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Jim Sinclair thread (News & Views)

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Posted On: Wednesday, October 15, 2008, 9:28:00 PM EST

 

Upcoming Events In The World Of Gold

 

Author: Jim Sinclair

 

 

 

Dear Friends,

 

There is one simple but extremely dangerous error being made by the man who is the world's greatest expert on the time period and economics of the Great Depression, Dr. Bernanke, Chairman of the Federal Reserve.

 

The Chairman is an expert on the history and consequences of that period. He is being guided by this deep knowledge, yet is totally oblivious to the consequences of the alternative actions he is taking to not make the same errors as the 30s. This is all in his attempt to prevent his president from going down in history along with other failed economic leaders.

 

The unprecedented creation of infinite dollars for the purpose of flooding the world's entire financial system is causing the birth an inflation of types unknown in a modern economy.

 

The test case for the CONSEQUENCES of present united central bank actions is the history of the Weimar Republic, but this time it is on a planetary basis.

 

CONSEQUENCES cannot be avoided by any means. They are economic equal and opposing forces. That is simple fact.

 

In an attempt to avoid what the Chairman see as consequences of incorrect central bank action in the 1929 - 1933 period, he is creating new and infinitely more dangerous, longer lasting, society changing, politically provocative new sets of unexpected economic CONSEQUENCES.

 

The only number that might compare to the nominal value of all OTC derivatives is a count of all the individual plankton in all the oceans of the world and then only maybe.

 

The world will never be the same because of the greed of these 29 year olds and the old goat bosses who sat at the long desk of the board of directors while looking the other way.

 

 

 

Upcoming events:

 

As a result of "This is it and It is NOW":

 

US exchanges will be closed. There is a chance all world exchanges will close down. Only gold and currencies which are planetary markets will continue to trade.

Retirement programs will not pay off.

Medicare and Medicaid will at best buy you a bandage or pay for 1/4 of a visit to a free clinic.

Social security, due to the massive upcoming inflation, will provide no security for any society.

Money Market Funds will not pay off.

A CD is a gift, but not to you.

Unified central bank action has a short life.

Central banks will soon revert to the strategy of everyone for themselves.

401Ks not self directed are headed for the toilet forever.

Exchange Traded Funds will not return the assets upon which it is based to you.

Sliver will demonstrate the fact that it is more industrial a metal than precious.

Silver is not a currency because it is simply too HEAVY to settle debts or to be universally fungible.

Silver performs best when there is reasonable industrial demand and distrust of currency. When this happens rounding up the gang and their money will have a lot to do with which party is elected.

Credit card companies are going to have to be bailed out.

GE Capital is a nuclear capable entity that has the capacity to take down the good old toaster and refrigerator manufacturer - SIGMA ZERO.

GE Capital is a huge OTC derivative dealer but somehow I do not recall that fact being discussed.

Gold is the only Honest Money because it has no liability attached to it.

Gold coins are the best way to own gold for the average investor.

When you select a junior gold, I would look for the highest quality, most bashed, highest short positioned, with real assets and real people devoid of pussy management. The situation is best if it is based in another country than the country you live in while doing business in a third and trading in multiple areas. The benefit is obvious.

Nobody ever did or will ever trade items as insurance. That is a form of madness.

At $1650 I will take my leave, having been with you to the point I promised.

The only place you will find me then is at my place of business on the ground or the web.

There is no question that gold will trade at or above $1650 by January 14th, 2011.

 

 

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Sliver will demonstrate the fact that it is more industrial a metal than precious.
I didn't know Jim was pessimistic about silver... May have a point here!

Silver is not a currency because it is simply too HEAVY to settle debts or to be universally fungible.
Eh? Like no ones ever used silver coinage or silver backed currency before then?

Silver performs best when there is reasonable industrial demand and distrust of currency.
Maybe...

When this happens rounding up the gang and their money will have a lot to do with which party is elected.
What?

 

 

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I didn't know Jim was pessimistic about silver... May have a point here!

