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Jim Sinclair thread (News & Views)

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This one stopped me in my tracks.

I'm going to cross post this one.

 

Posted On: Thursday, October 23, 2008, 7:04:00 PM EST

 

What Happens In Iceland Doesn't Always Stay In Iceland

Author: Jim Sinclair

 

Dear Jim,

 

I believe what happens to the economy in Iceland will be a test-case for the US. Iceland is going for an inflationary depression since the banking system crashed and foreign investors stopped investing in the country. The same is starting to happen in Eastern Europe. I suppose it is only a matter of time when foreign investors stop investing in the US. Then you will soon have the Iceland experience. Shouldn't we be looking for Weimar in Iceland, then Eastern Europe, then the US, and then the planet?

 

"Iceland's economy may contract as much as 10 percent, according to Lars Christensen, chief analyst at Danske Bank A/S in Copenhagen. The central bank on Oct. 15 cut the benchmark interest rate by an unprecedented 3.5 percentage points to 12 percent, indicating policy makers have given up trying to control inflation. Prices may surge as much as 75 percent in coming months, Christensen estimates. "

 

Click here to view the full article...

 

Also important, Vladimir Putin warns his countrymen about buying dollars. He called it 'dubious business'. I guess you are on his side now!

 

Click here to view the article...

 

Thank you for some great articles in the last week.

 

All the best!

CIGA Jeroen

 

Dear Jeroen,

The most difficult concept for the professional public to understand is that hyperinflation can exist along with a totally disastrous economic environment. Hyperinflation falls flat because it fails to take into account the infinite velocity of money that a Weimar creates during a depression economy as a product of throwing monetary discipline at the wall.

 

When you pay people three times a day to keep up with prices, consider the mammoth daily increases in all private and business transactions in terms of the total number of currency units. What happens to the velocity of money? The turnover increases with the rate of inflation until both are hyper creating an unstoppable spiral.

 

Few understand that monetary inflation proceeds and sustains price inflation. For this reason world business in a rat hole with credit still jammed up will lead to hyperinflation in 2009-2010.

 

If world business is perceived to have bottomed and credit flows are re-established, this will bring hyperinflation in 24 hours.

 

We have heard both Russia and China chime in today on their clear perception of the pre-election falsely valued US dollar and government interference in not only gold but energy and food.

 

The PPT is working overtime on those index spreads but they only have a short time (13 to 88 days) before they have to throw it into what is most likely inexperienced hands.

 

Yes, a planetary Weimar is on the menu. Russia, the Middle East and China may just be the top survivors. Africa might just come into its own in such a scenario due to the amount of raw material and gold resources they have.

 

Respectfully,

Jim

 

http://www.jsmineset.com/ARhome.asp?VAfg=1...amp;T_ARID=6828

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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.

 

He does. He has said so before.

 

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Posted On: Thursday, October 23, 2008, 6:49:00 PM EST

Banker Blues: "I should have listened to 'Chicken Little'"

Author: Jim Sinclair

 

Dear MineSet guys,

 

Came across your banking cartoon, and it made me smile, I had an opposite encounter.

 

I was in my bank of fifteen years this last Monday, happened to see a friend, we'll call him "John", who is their senior commercial loan officer. He's a 38 year old young hot shot who they send all over the country to get the latest up to the minute training.

 

Well about 14 months ago he and I had a little chat in his office, where I officially became known as "Chicken Little." I had gone into the meeting to try and understand where the banking guys were going and doing. I came out realizing that they, or at least John, had no idea of what was about to happen. Seems they were truly clueless, or doing one hell of an acting job.

 

Well, Monday's chance meeting convinced me these guys are no actors. I never tell people I told you so, it's rude and a waste of breath, besides, they almost all have selective memories anyway. So when I saw John, I kept the exchange light and superficial.

 

He approached me and started in about what I thought about the near future of the market, more specifically his 401k's chance of survival. So here I am in the middle of a large banking branch, with maybe the number four guy of that branch talking financials. This guy was scared, and to his credit, he did accurately recall that I had tried to warn him months back.

