FDICLegendary gold trader Jim Sinclair has sent an email alert to subscribers warning that the FDIC is not sufficiently capitalized to sustain FDIC insured deposits for the coming bail-in, and boldly predicts that the FDIC will not pay in cash, but will rather pay in special issue US Treasury instruments that will be salable only over a 5 year period!
Sinclair goes on to state that the systemic risk is MUCH HIGHER in 2013/14 than it was at the peak of the financial crisis in early 2009, and that gold will now trade at NEW HIGHS.
Sinclair’s full alert is below:

Silver Buffs Generic Add2

 

From Jim Sinclair:

Bails-ins do not require a crisis to occur and can surface one bank at a time, spread out over years.

 

Too big to fail is no longer valid at all.

 

Those that are not already international will find it very difficult to navigate the hoops that must be crossed for a Westerner to open an account anywhere internationally. For those that cannot think internationally, think very local, smaller local banks that have not taken bail-out or TARP money.

 

Gold is for saving, especially now at these extremely discounted price. Gold is no problem now as it will trade to new highs.

 

The major situation is deposits above insurance levels in banks too big to fail. Those deposits are directly in harm’s way.

 

The next situation is your retirement accounts as targets for the IMF and governments to secure as fonts of capital into which to place sovereign paper.

 

The following situation is the FDIC itself which is not capitalized to insure the huge amounts of deposits it has undertaken from one to $250,000.

 

The idea that you can have multiple FDIC insured accounts at $250,000 and collect on all of them is a pure gamble on the goodness of the government’s interpretation.

 

To be convinced that SIPC can insure all the securities that they hold themselves out to do in a systemic problem is absolutely foolish and total nonsense.

 

The idea that the FDIC or SIPC will pay in cash is total madness in a systemic crisis. They will pay in special issue US Treasury instruments that will be salable only over a specific amounts of years, more than likely five years.

 

The chances of a systemic crisis have risen since 2009, not lessened because of the dependency of the Western world economy on constant QE plus accumulated QE.

 

The risk is higher than in 2009, not less in 2013/2014.

 

Sincerely yours,
Jim


2013 Gold Eagles As Low As $54.99 Over Spot At SDBullion.com!

2013 Gold Eagle

  1. http://www.detroitnews.com/article/20130717/BIZ/307170057#ixzz2ZPqc1o4u

     

    Bernanke says he is ‘not qualified’ to offer refinancing advice

    David Shepardson
    Detroit News Washington Bureau
    7 Comments

    Washington — Federal Reserve Board chairman Ben Bernanke declined to answer a question from a Michigan member of Congress that’s perplexing many homeowners: Should they refinance?
    So my question would be? Why on earth our you purchasing 85 Billion a month in MBS if you don’t know?

    From The Detroit News: http://www.detroitnews.com/article/20130717/BIZ/307170057#ixzz2ZQ8nRIIZ

    • Bernanke is correct.  Answering that question requires that an adviser knows a LOT about the finances of a particular individual and whether or not refinancing makes sense in the context of that person’s individual financial info.  Answering this question could EASILY be “yes” for one person and “no” for another.  
       
      If what the senator was really asking is.  “Are interest rates heading higher or lower?”, then he should have asked that question.  It would not be answered either because Fed chairmen do not telegraph interest rate moves via Q&A in congressional testimony.
       

  2. http://www.nytimes.com/2013/07/19/business/fed-chief-again-declines-to-set-timetable-for-stimulus-end.html?ref=us

     
    <nyt_headline version=”1.0″ type=” “>Fed Chief Again Declines to Set Timetable for Stimulus End
     
    WASHINGTON — Chairman Ben S. Bernanke of the Federal Reserve said on Thursday that it was “way too early to make any judgment” about a potential decision to start reducing the central bank’s volume of asset purchases in September.

