact, the ramp upwards was performed on continually lower volume.  Not exactly a confidence builder as volumes dried up out of, well, lack of confidence.  Without spending a whole lot of time on this, suffice it to say "liquidity is the blood of life" as far as the markets are concerned.  Without it or when liquidity decreases, accidents tend to happen.  "Accidents" in this case are when the markets move violently which affects a good part of the $1.4 quadrillion in derivatives.  Big moves in either direction can affect the standing of these derivatives as for every winner there is a loser.  The problem arises when a loser is so crippled they cannot perform (pay) on their losses.

The above is a very basic synopsis of the "what," the important thing right now is the "why."  Why is volatility increasing?  Why has volume and liquidity decreased so much?  There are two basic reasons, first the global economy is slowing at a time when debt is a bigger percentage of financing than ever.  Debt service must be paid whether good times or bad.  It just happens that right now we are seeing a global slowdown which leaves less free cash flow available whether it be a sovereign, corporation or individual ...money is tight so to speak.  Secondly, the Fed has reduced their "free money spigot" called QE by $75 billion per month down to only $10 billion per month.  This is slated to drop to zero next month.

I guess the best way to explain this is the financial system got "used to" an extra $85 billion per month sloshing around.  By no longer providing this, the Fed, even though not actually tightening credit conditions ...are tightening credit availability.  What we now see happening is the economy must stand on its own without any help from the Fed, it's not working very well and this is what the markets are telling us.

Shifting gears just a little bit, we recently saw as a reaction to the lessening QE, a stronger dollar.  Scared capital sought safe haven and did so into the dollar out of "habit" because that's the way it's always been.  Fear capital has always (during our lifetimes) fled into the dollar because the U.S. had a history of a strong rule of law and stable politics.  Do we still have a strong rule of law?  Are we politically stable as we once were?  I personally don't think so but this topic is for another day.

What I think we will soon see is this "fear capital" will soon leapfrog the dollar altogether and arrive as a bid into gold and silver.  Gold and silver have no "politics" and the rule of law is "whoever possesses it holds value."  Simple right?  Yes, but think this through all the way.  We are headed through the gates of hell if (when) the Fed must announce another round of QE.  QE is pure monetization, deep down everyone knows (and have known all along) that QE will not work and is nothing more than printing money out of thin air.  It hasn't worked, it won't work and it can never work.  All it did was buy "cover" or time in the hopes of something coming along to magically fix the mathematically unfixable problem.  

The "problem" as I have said all along is one of solvency rather than liquidity.  This I believe will be understood whenever the next QE is announced.  The "solvency" I am talking about here is that of the Fed and the U.S. which is why the "safety" of the dollar will be shunned on the next go round.  I wrote years ago that "all roads will lead to gold and silver."  This is as true today as when I first wrote it back in 2008 ...with the exception the "road" is now much much shorter!.  The road is shorter because every "tool" in Ben Bernanke's (now Yellen's) toolbox has already been taken out and used ...to no avail.  People "wanted" to believe they would work because of the alternative if they did not.  The Chinese were content to sit back and let us play the paper games while they filled their vaults with our gold, how much do you suppose is left?  You will know the answer when one day our markets do not open for "business as usual."  No tools, no White Knights, no flight into dollars ...no more "benefit of the doubt."  We have lived in a "benefit of the doubt" world for quite some time, once this runs out, capital will arrive to that last asset standing of no doubt ...real money.

Changing Of the Guard

October 21, 2014

When we wrote the world is "coming apart at the seams" last week, we weren't kidding! Watching Western "manipulation mechanisms" blatantly attempt to prevent universal realization that we have arrived at "2008, with one temporary exception," it could not be clearer how close the end game is to arriving in full force. Yesterday, for example, as global stocks and sovereign yields plunged to new 52-week lows, the U.S. manipulators came in with a vengeance - at the same 10:00 AM EST "key attack time" as usual; i.e., when physical precious metal markets close and the Fed executes its daily "permanent open market operations." Subsequently, gold was stopped by a prototypical "Cartel Herald" algorithm at its month-old "line in the sand" at $1,250/oz.; whilst the "Dow Jones Propaganda Average" reversed a 100-point decline via equally prototypical "dead ringer" algorithm; and, last but not least, the Fed instituted its "new Hail Mary trade" - of boosting plunging yields to prevent universal realization of the "most damning proof yet of QE failure." Commodities and currencies crashed nonetheless, and not a shred of positive news was to be seen. Only propaganda as far as the eye can see, such as this horrific sign-of-the-times - of a President lying in Orwellian fashion.