 

He asked if he should bail out of his 401k or to weather the current financial storm? On the spot, I told him I couldn't advise him what he should do, cause I didn't know exactly where this is going or when. But I told him again the precautions "I" had undertaken in August `07.

 

So there is a snapshot of my local economy, my banker is in the dark with the rest of the 99% of the uninformed populace. To coin a phrase from the Mogambo Guru, "We're freakin doomed."

 

I went gold hunting here in Maui, pawn shops, jewelry shops, coin dealers, with no results, zippo! I have also enlisted a pilot friend who flies Europe & Asia, to search the shops there for gold or silver, he so far has had no luck either.

 

According to him, there isn't any gold of any volume to be had apparently anywhere in his scope of the world, shy of "possibly" the Comex. These dealers that ask for your money up front with months of delays for delivery is a shaky system at best, one that I don't personally trust.

 

Can't find any gold for sale, but magically the price is in decline? So there you have it, my rant for the day.

 

I personally have total confidence in gold, no matter what, I believe it will shine.

 

Aloha,

CIGA Tony a.k.a "Chicken Little"

 

http://www.jsmineset.com/ARhome.asp?VAfg=1...amp;T_ARID=6827

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Posted On: Friday, October 24, 2008, 9:32:00 AM EST

 

Much Faster Than Anticipated

 

Author: Jim Sinclair

 

 

 

 

Dear CIGAs,

 

Gold is a currency.

 

Paper currency insures nothing.

 

Gold is insurance.

 

Gold is not a commodity.

 

Gold will trade at a minimum of $1650 MUCH SOONER THAN I HAVE ANTICIPATED.

 

The shorts in gold shares will get what they deserve - financial decimation.

 

Your friend,

Jim

 

I haven't got a bloody clue what's going on or what's going to happen... :wacko:

 

[Me - Tra la la la la, skips of with fingers in ears to find a nice bit of sand to stick my head into for a few months.]

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Posted On: Saturday, October 25, 2008, 12:16:00 PM EST

China's Real View On The Dollar

Author: Dan Norcini

 

Dear CIGAs,

 

The following article provides what I believe is a window into what the Chinese actually think in regards to the Dollar. As was pointed out by an informed reader in an earlier post this week and as Jim has long said, the East tends to speak indirectly and drop hints about their intentions and/or wishes that must oftentimes be ferreted out by those of us in the West who do not understand this mode of “diplomacy”. The bluntness of this article is all the more startling for that very reason.

 

http://www.reuters.com/article/email/idUSTRE49N1XX20081024

U.S. has plundered world wealth with dollar: China paper

Fri Oct 24, 2008 6:14am EDT

...

BEIJING (Reuters) - The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday.

 

The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies.

 

A meeting between Asian and European leaders, starting on Friday in Beijing, presented the perfect opportunity to begin building a new international financial order, the newspaper said.

 

The People's Daily is the official newspaper of China's ruling Communist Party. The Chinese-language overseas edition is a small circulation offshoot of the main paper.

 

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Is Jim from Yorkshire?

 

Jim Sinclair's Commentary

 

I will give you three guesses who and what are totally responsible for the destruction of mankind, not with a gun but with a scam. Subprime loans, my arse!

 

Gulf Bank head steps down after losses on derivatives

By Robin Wigglesworth in Abu Dhabi

Published: October 29 2008 02:00 | Last updated: October 29 2008 02:00

 

The crisis in Kuwait's banking sector deepened yesterday when the chairman of Gulf Bank resigned over derivatives losses and Fitch Ratings downgraded the bank, the country's second biggest lender.

 

Kutayba Al Ghanim replaced his brother, Bassam Al Ghanim, as chairman of Gulf Bank after depositors started to withdraw deposits from the stricken lender on Sunday - the first known bank-run in the region during the crisis - even though the Kuwaiti central bank pledged to support the bank and guarantee all deposits in the country.

 

Fitch Ratings downgraded Gulf Bank's individual rating to D from B/C. While affirming the long-term issuer default rating of A+, the agency placed the bank under review for individual downgrades for a "serious lapse" in risk management and possible capital base erosion from "potentially large losses".

