J.Sinclair


Yesterday, Nov 8, 2010, was a day I’ve awaited for 40years, since President Nixon shut down the last vestiges of the gold standard. Yesterday, at last, a respected member of the ruling classes called for a discussion to readopt a modified global gold standard as a lynchpin for the monetary system. Robert Zoellick, World Bank President and a former US Treasury official, says a new system is needed (as called for in HSL for 20 years), using 5 main currencies, with gold as the international reference point for future currency values. He wondrously said “Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.” I couldn’t have put it better and in fact I have put it in those exact words, as has Jim Sinclair and a number of free market analysts.
RZ said “The development of a monetary system to succeed Bretton Wood II launched in 1971, will take time. But we need to begin.” Amen, Mr Z and thank you! Also, thanks to the Financial Times for making this the leading page one headline story, despite their traditional aversion to gold. Ethics won! This story broke in the early AM Nov 8th and halted a correction that began in the gold price, after which gold rose to a new high. The story freaked out ruling politicians around the world who despise gold because it acts as a governor on government spending. After Nixon closed the gold window, government spending and deficits rocketed, as the data charts prove, from that exact moment. Germany, the US Fed, and Trichet of ECB all patted Mr. Z on the head, but said it’s not practical.
What would you expect them to say dear reader? They will fight a gold-linked system, but in the end they will give in, because the system is dying, fast, as the gold price reflects. How good a new system will be, whether it will have only a symbolic link or a strong one, can’t be guessed today, nor how soon. The gold price will tell us. My prediction on Bloomberg TV in Paris a few years ago was that “Gold will force a system change when gold hits $1,650, but that it might need $2,000 to bring a change.” That may still come true, because, as you see in the press today, most political leaders tried to discount Mr Z’s brave, but wise recommendation.
I shall frame this FT front page and hang it on a wall. It was a watershed day.
Harry Schultz
Breaking Interview: 
On a day when the DOW closed down 430 points after falling 1,000 points and gold closed up $33 to roughly $1,210, Jim Sinclair was kind enough to spend some time making sense out of what is happening in the gold and equity markets for King World News listeners.

Legendary Jim Sinclair known as Mr. Gold for his remarkably accurate timing regarding the gold bull market of the 70’s is the Founder of jsmineset.com and Chairman of Tanzanian Royalty Exploration.
Please click HERE for the interview

Jim Sinclair, CEO of Tanzanian Royalty Exploration Corp. and proprietor of JSMineSet.com, has just given an excellent and wide-ranging interview to Eric King of  King World News. They discussed the gold and dollar markets and the Federal Reserve’s effort to rig markets through management of perceptions and suppression of interest rates, among other things. The interview is about 35 minutes long and you can listen to it at the King World News Internet site HERE

Dear Friends,

I have sent you certain emails that I consider to be the most important communications issued in my career which started in 1958.

I am the son of the man that I consider to be the greatest Lone Wolf trader in Wall Street history, Bertram J. Seligman. He was a past master at his business and was naturally sensitive to market conditions. I apprenticed to him, learned from him and inherited some of his ability. But not all, however.

From this background of experience, understanding and sensitivity to the market the following flows.

I want to bring your attention to the following emails of note:

1. Said: “This is it.”
2. Said: “It is now.”

This communication is to inform you as of 2/13/09 that “It is totally out of control.” There is no longer any means of reversal of the beginning of the final phase of the downward spiral now solidly set in motion. For your sake, protect yourselves immediately.

Be prepared for disruptions in distribution common to hyperinflation.

1. You should have already distanced yourself from your financial agents. If you haven’t, you are headed for significant displeasure and strain.

2. Make sure you stay three months ahead on necessary items that could experience distribution delays such as prescribed medicine and preferred foods.

3. Even though real estate is far from a buy, if you can afford a second home outside of major cities it would serve a good purpose.

4. Own gold.

5. Consider that good gold shares of non-US companies incorporated in a non-US country, operating in a third country and traded on multiple exchanges are a means of money expatriation legally and in broad daylight if required.

6. For currencies, all you can do is own a spread held by a true custodialship wherever that might be.

Simply said, as of Friday February 13th, 2009 the situation is confirmed as being in “Out of Control” mode as this well engineered downward spiral enters into its terminal phase.

The root cause of this mess was profit and the degree of disintegration it caused in the pursuit of this goal was not anticipated.

The key event that set things in motion was when Lehman was flushed – all hell broke loose. The hell cannot be contained in any practical manner.

I seek nothing of you but the protection of yourselves.

Respectfully yours,

Jim Sinclair

Jim Sinclair has arranged for his colleague, commodity broker J.B. Slear of Fort Wealth Trading Co., to assist those who are interested in opening commodity trading accounts for the exclusive purpose of taking delivery of precious metals from the commodities exchanges and thereby helping to end their suppression of prices. You can learn more about this at JSMineSet.com, HERE

Sinclair himself has pledged to take delivery from the New York Commodities Exchange of hundred-ounce gold bars in every delivery month henceforth: “Take A Stand Against Comex Gold Price Manipulation

It is axiomatic that the most leveraged gold market most often (95 percent of the time) sets the price of any cash market. First derivatives (listed futures) command price.