Clearly, market manipulation has taken an exponential step forward on its inevitable crash course with catastrophic failure. The moral hazard created is simply astonishing; as just before October's carnage, the remaining "hedge bombs" were more equity-long that at any time since the 2007 top - at valuations challenging their highest ever, amidst the most dangerous geopolitical, economic and financial environment in decades.

Zero Hedge

By early this morning - again, with no news of note - yesterday's PPT failures were in full view for the world to see. European and U.S. stock futures were plunging anew, the benchmark 10-year Treasury yield was again down to 2.15%; and gold had again breached $1,250/oz., having avoided the " 2:15 AM" raid experienced on 90% of all trading days. But then, "magically," another "rumor" saved the day - that the ECB was not only monetizing sovereign and mortgage-backed bonds but considering corporate bonds as well. Frankly, I could not think of a more insane idea - or moral hazard - particularly as corporate bond yields have already been taken to record lows by Central bank rate repression.   I mean, what are they going to do that hasn't already been done already - buy bonds of Portugal's Espirito Santo? The "rumor" was immediately refuted, of course - but not until the aforementioned trio of "manipulation operatives" did their dirty work. The chart below of Germany's DAX index depicts the German time zone; and thus, all three charts equate to 3:00 AM EST - which, FYI, was the Cartel's standard "key attack time" until it "backed up" to 2:15 AM two years ago. Yeah, I know, markets can't possibly be rigged. So I guess that the estimated $41 billion of bank fines for market manipulation are just a figment of our imagination?

Which brings me to today's very important topic, as memorialized by four side-by-side MSM "top stories" yesterday morning.

Which brings us to our main point - that not only is "de-dollarization" rapidly draining the cancerous dollar's "reserve status" but America's lack of global competitiveness, declining entrepreneurship, and socialistic embrace has accelerated this inevitability exponentially. To wit, it's one thing when its largest most iconic technology company - IBM - impales itself on the altar of financial engineering (MUST READ article by David Stockman). However, we are talking about a "parade of failure" from a broad list of America's top companies, including last month's earnings horror from Amazon.com, last week's from eBay and Wal-Mart, and today's from McDonalds and Coca-Cola.

In July's "need versus want, demand is dying," we wrote of how not only are "want" vendors like Amazon.com are suffering dramatic sales declines, but "need" purveyors like McDonalds and Wal-Mart - the latter of which, sadly, actually cites government reductions in food stamp payments as a significant contributor to revenue weakness. However, given the ongoing parade of corporate titan's falling off the wagon, even the most jaded propagandists are having trouble citing "non-recurring issues" - like food stamp reductions, "the weather" and others.

Clearly, a slew of coalescing factors are contributing to the American corporate decline - not the least of which, as directly cited by Coke this morning, is the "strong dollar" we have screamed for months about. As we predicted, the Fed itself warned of the ramifications of a strong dollar in their (retroactively doctored) FOMC minutes last week as it strives to "win" the unwinnable "final currency war." Effectively, multi-national corporations are negatively impacted by both "strong" and "weak" dollar movements, in what we deem the "single most precious metals bullish factor imaginable." In other words, extreme currency volatility - the hallmark of fiat currency regimes - is catastrophic to corporate earnings (and planning). And thus, until real money returns, they will continue to be enveloped by this horrifying financial storm.

The fact that WMT, MCD and KO are all components of the Dow Jones Propaganda Average only increases PPT stress - stacking the odds further against their ill-begotten, world-destroying plans. As noted yesterday, the world's greatest debt enabler - Visa and most notorious financial mobster - Goldman Sachs are now the two largest representatives of America's most prestigious equity index. And if that doesn't describe how rapidly the "guard" is changing - for the worse - we don't know what does.

Actually, we do - as the global secession movements resultant of decades of financial repression gain momentum. Last month's Scotland independence referendum was just a "shot across the bow" - to be revisited November 9^th when Catalonia, Spain votes whether to secede from Spain, taking with it a quarter of the hopelessly socialist nation's tax revenue. And don't forget the rapidly approaching date of potential destiny, November 30^th - when Swiss citizens vote whether the Franc should be re-linked to gold to the tune of nearly $100 billion worth at current prices.

To that end, given this morning's headline - while simultaneously, the GLD ETF's inventory plunges to a multi-year low - you can bet TPTB are in near panic mode.