 

Adding to the bank's woes, Moody's Investors Service yesterday placed Gulf Bank's Aa3 long-term local and foreign-currency deposit ratings, and C bank financial-strength rating on review for possible downgrade. The Prime 1 short-term ratings were not affected, according to the credit rating agency.

 

"It is completely understandable. I wouldn't trust them [the ratings agencies] if they hadn't done this," said a Gulf Bank spokesman.

 

More...

 

Also...

 

Dear Friends,

 

This is not making a direct comparison, but instead speaks to my colleagues that believe the only way velocity of money increases is by a turn for the better in business activity. I will give them that this is the scenario wherein increased monetary stimulus transmits into inflation. What they are ignoring is another more likely scenario which is a significant depreciation of currency, in a short period of time, which we know can look like a long fishing line (straight down). This scenario produces much more intense inflation in the midst of a recession or depression.

 

The next possibility is significant fiscal stimulation directly on the heels of monetary stimulation which can result in some degree of either alternative listed above.

 

Regards,

Jim

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Looks like they've just reworked it - check it out now.

No, still just headlines.

 

I think the Cartel tries to stop us in our tracks. They sabotage Sinclair's page, and flood ours here with Russian naughtiness. :lol:

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Anyway, as long as they have this problem, here an email they sent out earlier today:

 

Dear Comrades In Golden Arms,

 

Dear Friends,

There is absolutely no question in my mind that gold will trade at

$1650 on or before (probably much before) January 14th, 2011.

 

Regardless of what financial TV or popular analysts claiming never to

have made an error say, we are correct.

 

Stay the course. Do not let your guard down. Protect yourself as the

most significant dislocation economically in world history for major

nations is at our doorstep. In fact it is one foot through your door

already. Are you prepared?

 

You ask why? Then read on!

 

There seems to be some degree of assumption that each action by the

Fed brings the credit lockup closer to being corrected.

There are many challenges to this assumption.

 

Will banks use funds to patch up their pillaged balance sheet or

actually start loaning in a progressive manner? The answer is balance

sheet as they really have no alternative.

 

As in the case of AIG below, is any cash bailout enough to bail out

losers? We need to remember that what OTC derivatives do not do to

financial or any other entity, the drop in earnings will. Whatever is

left over litigation will pick the bone clean of.

 

Regulators went from 12 to 1 leverage to 40 to 1 leverage where a

2-½% change in total asset value would bust financial institutions.

The losses taken are not bookkeeping, but are hard and real.

 

The only thing bookkeeping did was allow these losses to be

maintained in full value because they were OTC derivatives, not

listed derivatives with a clearinghouse guarantee.

 

Clearinghouses demand losers pay in and winner are paid out daily

while there is no such facility for OTC derivatives. Because of no

clearinghouse function, banks and other entities carried the

declining value in OTC derivatives at full value at 40 to 1 leverage.

 

The bailout funds are simply putting a thumb into the leak in the

dyke as more holes open up from earnings declines, slow business and

serious litigation.

 

The TIC report is looking quite bad, indicating that dependence on

non-US entities to finance a budget deficit that is about to go

ballistic cannot be depended on.

 

All that we have seen is emergency action without limits to hold

financial zombies from being discovered by the general public.

The US Fed is in fact holding up the entire world that is near and

dear to them. One of the methods is through swaps, which are a form

of OTC derivatives and just like the disease, are off balance sheet

items.

 

There is no limit to what the US Fed and Treasury will do in the next

few months. It will be discovered in the not too distant future that

the US dollar has moved into critical oversupply. At that point

expect to the see the US dollar drop like a stone and gold trading at

$1200 and $1650.

 

The US dollars will see.72 again prior to .62 and .52.

 

The limiting factor to the present terminal financial condition under

the Fed and Treasury bandage bailout is the US dollar. There is no

escaping the event of publicly recognized dollar oversupply, the

ineffectual nature of bailouts and the appearance of hyper-inflation

in the midst of non-recovering business conditions.