  3. peachy just freakin’ peachy.   If your funds in excess of $250,000 are replaced with the stock of a failed bank, the funds below that amount are replaced by POS treasury crap that can’t be traded in for 5 years?  Sounds just fine to me.  I’ll take those treasuries and trade them for groceries and gasoline.  the FDIC presently has 9 billion in cash and a $50 billion line of credit.  That’ll be more than enough to bail out one small bank.  Hah!   Let’s see a biggie goes toes up.  got phyzz?

    • One could also ask a rather fair question along these lines, such as “WTF do you have $250k in cash for?”.  This is one of those things that can happen when someone sells a home or a business or gets a lump sum insurance or retirement distribution.  It looks a lot like inertia, though, when one simply keeps that money in a bank somewhere, rather than using it to invest in something with long-term profit potential.  PMs come to mind here but so does a productive business or land.
       
      Whatever the FDIC has is probably irrelevant.  There is no doubt in my mind that the person running the FDIC has the Fed chairman on speed-dial and can contact him directly for just about any amount that is needed by the FDIC to handle virtually any imaginable need.  There are some really big, ugly, and nasty problems out there in the financial world but this does not seem to me to be one of them.  I would be FAR more concerned about the stability and value of the US dollar and the UST bond… but maybe that’s just me?
       
      “got phyzz?”
       
      Yep… in good and continuously growing amount.  :-)

  4. http://www.latimes.com/news/world/worldnow/la-fg-wn-greece-public-employees-20130717,0,2793913.story

     
    Greece handing pink slips to more than 25,000 public employees
     
    ATHENS – Bowing to pressure from international lenders, Greece on Wednesday moved to put more than 25,000 state workers on notice for dismissal by the end of the year in the first official winnowing of its costly civil sector.

    The legislation, backed by 153 lawmakers in the 300-member Parliament, was needed to unlock rescue funds and ease fresh fears of fiscal derailment in the bailed-out country.
    The workers will be given an opportunity to find other public employment, so the plan does not necessarily mean that all those who receive notice will lose their jobs.

    • They need to declare Greece a “government free zone” and get on with their lives.  It is likely that Greece would soon be wealthy and prosperous if it did not have the giant wealth-sucking presence of government smothering everything in that country.  This is what happens when government grows like cancer cells, multiplying WAY beyond the minimal amount needed for basic order and the country’s ability to support it.  It is bad enough that Greece has more government than it needs, it also has the EU government romping and stomping all over it as well.  This is just what they do not need to resolve their current financial issues.

  5. Jesus Saves….Moses Invests…now where was I? Oh yeah…:Who has any money to save? Retire? I’m 61 and doubt I will ever. International? Sure!! I hold Australian, British, Austrian. Chinese, Mexican, Ame-Rican (banana republic) and I just got some cool rounds from Surinam. The rest of my Silver is in the bank…as in the bank of the hill underground safely stored in crystal and galena.

    • “…safely stored in crystal and galena.”
      Galena, did you say?  I once knew a beautiful, leggy Russian girl named Galena.  But I digress…
       
      Back to the topic of saving, investing and retirement.  What is the definition of retirement, anyway?  For me – it means kicking the day-job to the curb…feeling secure enough with my other savings that I am comfortable doing this…having more time to spend with my family and enjoy myself…bringing in an earnings stream through growing & selling produce grown on my land, buying & reselling things, and working a few odd jobs.
       
      There are alternative ways of living which can provide more satisfaction than the standard 9:00 – 5:00 weekday grind.  To some degree, we are the ones who hold the keys to the prison that we are living in.

    • Jesus Saves; Moses Invests…
      Leggy Russian girls  
       
      :D
      Lots of Smiles in these two posts!!! 
      MAKES MY DAY!!!
      Now here is a funnY from my archives…

    • “To some degree, we are the ones who hold the keys to the prison that we are living in.”
       