 

Agree, Jim seems to have changed his tune on silver at the moment. I think it depends very much on time frame, silver lags gold but overtakes it in the end, I hope :blink:

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Agree, Jim seems to have changed his tune on silver at the moment. I think it depends very much on time frame, silver lags gold but overtakes it in the end, I hope :blink:

 

Yes, I thought that the other day when he said something like only gold will shine - not 'PM's' - ie. nothing about silver. The bugger. (silver and Jim)

 

Like Dan says on his site yesterday though, gold is standing up well considering the massive deleveraging going on - certainly when compared to commodities. Gold clearly is not (being treated) as a commodity too much - more as a monetary metal. Silver is also being treated as a monetary metal though too and may also be standing up comparatively well - considering it clearly is tied in with commodities to a greater degree and has a smaller, more volatile trading market.

 

Which effect will prove stronger - that's the question!

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Interesting points Sinclair makes here. If the Dow has a few more days like recently, they may indeed close the exchanges (AFTER the SWFs have gotten out and bought gold, of course).

 

Silver: Sinclair has always said that silver is a game, and gold the real thing. He is the ultimate gold bug, there is nothing else for him. I beg to differ. Silver will with a delay do most of what gold does in my opinion. Investment and speculation demand will by far overule any industrial uses if the (gold and) silver markets wake up for good (they're still in a sort of unstable REM sleep). My silver boat is fully loaded. Gold coins will soon seem to be too expensive for an average investor. They will scramble for some silver, especially in the final phase of the hypeirnflation, which might be many years away.

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Here is a posting from Jim today to clarify the comments to yesterdays post;

 

Silver will perform with gold.

 

My concern is that after $1200 in gold, silver may not keep pace with gold due to its industrial demand component.

 

That is 100% consistent with what I have said for years.

 

What I said is absolutely true, but you give it too much of a bearish interpretation.

 

I never in any way made a bearish prediction for silver.

 

I said be realistic as markets move up as what I told you, in my opinion, is correct.

 

All the best,

Jim

 

I think this means that he is trying to make readers aware that silver will start to overtake gold when it gets to $1200. He sure does speak in a confusing way sometimes. :D

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Interesting points Sinclair makes here. If the Dow has a few more days like recently, they may indeed close the exchanges (AFTER the SWFs have gotten out and bought gold, of course).

 

Silver: Sinclair has always said that silver is a game, and gold the real thing. He is the ultimate gold bug, there is nothing else for him. I beg to differ. Silver will with a delay do most of what gold does in my opinion. Investment and speculation demand will by far overule any industrial uses if the (gold and) silver markets wake up for good (they're still in a sort of unstable REM sleep). My silver boat is fully loaded. Gold coins will soon seem to be too expensive for an average investor. They will scramble for some silver, especially in the final phase of the hypeirnflation, which might be many years away.

 

 

always good to read what Jim Sinclair has to say

 

JP Morgan Responsible for the Destruction of the US Financial System

GOLD & SILVER AWAIT THEIR EXALTED STATUS

 

We are witnessing the disintegration cited in my recent forecasts. It is a systemic failure, marred by lost confidence and trust in the entire financial system. Expect foreigners soon to pull the rug from under the American syndicates in control. Several key meetings have already concluded, totally unreported in the US press, which occurred in Berlin Germany. Consider it the Anti-G7 Meeting. Implications are profound, and involved the Shanghai Coop Org tangentially, since its member nations possess so much new commodity supply. Consider it the Anti-NATO group. An important and powerful alternative financial system is soon to spring into action, including high-level bilateral barter. Those who expect the current US Regime to continue their financial terror are in for a big surprise.

 

Expect defaults in the COMEX with gold & silver, whose prices for paper vastly diverge from physical, to the anger of foreigners watching. They hold massive precious metals assets. Disparities now contribute to powerful forces, sure to break the current system. Grand systemic changes come. THE RESULT WILL BE A BREATH-TAKING DISCONTINUITY EVENT.

 

Ironically, the more inner anguish felt on the falling gold & silver prices, the closer we are to a new financial framework, with the US Dollar relegated to a Third World role. A REPLACEMENT GLOBAL RESERVE CURRENCY HAS ALREADY BEEN DECIDED UPON. Its launch awaits the proper moment. The Americans are last to know, as usual. The US leaders are under the illusion of being in control!

 

 

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Here is a posting from Jim today to clarify the comments to yesterdays post;

 

 

 

I think this means that he is trying to make readers aware that silver will start to overtake gold when it gets to $1200. He sure does speak in a confusing way sometimes. :D

 

I see this as him saying he thinks silver will under-perform gold after initially following golds rise. To be honest, I think the poor guy's under enormous stress and talks shite at times (or, at least, becomes unclear). Of course, people are going to interpret what he's just said as bearish for silver!