 

Keep firmly in mind that retired Chairman Volcker has described this

situation as "We have a failed financial structure." He went on to

describe the condition of the financial situation as "Code Blue."

 

What you see now is only the beginning of a great economic drama, out

of control and nowhere nears its end.

 

This is it. It is now!

 

Gold is the only entity that has the capacity of insuring your future

buying power, maybe even more.

 

Enough said.

 

Respectfully,

Jim

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Uh, wow, Jim now calling for a run on the CRIMEX, similar to Dan Norcini who has mentioned small investors taking delivery of 100oz contracts today.

Jim Sinclair's Commentary

 

I, like yourself, am fed up with the gold bank's ownership of the

gold price via paper instruments. Therefore I respectfully ask those

that can afford it to purchase as many Comex contracts as you can

afford to take delivery of and do so.

 

Accept my assurance that I will take delivery of Comex 100 ounce bars

on every delivery month from this day forward.

Respectfully yours,

Jim

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For the last couple of weeks I haven't been able to connect to Jim's site. Does anybody else get this problem?

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For the last couple of weeks I haven't been able to connect to Jim's site. Does anybody else get this problem?

Not me. He said there was some problems with links. The website seems to have changed its appearance yeaterday.

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Seems lik J Sinclairs MinDSet has a new showroom look ! :)

 

http://www.jsmineset.com/

That's a vast improvement, they've took his photograph down I suspect to dust the cobwebs off him. It's nice to know that Jim was one of the poineers of the arpanet though. :D

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Jim Sinclair’s Commentary

 

Today’s new news (seriously):

 

TARP = Trouble Asset Relief Program (now closed).

QE = Quantitative Easing. (now opened).

CRAP = Consumer Relief Asset Program.

The lower Yen was the product of QE in the early 2000s.

A lower dollar will be a product of QE and CRAP.

Finally it will be remembered as CRAPpy QE.

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Jim is very clear with his views on hyperinflation, and when it is triggered:

 

 

Quantitative Easing And The Consequences Thereof

http://www.jsmineset.com/index.php/2008/11...uences-thereof/

 

If you read yesterday’s notes on hyperinflation you now know the common belief that an economy must be in a recovery phase to motivate the velocity of money, which in turn converts expansion of money supply into significant inflation, is a BUSTED ECONOMIC MYTH. History speaks loud and clear to that.

 

Hyperinflation comes about via a loss of confidence in money. This can be political as well as economic. It can happen to any major currency that weakens. It simply has never occurred by an upturn in business.

....

So let’s summate what we have discovered by a review of all significant hyperinflationary events in history:

 

1. The velocity of money increase that transmutes money supply into runaway inflation is currency related in every instance, not business recovering activity related.

 

2. The tip off to impending hyperinflation is always a currency event. This is without exception and never fails to occur.

 

3. More than 95% of all hyperinflation events, if not all, started in a business recession or depression, not in a recovery phase of that country’s business activity.

 

I invite you to try to prove me wrong, knowing you cannot.

 

 

Was Weimar’s Hyperinflation Triggered By An Increased Velocity Of Money Or A General Loss Of Confidence?

http://www.jsmineset.com/index.php/2008/11...-of-confidence/

 

The conclusion I come to is the argument that business must be flat to improving in order for the process of hyperinflation to start is not an axiom. It was not true in the Weimar experience as well as most of the modern experiences generally limited to a country or closely allied trade area.

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Can anyone else not reach jsmineset.com today? Has he been taken down?

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Can anyone else not reach jsmineset.com today? Has he been taken down?

I still can't open it and haven't been able to for a few weeks. :( I've tried with 3 different browsers, Safari, Firefox and IE.

 

If there's anything really interesting post it here so that I know.

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I still can't open it and haven't been able to for a few weeks. :( I've tried with 3 different browsers, Safari, Firefox and IE.

 

If there's anything really interesting post it here so that I know.

 

It has been working, up until today. Not sure what your problem is. He has had a lot to say on the quantitative easing. Here's his latest posting.

