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wj

Good grief, not Rubio…no, no way, no how….no, no, no!  No bottom feeders wanted.

🙂

The Ides of March should be interesting with FOMC and primaries and usual market shenanigans.

Oil should be a good short early next week based on supply/demand fundamentals…

Ha Ha ….fundamentals, rim shot

Rubio?
wj

Broken Bazookas

Dear CIGAs,

“There is a tide in the affairs of men, Which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures.”
–William Shakespeare

First it was the Fed, then it was the Bank of Japan, now the ECB (and maybe even China). Mario Draghi finally let loose this morning with everything left in his monetary “bazooka” and gone as far as the Bundesbank will let him. He also has to face the BIS restrictions in the next three weeks which are far from certain to be in favor of his actions. http://www.zerohedge.com/news/2016-03-10/draghi-whips-out-bazooka-ecb-announces-surprise-refi-marginal-lending-rate-cuts-boos

Looking backward first, the Fed unsettled markets in mid December with a rate hike. Japan lit gold’s fuse in January with the announcement of negative interest rates. Today, Mario Draghi spent and fired his last shot, it will be seen as a blank. Now we will get to see what sort of reaction is received from the markets. Initially the markets went in the “favored” directions, that only lasted for about an hour. The Euro is again strengthening, gold going higher and stock markets have turned negative as if asking “now what? Do you have anything else”?

Before going further I want to break down what they are trying to do into its most basic form. Systemically (including Europe) the world ran into “debt saturation” back in 2007. The plan was to cure too much debt with …more and more debt. The “experiment” has not worked and will not work …and Mario Draghi just ran into a wall where this is it, he has no more room to “experiment”. No doubt this is being done now to try to support the Italian (Spanish and others) debt that has gone bad.

There is another little problem that few are talking about, the BIS. The Bank for International Settlements has warned Mr. Draghi not to go to this wall of negative interest rates and further outright monetization. The BIS has the ability to force Draghi to not only stop the madness but also reverse it. So not only are the markets asking “what’s next?”, it is also wondering whether or not the BIS will step in.

We also have another piece to add to this puzzle, China. They just announced they will http://www.zerohedge.com/news/2016-03-10/china-proposes-unprecedented-nationalization-insolvent-companies-banks-will-equitize begin to take equity stakes for non-performing loans via the banking system. “Nationalization” no matter what they call it. It had been speculated China would have to devalue the yuan in an effort to make their massive corporate debt payable and industry more competitive. I would suggest this is simply wiping out current debt in an effort to make room available to create more debt and to reflate. We will see how this works out but I do not believe this is any more credible than any of the other “serial reflators”.

Many times it is said “OK, so you see the problem but what’s the answer”? The answer is obvious and we will get to it after looking at the true problem. The world hit debt saturation in 2007, sovereign treasuries and central banks stepped in and sacrificed (destroyed) their own balance sheets in an effort to reflate. We know it has not worked and the global economy (pie) is no longer growing. The ONLY way for a country or region to “grow” is by taking an inordinate size of the pie and the only way to do this is by devaluing currency faster than your competitors.

The problem today is ALL currencies are competing against each other in debasing (devaluing). If you devalue too slowly you lose. If you devalue but not enough, again you lose. This is the problem with and misunderstanding of the USDX index, the currencies are all valued against each other and NONE OF THEM ARE REAL! The “answer” as it was back in 2008 is still the same, rather than race “against” each other THEY ALL need to collectively devalue! The only way to do this is to collectively devalue against “something” …and that something is what it always has been, GOLD!

A collective devaluation will do several things. First, it will create “inflation” and thus make the existing debt payable if the devaluation is deep enough. Business will get “reflated” and main street will actually participate in the better business conditions. Most importantly, for those nations who actually do hold gold, their balance sheet holes will be filled up and patched. Sovereign treasuries with gold will suddenly see their coffers filled. There is of course the problem of nations who either do not hold gold or have lied and no longer hold what they said they did. In this case, these nations become the world’s new “cheap labor” and begin to dig their way out via industrial/commercial production. This is a very long and hard process which also involves a huge drop in the standard of living.

Do I know what the level needs to be for gold to perform its function as central bank reserve? No, the number could be $25,000, $50,000 or $5 million or more, I do not have the answer. The biggest holder(s) of gold on the planet could simply “mandate” a price or do it via the physical markets over a reasonable period of time …but they will do this as it is the only viable solution.

We now have a situation where central banks have lost their credibility. This will lead to a loss of confidence in all things paper. Either the central banks revalue their balance sheets with a wildly high gold price or the markets will do this for them by voting with their feet so to speak. We are on the cusp of absolutely wild market gyrations and obscene price levels for gold. So obscene you will either be in or you will be out forever. Do not try to time anything, these last bazookas fired with blanks will be seen as a very large starting gun!