Yes, friends, a "changing of the guard" is indeed at hand. If the Swiss do in fact vote "yes"; mark our words, the big bad "New York Gold Pool" will immediately suffer the fate of London Gold Pool in 1968, and all other efforts to suppress real money throughout the centuries. And thus, we ask, do you want to be on the right side of this generational trade - or the wrong side of history?

10/21 Gold/Silver POP / Off To New Orleans - www.lemetropolecafe.com

Why Worry About Bullion Silver?

Jim Otis

After reading somewhere that bullion silver might become unavailable in a future shortage, someone asked why worry about bullion silver since there is plenty of more refined coins and bars and other silver items that could be melted for use in industry. My response: 

I have heard the repetitive noise your new drum makes, but it is not music to my ears. The byproduct factor in silver is not new. It was noted by many people even before it was prominently discussed in September 2005 ( When Will the Price of Silver Explode?). I mentioned the byproduct situation several times over the past few years, because I see it as a huge positive for the very high price that silver could explode to when a slowing world economy forces base metal miners to reduce their mining output. It is the silver produced as a byproduct that prevents a silver shortage from being obvious. I expect an explosive price rise when the amount of that byproduct is reduced and the veil of just in time supply of byproduct physical silver is lifted from the eyes of industries that consume silver, as well as from investors who do not yet see the delivery problems that will become obvious to all in the future.

 

A different person read about the byproduct "news", and said it will cause him to be more cautious with future purchases. I responded:

 

Sorry, but that dog does not hunt. During the decade from 2000 to 2010, third world nations (China, India, Mexico, and others) were massively building their production industries in an effort to ramp up their economies. That rapid buildup created an immense demand for base metals, and the base metal miners responded by substantially escalating their mining output, including the amount of byproduct silver they dumped onto the market. So how did all of that byproduct silver affect the price of silver during the decade? The price increased from approximately $4.30 in 2003 to $8 in 2004, from $6.60 in 2005 to $14.30 in 2006 to $21.40 in 2008, and from $8.40 in 2008 to almost $50 in 2011. Those price increases were all during the unprecedented industrial buildup in several nations. That buildup consumed huge amounts of base metals, so the miners also generated massive amounts of byproduct silver. Fast forward to now. With the world economies slowing under heavy debt loads, and with the industrial growth rate in China and other emerging nations slowing to much smaller increases, the now mature emerging market industries do not have the rapid growth pattern that marked the decade of 2000-2010. Reduced growth rates directly diminish the demand for base metals, and base metal prices are lower as a result. It is only a matter of time until base metal miners cut back further on their production, and that will also reduce the amount of byproduct silver produced. Meanwhile, silver consumption continues to rise as the newly affluent workers in the emerging nations improve their lifestyles by purchasing things that consume silver to produce. Reduced supply and increased demand will tip the scales to an obvious delivery problem. The resulting silver purchases by industries and investors will be unprecedented, with a price rise that will be legendary. YMMV so DYODD

 

The conundrum of rising mining costs, but low silver prices

 

I see a simple explanation for that conundrum. There has been ample physical silver produced to satisfy all buyers of physical silver. With plenty of physical available, the Banksters have no restraint on their illegal manipulation and suppression of the price of silver. That ample supply of physical silver came, not from primary silver mines, but from byproduct as base metal mines maximized output in response to inflated prices and speculative demand for base metals. But times, they are a changing. China has finally taken steps to reduce some of the speculative excesses there, and an ever-deepening worldwide recession is adding to a glut of base metal in storage. Dr. Copper prescribes lower prices for base metal, and lower production rates are sure to follow. Reduced production of base metals will also reduce the amount of byproduct silver that is produced, and that in turn will curtail the currently ample supply of physical metal. IF demand continues as strong as it has been, and IF the reduction in supply of byproduct is sufficient to substantially reduce the amount of physical silver supplied to the market, then Banksters will no longer be able to control the price and a price explosion will follow. "When?" is always the question.

 

The plunge in copper can push silver higher

 

Dr. Copper has a new prescription, and it does not look bullish for some markets, but I continue to think silver will be an exception. The recent price plunge in copper will translate to reduced output from copper mines, and probably also from mines of other base metals. Since approximately 70% of new silver production is byproduct from base metal mining, the supply of new silver will drop sharply along with the reduced base metal mining output. As other factors continue to push the demand for silver higher, at the same time that the supply of silver drops, the resulting higher prices will create a vise to squeeze the silver shorts. The timing is uncertain, but I think accumulating silver below $25 will prove to be very profitable.