This remains true as long as the COMEX warehouse of gold is NOT meaningfully depleted by long gold contracts by taking delivery from the exchange warehouse.

As long as an exchange maintains a warehouse that historically overwhelms historical demand for delivery, then the first derivative, the COMEX listed gold future, will be the primary cause of price.

Taking delivery from the COMEX warehouse is not an easy process, as the system is designed not to violate your contract but to be a world-class pain in the ass. The COMEX requires re-assays, assuming that you wish to re-deliver. This then places another raving pain in the ass in your way.

The COMEX market is effectively an international 24-hour market as there is no location where you cannot buy or sell a COMEX clone.

Cash bullion gold, as opposed to the semi-cash markets that non-USA banks trade, is the only totally private means of buying and selling gold.

As currency problems increase, first the knowledgeable public such as you clean out the coin market.

This is the first time that the international coin markets have been cleaned out everywhere. This did not happen globally in the 1970s.

Large gold bars are still available in major markets but the backup inventory is getting low.

As long as the COMEX warehouse remains adequate and large bars still are available, the paper market, the leveraged COMEX market, will rule the price.

Only with a decline in COMEX warehouse inventories and a rundown in large bar supplies of the cash market will the cash bullion market command the price of the COMEX futures market.

It was not the buying by the Hunt Brothers that caused silver to move above $30 into the $50 area but rather the universal belief that the Hunts would take delivery, which would deplete or exceed the COMEX warehouse supply.

The war between paper gold and bullion gold is a war to determine which will take command of the price of gold, nothing more, nothing less. There will be no two markets trading at different prices. All this battle is about is if the bullion gold market is going to take the lead in making the singular price away from the traditional axiom that the most leveraged market makes the price.

I believe that bullion, in these most unique conditions, will command the one gold price, making it hard to impossible to manipulate the gold price via the paper gold market, as is the practice every day.

* * *

Posted On: Friday, August 08, 2008, 5:30:00 PM EST

Been There, Done That

Author: Jim Sinclair

“My Dear Extended Family:

It is time to regroup, recognizing that nothing has changed. What we saw today in the seven trillion dollar a day global marketplace were hedge funds, black boxes and terrified longs all heading through the same door at the exact same time.

The door is big enough but can seem awfully narrow when panicked participants head for the exits at the same time. Like the entrance way to a good rock concert, however, the traffic can be equally as heavy in both directions.

Fear is an anomaly to witness. It appears as a stampede, with people kicking and shoving to get out of the same burning building. The awful truth is that there really was no fire – although perception is often worse than reality.

Ask yourself the following questions:

1. Are US banks more trustworthy today than they were on Monday?

2. Are you aware of a new problem called Auction Rate Bonds which are estimated at between $400 to $500 Billion? The Fed will have to pony this money up as the problem is focused on just those institutions that are already at the Fed Begging Bowl window. Logically, if they are borrowing to retain wiggling room, it is simple logic to understand the new problem is very much the Fed’s problem, which in turn is another problem for your kids to bear.

3. Do you really believe that because technicals are presently supporting the dollar it will regain its prior position as the universal Reserve Currency of choice?

4. Do you really believe that your retirement funds will regain the value that has been stripped away by all forms of Securitized Investment Vehicles?

5. Do you really believe that there is such a thing as global demand destruction in the energy sector as Asia keeps ticking at high economic levels?

6. Do you really believe that after the Olympics are over that China will collapse?

7. Do you really believe that Europe’s economic situation will be more severe that the USA’s? Have you noted that the USA had a rather good head start towards a severe recession?

8. Do you really believe that any currency is a better storehouse of value than gold?

9. Do you really believe that all the OTC derivative problems are now behind us?

10. Do you really believe that the credit market is loosening up enough to benefit credit-starved businesses?

11. Do you really believe that the public entities whose entire business involves insuring the value of debt instruments can really make good as bankruptcies increase?

12. Do you really believe that present inflation is demand driven?

13. Do you not know that the price increases now being witnessed are a product of monetary inflation for which increased interest rates render no effect?

14. Do you not know that the ECB’s action of leaving rates unchanged favors the euro over the dollar?

15. Do you really believe that the next move of rates in the US is up?

16. Do you really believe that all those central banks seeking to diversify out of the US dollar have changed their minds?

17. Do you feel certain that Israel will permit Iran to reach that point where a push of a button can incinerate its citizens?

18. Are you sure that Pakistan holds no challenge to life as we know it on this planet?

If the answer to all the above is yes then buy some cheap financials, sell all your non-dollar currencies and go long the good old greenback.

If you do not accept all the above as reality then be calm. As long as you are not on margin you have no problem.

The only result of this week’s market action may be to postpone gold’s ascent to $1,200 by 90 days. That is a big maybe, however.

I accept the responsibility of my words offered to you in truth to reinforce what is correct. Today was made difficult through the din of fear and the bullying of hedge fund fiends.

Respectfully,

Jim”

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