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Excellent analysis from Tom Szabo on why he thinks Jim is wrong on silver

 

http://silveraxis.com/todayinsilver/2008/1...ir-is-mistaken/

 

To my mind, silver is in many ways a leveraged form of gold, it will rocket up faster than gold often and othertimes will collapse faster than gold on corrections. There is of course some difference in that gold will perform better in a contraction than silver which of course includes some correlation with the broad economy

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I see this as him saying he thinks silver will under-perform gold after initially following golds rise. To be honest, I think the poor guy's under enormous stress and talks shite at times (or, at least, becomes unclear). Of course, people are going to interpret what he's just said as bearish for silver!

 

I think the industrial users will start stocking up as gold rises in price, so it is quite cryptic. Strange how we can both get different meaning from what he writes. Agree I think he has almost had enough due to getting emails like the one below!!!

 

On Oct 16, 2008, at 3:23 PM, John Regan wrote: jregan100@gmail.com

 

Mr. Sinclair,

 

I hope that you are pleased with yourself for having ruined everyone who has been a trusting reader of your website for the past 5 years. Look at the XAU!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! What the hell are you writing about?????????????????????? Do you have a clue???????????? NO ,you don't. Again I ask you to close down your website----you promised that you would if gold did not shine in 2008; not only hasn't it shined, there is nothing more tarnished on Wall Street other than your reputation.

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His comment on silver seems a bit ambiguous to me.

Silver will perform with gold.

 

My concern is that after $1200 in gold, silver may not keep pace with gold due to its industrial demand component.

Either:

Global recession -> reduced demand -> reduced price pressure for silver

(but most silver is a by-product of base metal mining, so supply could drop)

 

Or:

industrial demand + investment demand -> good like gold

 

Well, he did say silver will perform with gold, so maybe the latter. But then again "My concern is... may not keep pace" probably means the former.

 

How much was he into silver back in the late '70s?

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... How much was he into silver back in the late '70s?

I think he was gold only too. But he liquidated the Hunt brothers.

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The only number that might compare to the nominal value of all OTC derivatives is a count of all the individual plankton in all the oceans of the world and then only maybe.

Total cr@p. simply revalue the dollar to one atom of gold and the lot could be paid for

with a sovereign*, with plenty of spare change.

These dismal scientists have no concept of big numbers. <_<

ABB

 

*2.238x1022 atoms Au

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This is so funny. I went on a walk yesterday and had exactly the thoughts Jim Sinclair is expressing below. People need to take delivery.

Posted On: Sunday, October 19, 2008, 12:10:00 AM EST

The Bullion Market Versus The Paper Gold Market - An Explanation

Author: Jim Sinclair

 

Dear Friends,

 

1. 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) commands price.

2. 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.

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

4. 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.

5. The COMEX requires re-assays, assuming you wish to re-deliver. This then places another raving pain in the ass in your way.

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

7. 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.

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

9. This is the first time that the international coin markets have been cleaned out everywhere. This did not happen globally in the 70s.

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

11. 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.

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

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

14. 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 the 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.

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This is so funny. I went on a walk yesterday and had exactly the thoughts Jim Sinclair is expressing below. People need to take delivery.

 

Wow, that is an exceptional post from Jim :D

 

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Your first lesson in staying alive in the wilderness in an emergency is not to panic, not to wander, but rather build or find shelter from the elements before anything else.

 

Gold is insurance and is shelter in this wilderness caused by demonic OTC derivative manufacturers. A storm is coming that is so serious Weimar now cannot be avoided and might just be duplicated. What do you think the reaction to a market losing 700 points on the Dow is going to be in DC? The Fed and Treasury will manufacture dollars in amounts never contemplated by anyone. The discount rate will drop to negative percentages. The Fed begging bowl window will be open to all and every of the old boys clubs in the US or any other country without limits on the amount of electronically created dollars. Bailouts will from this minute forward cover all and every. That dooms the US dollar and calls for gold over $1650 no matter what the black boxes and their algorithms do tomorrow.

 

Gold is a currency, always has been a currency and will be the only currency as a result of the madness in creating dollars to infinite levels.