 

Here is the copper chart through 3/11/2014

 

Silver-Phoenix500.com

Could hyperinflation be imminent?

Someone asked why buy gold and silver when there is no inflation and hyperinflation seems impossible? Here is my reply:

I see things as unchanged (except for being worse) from June of last year:

Optimist: My view is that low velocity of money is much like a dam (operated by banksters) that is releasing only a small amount of water. Even though the FED is dumping massive amounts of water behind the dam (so that the water level is rapidly rising), the farmers downstream are complaining about a deflationary drought because they see so little water being released. That will change in a New York minute when the dam breaks or the banksters open the floodgates. All those who are complaining about deflation need to have their silver and gold life raft inflated and ready to use quickly when it is needed.

Another appropriate analogy is a mountain range covered in an unstable level of very deep snow (US$), and the FED keeps dumping more "snow" on top every day. An avalanche is inevitable. The question is when a trigger will begin that avalanche. That trigger could be imminent. Over the next three weeks, rampant rumors of a USA debt default (resulting from a failure to raise the debt ceiling) will reverberate around the world with increasing intensity. If there was a true debt default from a politically paralyzed USA government, the US$ exchange rate would plummet compared to more stable currencies. Nations and individuals who hold dollars will be pressured to dump them in advance of the potential debt default to salvage whatever value they can before everyone else tries to squeeze through the small $ exit door at the same time. The US$ exchange rate is already down significantly, and everyone knows that it could literally waterfall to much lower levels. It would take only one nation (or perhaps just a few wealthy individuals) to panic and be the first to dump dollars to trigger the avalanche.

FWIW, I do not think a debt default will happen. My guess is that if Congress remains uncooperative, the President will unilaterally declare the debt ceiling to be null and void (by virtue of the 14th amendment), so the FED can continue to print as much new funny money as needed to buy everything the government wants to spend money on. But it is of no consequence what I think. If big money panics to dump dollars before a possible debt default, then the potential exists for the rest of the world to pile on and for the US$ to quickly move to its tiny true value. When that feeding frenzy of $ selling at any price begins, it will be impossible to buy a lifeboat of physical precious metals. For the sake of those who are not fully invested in advance, let's hope that the dam will not break and the avalanche will not start this time.

Do the FEDanksters want metals prices to rise, but slowly?

In response to a comment that a correction could happen over the next few weeks, I said:

That is close to my Wild A$$ Guess. Metals could extend this rally for a few more days, but then I expect that the banksters will step on silver again, just in time to rain on the parade of anyone who is thinking about taking delivery of the September contract. My conspiracy theory is that the banksters are no longer as much focused on making profits, but now they are more concerned about managing metal deliveries.

A follow up question was why would the banksters have recently gone long metals if they plan to further suppress the price, and I replied:

My guess is that the banksters are acting in collusion as agents of the FED (which is why the banksters are never punished for the things they do), but that the FED keeps them on a short leash. My new and original (Google cannot find it as ever used before) term for the FED plus the banksters is FEDanksters. Although the past bankster actions to suppress metals prices have been profitable, that bankster profit was serendipitous to the FED's agenda to support the dollar by depressing metals, which are the only real competitor to the dollar. In theory, metals depression could have continued much longer, and driven prices much lower, but the FED is alarmed by the dramatic rise in accumulation of real metals by nations and investors. My guess is that the FED now wants metals prices to rise (so that higher prices will discourage physical accumulation), but at a slow pace to control the level of bullish enthusiasm that rapidly rising prices would generate. If that view is correct, then the FEDanksters have been accumulating metals into the decline, not to profit from the subsequent rise in metals prices, but to have ammunition they can use to sell into those rallies to control the level of bullish sentiment. I would be surprised if the FEDanksters press the short side hard enough to cause much lower prices. My guess continues to be that the FEDanksters' new game plan is to allow metals prices to rise slowly over time, but to prevent prices from spiraling higher in a way that could get out of control. As one small data point, the JPM house account accumulated a large amount of silver by stopping (taking delivery) 82% of the July contracts tendered by the shorts. If JPM was intent only on making profits, then the way to do that would be to continue to accumulate at current low prices. Instead, so far this August (off cycle for silver delivery), the JPM house account has issued (delivered) 69% of silver contracts. That is consistent with a FEDanksters agenda to slow the rise in metals prices to dampen the level of bullish enthusiasm. For anyone interested in politicians and FEDanksters, it is good advice to ignore what they say, but watch what they do.