Standing watch,

Bill Holter
Holter-Sinclair collaboration
Comments welcome, bholter@hotmail.com

http://www.jsmineset.com/

South Africa mines dispute pits inequality against investors

A landmark South African court case that starts on Tuesday will ask a judge to rule whether the need to reduce racial inequality trumps shareholder rights.

The Chamber of Mines of South Africa is asking the High Court to back its view that the Mining Charter stipulates that companies should be credited with disposing of a minimum of 26% of their assets to black investors even if those stakes were later sold. The original charter agreed to by the government and the mining industry took effect in 2004. The Department of Mineral Resources updated it in 2010 to make the minimum requirement permanent.

“It is going to be huge — if the chamber loses, everybody who’s been disempowered will have to be re-empowered,” Andrew Mitchell, a partner at the Johannesburg-based legal firm Fasken Martineau, said by phone. “The shareholders are not going to like it because it means they’ll get rediluted again.”

cont. http://www.mineweb.com/news/mining-finance-and-investment/south-africa-mines-dispute-pits-inequality-against-investors/

“I just hope it isn’t Christy.”

Yeah me too!

Not likely, as Trump has expressed he would require someone with governing experience to guide him.  I just hope it isn’t Christy.

Maybe a good VP candidate?

Franco-Nevada Reports Strong Year-End 2015 Results and Provides Outlook

http://finance.yahoo.com/news/franco-nevada-reports-strong-end-211500916.html

Brazil prosecutors seek Lula’s arrest for money laundering

http://finance.yahoo.com/news/sao-paulo-prosecutors-charge-brazils-203848858.html

Detour Gold Reports Fourth Quarter and Full-Year 2015 Results

http://finance.yahoo.com/news/detour-gold-reports-fourth-quarter-221455643.html

Newmont Sells Stake in Regis for US$182 Million

http://finance.yahoo.com/news/newmont-sells-stake-regis-us-223600617.html

Guyana Goldfields Inc. Reports 2015 Year-End Results; Producing 35,901 oz of Gold of which 28,850 oz were Sold Generating $31M in Revenue and Earnings of $0.13 Per Share

http://finance.yahoo.com/news/guyana-goldfields-inc-reports-2015-230700212.html

Agnico Eagle announces additional investment in Belo Sun

http://finance.yahoo.com/news/agnico-eagle-announces-additional-investment-232000540.html

Pretivm Reports Fourth Quarter and Year End 2015 Results

http://finance.yahoo.com/news/pretivm-reports-fourth-quarter-end-021535025.html

Pretivm Announces Exercise of Participation Rights by Orion Mine Finance

http://finance.yahoo.com/news/pretivm-announces-exercise-participation-rights-100000841.html

McEwen Mining Reports 2015 Full Year and Q4 Results

http://finance.yahoo.com/news/mcewen-mining-reports-2015-full-110000872.html

Yeah, keep on printing boyz. Its a race to the bottom and throw in negative interest rates for fun.

I think the Central Banks have got it right actually. Print money and buy gold ! I can remember the days when Central Banks where selling gold. Stupid is as stupid does I guess. Glad to see they have reversed course and stocking up on the ounces these days. Hmmm….wonder what changed their mind??  Sell gold at 400….buy it back at 1200. Bright bunch they are. 🙂

Have a great one. ITS FRIDAY !!  YaaaHuii  !! Get a few chores done and head to town. Later, Farmboy

Ps) I see Moggy is tied up at the moment….oh wait…its YOUR cat. Well, I aint messin with the rat killer. I’ll just ride my bike to town.

Hey Farmboy….that is my cat…..We have an identical one.

They are Norwegian Forest cats. Normally black/grey and white, but some litters have those biscuit coloured ones.
Huge characters, as they were bred to kill rats on Viking Long Boats, so they had to be as tough as all hell, as the Vikings weren’t exactly known for their sympatico !!!!!!!

Sorry, I’m busy.

SM and Dollar bid, Pm’s offered……..only problem Scum have, is that they are fast becoming the only ones who believe.

I gather Draghi’s latest effort is less popular than a turd in the punch bowl, in Deutschland….Having a spendthrift Eyetie, in faux charge of a runaway printing press, aka the ECB. Knowing they are getting the bill, is the stuff of their worst nightmares in the Fatherland.

Still it’s good news for us, we should all send Draghi a keep well card.

I know it’s despicable what they got away with and did little to nothing for most of them while they went out and partied.

It not only irritates me that they took advantage of people that were devastatingly injured needing help and suckering people who are already struggling for the most part to donate but the slap in the face to how they the veterans they were supposed to help. Then thy try to get rid of anyone who cares.

They go there and get brushed off like they were bums looking for a handout instead of help. That’s what really makes me see red if you know what I mean. How they treated them an these veterans are looking at this while these adds are falsely representing them and since disabled they can’t do much about it. Mix to together really bad. So something had to be done.