 

The good days of the Weimar Republic came to an end in the late 1920s, especially as the depression began to take a hold on the German economy. As a result the political situation became uncertain and dangerous. The genuine believers in the republic began to lose the battle against the enemies of the Weimar Republic from the left and the right.

 

The hyperinflation in the Weimar Republic was accompanied by an economic depression.

 

Your alternative plan sounds to me as if you would sell you gold shares for zip, and throw your insurance away, hoping to re-enter your insurance at $600.

 

In the meantime you would hold 100% with cash. I assume it would be in US dollars.

 

The sellers are all in the paper market for gold. They are comprised of black boxes, 29 year old hedge fund managers and gold holders that were never really convinced. Short sellers in gold can pound and pound just like naked short sellers in equities.

 

I have made my bet. I am neither looking at it nor bitching about it.

 

I know without any shadow of doubt that I am right so let the margin traders and constant whiners go to hell.

 

I have bought insurance. I am not staring at the insurance policy.

 

You are not nuts, just emotional. That is quite human and normal.

 

Think about all I have written today, and if you agree, man up, and stop looking at it.

 

If you do not, then bail out immediately.

 

Respectfully,

Jim

BTW, we know that these 29 year old traders take out mortgages at an 8-time multiple and then lose their houses 4 months later. I.e. they're f***ing stupid. So how much do we want to give on they're opinion about gold (which is manifested in the price at the moment)?

 

My answer: zero.

 

Gold = strong buy.

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Posted On: Wednesday, October 22, 2008, 1:07:00 PM EST

 

Insurance On Sale

 

Author: Jim Sinclair

 

 

 

 

Dear Friends,

 

Gold is a currency that you will see perform as the currency of choice. There is no doubt we are headed into a planetary Weimar experience to some degree.

 

Dollars are being created faster now than in any other period in history. The Fed and treasury are guaranteeing everything from money market funds to large corporate entities in one way or another.

 

The first valuation of worthless OTC derivatives via a public sale of these at .0875 to .02 cents shocked anyone with a brain. Now the downturn in business is hitting financial entities and shortly litigation will smoke whatever is left.

 

The FDIC is already yelling for additional and significant funding from congress as their capital contracts on every Friday’s bailout.

 

People expect things to return to normal in 2010. That is a fairy tale.

 

The Fed has only started creating money for bailouts. You saw what happened when they stepped away from Lehman. If you say you didn't look out the window.

 

All these bailouts and Federal guarantees on credit items constitute a white wash on a falling economic structure going out of control and soon.

 

The out of control point of major planetary dislocation is between 14 and 89 days from now.

 

 

 

INSURANCE ON SALE

 

Gold is the only viable insurance. The US dollar is not viable insurance because there is simply too much of it and that amount is growing every day. That makes the US dollar untrustworthy.

 

Gold is the only viable insurance. Clearly equities are not.

 

Gold is the only viable insurance. US Treasury bills are not because the yelling at all the rating agencies in Washington today just might get US credit downgraded.

 

General commodities have been viable, but by nature they are too wild and from now on will be selective until Pakistan implodes and Weimar appears

 

Banks cannot offer insurance as they are in the main bankrupt.

 

Insurance companies cannot offer you sound insurance.

 

Money market funds are not insurance, making gold the only viable insurance.

 

Retirement programs are no longer insurance.

 

Jobs are no longer insurance as companies are run by lawyers and accountants.

 

Equity in your home is not insurance because it simply does not exist.

 

Your family is no longer insurance because they have the same problems you do.

 

The assumption your kids will take care of you in your old age is not viable insurance no matter what you think.

 

Gold has no liability attached to it and is therefore the only viable insurance.

 

Gold is universally exchangeable, making it the only viable insurance.

 

Gold has historically performed perfectly in maintaining buying power, making it the only viable insurance.

 

Gold is the only viable insurance because it is Honest Money.

 

Since gold is the only viable insurance and because everyone needs it, gold will trade at levels of at least $1200 and $1650.

 

I could go on but gold is all there is that will protect you from the White Wash being applied by the Fed and Treasury on a structure that is in fact in a free fall.

 

I am not the least concerned about gold and believe you should not be either as long as you have no margin and understand what gold really is: a currency and an insurance policy. There is no other viable insurance in this most unusual situation.