********

Courtesy of http://sitekreator.com/Optimist/optimist.html

Gold price touches five-week high of $1,250 as Indian religious buying forecast to almost double this season

Posted on 21 October 2014

Arabian Money

Local traders are especially bullish about the current season and say sales could double this year with gold prices lower than a year ago and the feel good factor of the new Modi government buoying consumers. That could mean a total of 200 tonnes of gold sold in India before the year-end, almost double the amount sold in the same months of 2013.

Pent-up demand

Jewelers have been stocking up. Bullion imports surged by 450 per cent to $3.75 billion last month. In May the new government eased import controls to allow more trading houses to bring in gold. That goes some way to make up for the loss of global demand for gold from exchange-traded products where holding have dropped by around $13 billion this year.

Demand in Asia has fallen in 2014 after accelerating last year as global prices dropped 28 per cent in the worst correction since 1976, the one that came before an eight-fold increase in gold prices. Consumption dropped 16 per cent in Q2 to 963.8 tons, according to the World Gold Council, with India back as the biggest consumer of gold.

China was the top buyer in 2013, but its demand in the three months through the end of June fell 52 per cent to 193 tonnes, compared with 204 tonnes bought by India. There is a lot of pent-up demand due to recent import restrictions and the tax on gold, say traders.

Gold bears

However, many commodities' analysts remain firmly in the Goldman Sachs bear camp and think a higher and higher US dollar - as interest rate rises come closer - will be bad for gold prices as it makes the opportunity cost of holding gold higher, and gold is negatively correlated to the greenback. Who knows really?

The dollar may have just reached a peak and gold a low with its triple bottom. Currency markets are notoriously difficult to call and small-time Forex traders lose as predictably as gamblers in a casino. Investors could also be worried that something is seriously wrong in global financial markets and gold is a safe haven without counterparty unlike bonds or stocks or paper money.

In that case the Diwali buyers of gold have really seen the light.

http://www.arabianmoney.net/gold-silver/2014/10/21/gold-price-touches-five-week-high-of-1350-as-indian-religious-buying-forecast-to-almost-double-this-season/

To read the full article, please subscribe to Le Metropole Cafe.com.

In The News Today - www.jsmineset.com

Posted October 18th, 2014 at 2:17 PM (CST) by Jim Sinclair

A step at a time on a path that will not be diverted from.

Russians and Chinese are ditching the dollar as Europeans start using renminbi in their reserves

by Simon Black on October 17, 2014
New York, USA

At present, US dollar accounts for roughly 61% of the world's foreign exchange reserves.

It's still a safe bet for most, not because the currency is actually strong, but because so many others are already so reliant on it.

Between those with reserves in and pegs to the US dollar, many countries have given their allegiance, and now have a vested interest in the health of the currency.

Due to this common interest, a sort of unofficial, involuntary alliance has been formed between them all.

Together, they're all playing along, pretending that everything is fine. If the dollar collapses, they're all screwed, so they've got to get each other's backs.

From the throne of the world's reserve currency, the Federal Reserve, with the power to print the US dollar, feels dangerously omnipotent.

They can get away with just about anything. For now.

The central bankers get to print dollars and spend them at current prices, before the stuff hits the wider market and diminishes its overall value.

More...

***

In The News Today - www.jsmineset.com

Posted October 20th, 2014 at 4:14 PM (CST) by Jim Sinclair

Jim Sinclair's Commentary

I am sure that a revelation of the mayhem in metals and currency would at least equal what is known now.

Forex-Rigging Fines Could Hit $41 Billion Globally: Citi

By Richard Partington Oct 20, 2014 12:48 PM ET

Banks could have to pay as much as $41 billion globally to settle probes into allegations traders rigged benchmarks in the currency markets, Citigroup Inc. (C) said today.

Deutsche Bank AG (DBK) is seen as probably the "most impacted" with a fine of as much as 5.1 billion euros ($6.5 billion), Citigroup analysts led by Kinner Lakhani calculated, estimating the Frankfurt-based bank's settlements could reach 10 percent of its tangible book value, or its assets' worth.

Using similar calculations, Barclays Plc (BARC) could face as much as 3 billion pounds ($4.8 billion) in fines and UBS AG (UBSN) penalties of 4.3 billion Swiss francs ($4.6 billion), they wrote in a note first sent to clients on Oct. 3.

Authorities around the world are scrutinizing allegations that dealers traded ahead of their clients and colluded to rig currency benchmarks. Regulators in the U.K. and U.S. could reach settlements with some banks as soon as next month, and prosecutors at the U.S. Department of Justice plans to charge one by the end of the year, people with knowledge of the matter have said.