      Agreed, Mammoth.  But that darned cell is just soooo comfy!  lol
       

  6. Just in
    The financial manager who reported a month or so ago of the costs of Detroit’s financial situation has just filed Chapter 9.  On another Sinclair post it’s noted that pension recipients could see 90% loss in their pension plans and income.  Not good.  This is pretty big and the blowback to DC and TPTB may force some sort of bailout for the unions and public pension plans.  The total due bills that probably won’t be paid is something on the order of $11 to $20 billion.  Ooh Fah   I do have sympathy for the people who believed their leaders.  90% lost of income in a city that is already down and out will be a huge burden on the city, relying as it does on people who are not in the work place.

    • More on Detroit’s bankruptcy filing:
      The deal gives the city access to $11 million a month in casino tax revenues that Orr has said is key to maintaining city services while negotiations, in or out of bankruptcy court, take their course with other creditors and unions.”
      -  -  -  -  -  -  -  -
      Are they F* kidding us?  Has Detroit sank so dar into debt that tax revenue from Casino Gambling is the only thing that is keeping the basic city services from being cancelled?
       
      You can’t make this shit up!

    • @AGXIIK
       
      “On another Sinclair post it’s noted that pension recipients could see 90% loss in their pension plans and income.  Not good.”
       
      No, that is not good at all.  But it is sure making those who chose a lump sum payout rather than an annuity look like effing geniuses.  My wife has a WA state pension for her 30 years as a public school teacher / administrator.  When she retired in 2001, we took out all of the money that she had contributed to her plan and rolled it into an IRA, leaving only the money that the state had contributed plus earnings.  Since that time, this money has been invested in various mutual funds and ETFs at a brokerage of our choice.  It has more than tripled since then.  If, for any reason, her state pension is reduced or disappears altogether, we will be fine.  This is the reward for taking our financial future into our own hands, rather than leaving it to others to manage or mismanage as the case may be.  This is WAY too important to leave in anyone’s hands but our own.  We both took SS benefits early as well and for the very same reasons.
       
      “This is pretty big and the blowback to DC and TPTB may force some sort of bailout for the unions and public pension plans.”

       
      It is very likely that people in Detroit will receive some assistance with this from The Pension Benefit Guaranty Corporation.  They probably will not receive their full pension but they probably will receive 70-80% of what they should have received.  While this is quite a financial blow to them, it is not the “off with their heads” disaster than a 90% loss of their benefits would be.

       
      @Mammoth
       
      “Has Detroit sank so far into debt that tax revenue from Casino Gambling is the only thing that is keeping the basic city services from being cancelled?”
       
      Yes, they have.  Look at the videos of much of Detroit that are on YouTube these days.  The place looks a lot like some of the worst areas in Zimbabwe… and for pretty much the very same reasons!  Just wait until Detroit opens their official bordellos to assist them with their funding.  This is a long way from being over and done, so there is no telling how much lower they will sink.  Not that they have all that far to go before bottoming out, of course.
       

    • When Detroit’s emergency manager, Kevyn Orr, said he was going to explore options re the Lottery I didn’t think he meant he was going to be buying Lottery tickets in an effort to fund Detroit’s pension obligations.

  7. Copy that Mammoth   Wait’ll POTUS steps in and frogmarches the Pension Guaranty Benefit Corp to the scene to cover every cent lost.  The Detroiters have been playing ‘all in poker’ with the union pension funds for 40 years.
    The problem is that the banksters have helped themselves to that ‘fish’  and his bad poker playing skills and left the cupboards bare. No wonder they are trying to rely on casino revenues for a bail out.  Stupid people bad at math using money from  stupid people bad at math to bail out stupid people who are bad at math.  Sounds like a mathematics daisy chain. 
    I expect that just like Harrison County got the Morgue  to pay for their crappy bonds on the sewer plant, Holder will coerce the Detroit banks  to cough up a few billion in reparations to the homies.   oof fah