 

Please review the Formula as the US Federal Budget is going ballistic as the TIC report contracts like a turtle into its shell.

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The out of control point of major planetary dislocation is between 14 and 89 days from now.

Does everyone else also think that Jim Sinclair refers here to US Treasuries dislocation, i.e. a kind of Minsky Moment for the US as outlined in Denninger's articles? Or what else could he mean?

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Does everyone else also think that Jim Sinclair refers here to US Treasuries dislocation, i.e. a kind of Minsky Moment for the US as outlined in Denninger's articles? Or what else could he mean?

 

GF - you'll agree with this then:

 

http://market-ticker.org/archives/622-Fisc...ne-Warning.html

 

I can't remember who made the analogy but definately current environment feels like the tide puling out before the tsunami hits.

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Does everyone else also think that Jim Sinclair refers here to US Treasuries dislocation, i.e. a kind of Minsky Moment for the US as outlined in Denninger's articles? Or what else could he mean?

 

Here's a new post on Jim's site with a reference to what you're talking about - if that helps:

Posted On: Thursday, October 23, 2008, 9:50:00 AM EST

 

Central Bank Warns Of Illegal Gold Futures Speculation Risks

 

Author: Jim Sinclair

 

 

 

 

Dear CIGAs,

 

You think this is only in China? Illegality is now the hallmark of almost every market on the planet. The effort has between 13 and 88 days to go. Other major Western national leaders always cooperate with the sitting party of the Administration for re-election.

Central bank warns of risks in illegal gold futures speculation

www.chinaview.cn

2008-10-23 17:30:59

 

BEIJING, Oct. 23 (Xinhua) -- The People's Bank of China said on Thursday that "underground gold futures speculation" was "typical illegal trading on gold futures" and was not protected by law.

 

The central bank warned Chinese investors of the extremely high risks in illegal futures trading.

 

Illegal gold futures trading is reported to have cost Chinese investors at least 100 billion yuan (14.6 billion U.S. dollars).

 

The illegal gold futures trading operates in two main ways: local companies working as agents for domestic institutions and individuals to help them invest in overseas gold futures; companies providing services in gold trading and demanding investors deposit money in designated accounts in a variant of margin trading.

 

The central bank said Chinese investors could conduct real gold trading through domestic commercial banks, or invest in gold futures through the Shanghai Gold Futures Exchange.

 

More...

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I greatly appreciate Jims website, the daily updates and his wise experience and read his site daily.

 

But, he has this habit of pretending to prophetic insight into what the future holds. An example of this is his $1650 gold by January 2011 I think he said.

 

The other week he said that gold was about to vault to $1000 and it subsequently fell to $700 the moment he said it!

 

So, although I think he has great experience and may well be right in his views long term, he makes a fool of himself and damages his credibility by indulging in short term predictions to make himself look like a master of great insight, as demonstrated by some of his replies to Axe as if he was a student.

 

I certainly would not want to discourage him, but encourage a bit more humility.

 

 

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But, he has this habit of pretending to prophetic insight into what the future holds. An example of this is his $1650 gold by January 2011 I think he said.

 

My god! I didn't realise we were in 2012! Time goes so fast.

 

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... The other week he said that gold was about to vault to $1000 and it subsequently fell to $700 the moment he said it! ...

The enemy reads JSMineset as well. So what would be better than bringing the oracle in miscredit? I agree in that short term predicitions are mostly useless, even if they come from JSMineset. This market is a beast.

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The enemy reads JSMineset as well. So what would be better than bringing the oracle in miscredit? I agree in that short term predicitions are mostly useless, even if they come from JSMineset. This market is a beast.

 

Be right sit tight - we are mate.

 

Hyperinflation=absolutely

 

Deflation=they will all run to gold at some stage.

 

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The enemy reads JSMineset as well. So what would be better than bringing the oracle in miscredit? I agree in that short term predicitions are mostly useless, even if they come from JSMineset. This market is a beast.

 

Short term predictions that are useless are damaging to his long term credibility. A true oracle would have factored in that the enemy would be listening. Its quite simply a gamble that his predictions would come right strengthening his image as an oracle but it has done the opposite!

 

Dont get me wrong, I do appreciate his views and opinions, but credit where credits due and criticism where criticism is due too.

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