Spokesmen for Deutsche Bank, Barclays and UBS declined to comment on the Citigroup estimates.

The Citigroup analysts made their calculations using a Sept. 26 Reuters report that the U.K. Financial Conduct Authority settlements could include fines totaling about 1.8 billion pounds. They derived their estimates for how high fines could go in other investigations from that baseline, using banks' settlements in the London interbank offered rate manipulation cases as a guide.

More...

"Anti-Petrodollar" CEO Of French Energy Giant Total Dies In Freak Plane Crash In Moscow - www.zerohedge.com

Submitted by Tyler Durden on 10/20/2014 23:10 -0400

Three months ago, the CEO of Total, Christophe de Margerie, dared utter the phrase heard around the petrodollar world, "There is no reason to pay for oil in dollars," as we noted here, and despite Western-imposed sanctions on Russia, Total is continuing to pursue a natural gas project in Yamal, a joint venture with Russia's Novatek. Today, RT reports the dreadful news that he was killed in a business jet crash at Vnukovo Airport in Moscow after the aircraft hit a snowplough on takeoff. The airport issued a statement confirming, "A criminal investigation has been opened into the violation of safety regulations," adding that along with 3 crewmembers on the plane, the snowplough driver was also killed.

Debris from the aircraft was scattered up to 200 meters from the crash site.

Continue reading on Zero Hedge.com.

***

Santelli & Schiff: "A Messy Exit Is A Given... Ending QE Will Plunge US Into Severe Recession" - www.zerohedge.com

Submitted by Tyler Durden on 10/20/2014 17:49 -0400

"Markets are slowly coming to grips with reality is not going to be as easy as everybody thought," Peter Schiff tells CNBC's Rick Santelli, noting the pick up in volatility across asset classes recently. What The Fed clearly does not understand, Schiff blasts, is that "you cannot end quantitative easing without plunging the US into a severe recession." Because of the Fed's extreme monetary policy and the mal-investment that flows from it, Schiff says, "The US economy is more screwed up now than it's ever been in history." Most prophetically, we suspect, Santelli agrees that "a messy exit is a given," and Schiff believes they know that and that is why QE4 is coming simply "because it hasn't worked and they can't admit it's been a dismal failure."

Continue reading on Zero Hedge.com.

***

First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - www.zerohedge.com

Submitted by GoldCore on 10/21/2014 08:41 -0400

First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45%

The first poll of how the Swiss people will vote in the "Save Our Swiss Gold" initiative on November 30th shows that the Swiss are leaning towards voting for the pro-gold initiative. 

Gold Initiative Poll Results -  20 Minuten

The poll had quite a large sample of 13,397 people from all over Switzerland who participated in the first phase of the 20 Minuten online survey on October 15. 

The poll shows that 45% approve the Swiss gold initiative and 39% are against. There are 29% firm yes voters and 28% firm no voters (see graph). The poll shows 16% are leaning towards a yes or are "more yes" and 11% are leaning towards a no or are "more no." 

20 Minuten or 20 Minutes in English, is a very popular German language free daily newspaper and online paper in Switzerland, published in a tabloid format and online.

The political scientist Lucas Leeman and Fabio Wasserfallen organized the survey according to demographic, geographic and political variables and it is weighted so that the sample corresponds as closely as possible the structure of the voting population according to 20 Minuten.

There are a lot of swing voters with 16% undecided and not wanting to commit themselves.

The poll suggests that the Swiss gold initiative remains tightly in the balance and may be much closer than is commonly expected.

Swiss Gold Reserves

Some have suggested that as this was an online poll, caution may be needed as the 13,397 people polled are likely to be more digital savvy and younger. However, it is still believed to give a good barometer of sentiment just five weeks before the poll and before there has been concerted campaigning by either side.

20 Minuten is distributed to commuters at over 150 train stations across the country. Since September 2004, the German language edition has been the most widely read daily newspaper in Switzerland, surpassing Blick. The audited distribution in 2004 was 329,242 (WEMF AG) and it had a readership of an estimated 782,000 according to Wikipedia.

The three key measures of the "Save Our Swiss Gold" initiative are the following:

• an increase in gold holdings of the SNB to reflect an allocation of 20% of total reserves (today gold accounts for 7.7% of total reserves)
• and a moratorium on the sale of Swiss gold reserves?
• the repatriation of Swiss gold reserves - some of which are believed to be in the UK and Canada

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