  8. Detroit has gone from a peak of 2M people down to 700K.  That’s a big revenue drop.
    And what’s up with the Debt Ceiling?  We hit it like 3 months ago, yet nothing has been done.  Like the government hasn’t spent any money in 3 months???
    October 8th.  Humpty Dumpty Time

  9. I hereby nominate my good friend, AGXIIK, for the great honor due him as a super-blogger of terrific well thought out info on this web site.  Henceforth, he too should be referred to as “the legendary” AGXIIK!  :-)

  10. Now EdB Let’s be reasonable.  Calling someone legendary is like calling them ‘stinky’  That handle stays for life.  Besides which, if my wife found out, I would never hear the end of it.
    BOP I caught your comment on ZH and the Detroit FUBAR.  Tellin’ it like it is to the homies.  Very funny
    Rockets  The serious business you caught on Young turks connects a very important dot.  I recall it was maybe a year ago when the gummint said ok to B of A shifting their Derivatives ‘bank’ to the retail customer side, exposing the FDIC to a bail out if the derivatives went sideways. 
    It is a mathematical certainty that if  they have $75 trillion in derivatives, more net worth than every person in the US combined, it’s no surprise that we now know when our government and the FDIC  agreed to  and snuck this change into B of A’s balance sheet..
    BAIL-IN of SIFIs like Bank of America are baked into the cake not. If their D Book goes toes up, the commentator is exactly right that the depositors and anyone else within shouting distance will be dragged into this mess
    MG Global’s stink-fest was clearly a result of Corzine and his CFO stealing the customer’s money through their own little defacto bail-in of bad bets on Greek bailouts and the business of trading these bonds.  When Greeks did not get bailed out by ECB and the 70%  haircuts were  executed, the trading value of these bonds went against Corzine et at, leveraged to the max as he was, trying to fix his incredibly bad trading record to date.  Doubling down on a pile of dog crap bet does nothing more than increase the pile of crap.
     He comes from a long line of banksters and politicians who expect and demand bail outs.  He didn’t get the expected bailout of the G bonds and lost all the customers money. He keeps his $600 million fortune and his manse in the Caymans
    The youg turk guy was spot on. The guy with the sign in the background was perfect.
      We get shafted and the banksters get off scot free. 
    Moynihan and his puppet master Boring Muffet, with the NWO and Obama-nation’s hands with their hands stuck up the ass of this  86 year old pervert, its  no wonder we have a puppet f***fest at B of A. 
    They reported over $4 billion in profits and the only reason they didn’t show a $200 million loss was that they marked their POS securities, bonds and mortgages upwards in value by $4 billion or so.  Hey, that’s a good trick if you can make it.
    Well ain’t that special.  And I think I’ll mark my home and car up 500% in value and rehypo those assets to everyone in the ‘vil
    I can do that can’t I?   Corzine was senator and governor.  I’m governor of Lake tahoe.  That should work.  RIght?
    The seriousness of this B of A fiasco is that $75 trillion is going to be shoved up our asses. The size of this is so big that it would suck up every penny of the B of A depositors money and every thing that FDIC could produce.  Even a  3% loss on B of A’s Deriv bank would be $2.5 trillion. That would screw B of A into the ground. 
    If Detroit is a mess, I’ve love to see how KLUMAC would respond when Buffet screams bloody murder and demand his $10 billion in B of A stock is made good.  That SOB drinks the blood of young children to stay alive.   I can only imagine how much of a government mandated blood meal he’d demand to get refunded the loss of B of A when it fails.  I know where that blood will come from.  That will come from us, starting with anyone how has a nickel with B of A.
     

    • “Now EdB Let’s be reasonable.  Calling someone legendary is like calling them ‘stinky’  That handle stays for life.  Besides which, if my wife found out, I would never hear the end of it.”
       
      Right you are, AG, and what better brand could a man carry than that?  And, as you say, it IS durable.  :-D
       
      As to your wife, I could always call her up and let her in on it directly… preferably while you are out on business.  ;-)
       

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