 

Dear Comrades In Golden Arms,

 

If you read yesterday's notes on hyperinflation you now know the common belief that an economy must be in a recovery phase to motivate the velocity of money, which in turn converts expansion of money supply into significant inflation, is a BUSTED ECONOMIC MYTH. History speaks loud and clear to that.

 

Hyperinflation comes about via a loss of confidence in money. This can be political as well as economic. It can happen to any major currency that weakens. It simply has never occurred by an upturn in business.

 

The mistaken belief that an up-turn in business activity as an absolutely necessary criterion for the enormous funds now injected and to be injected into the economic system to transmute in an out of control inflation is convenient spin.

Hyperinflation in every case, even those considered political, has been a product of variations of quantitative easing, the process we are now entering.

 

The key reason why quantitative easing has been so successful at fighting off hyperinflation is because this method of direct injection is made of liquidity and therefore effectively eliminates and sterilizes the funds so injected.

 

The reason all historical hyperinflationary events have occurred is due to the failure of attempts to unlock credit lock ups.

 

The Federal Reserve has no other option than moving to quantitative easing because the Federal Reserve Begging Bowl and the TARP have only served the Good Ole Boy's Club of Banking.

 

GE is simply too big to fail. GM is simply too big to fail. Quantitative easing can prevent this but as always, with CONSEQUENCES.

 

Currency relationships are the final determinant of hyperinflation in every case in history going back to Rome.

 

The technical dollar rally had to be engineered otherwise TARP or the Begging Bowl could not have been applied.

 

The credit of unlimited dollars via quantitative easing carries defined dollar consequences that no carry trade nor repatriation can nullify.

 

So let's summate what we have discovered by a review of all significant hyperinflationary events in history:

 

The velocity of money increase that transmutes money supply into runaway inflation is currency related in every instance, not business recovering activity related.

The tip off to impending hyperinflation is always a currency event. This is without exception and never fails to occur.

More than 95% of all hyperinflation events, if not all, started in a business recession or depression, not in a recovery phase of that country's business activity.

I invite you to try to prove me wrong, knowing you cannot.

The instant the technical dollar rally based on repatriations and carries end, and it will, the process leading to hyperinflation will have begun.

 

Until then big money will be the buyer of any weakness as were certain Middle Eastern entities a week ago.

 

Those who take delivery of their COMEX contract out of COMEX storage are doing themselves and all of us a favour.

 

 

Madness or Reality

 

Those who are frustrated by gold need to understand that the masses are driven via spin to illusions and madness.

 

When reality dawns via a break in markets that via spin they have gone mad over, it is too late to do anything but go belly up.

There is a great story that proves this.

 

Back in 1824 there was a blue-collar worker who had the ability to be a great public speaker.

 

His topic was his relationship to the then mayor of New York and his observation that the lower end of Manhattan Island was in the process of sinking. He claimed to have been retained by the Mayor of New York to promptly and permanently fix this problem.

 

The process was dimply. He would saw off the lower end of Manhattan then tow it out to see, turn it around and bring it back properly connecting it with Manhattan, therein resolving the dire problem.

 

Although that sounded ludicrous and was derided in publications, Lozier persisted. Lozier, purporting his authority, began to order all kinds of supplies, hire workers, and order huge amounts of livestock as food. All of this was in the thousands.

 

Then came the day for work to start. All items were delivered that day and a huge number of staff as well as lines of workers appeared ready for the task.

 

The only person missing was Lozier. He was never prosecuted, as everyone fooled by him were too embarrassed to admit they had been had.

 

This is those in the market who buy the spin that hyperinflation can only be the product of an improving business climate.

You can read about this in the "Grand Deception" by Alexander Klein.

 

What is occurring now is a "Grand Deception" which due to the unlimited amounts of funds being and to be created gives today's Lozier an extremely short lifetime.

 

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It has been working, up until today. Not sure what your problem is. He has had a lot to say on the quantitative easing. Here's his latest posting.

Thanks for that. Quantitative easing = printing?

 

Good to read his point that the idea that a recovering economy is needed for hyperinflation is rubbish.

 

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Thanks for that. Quantitative easing = printing?

 

Good to read his point that the idea that a recovering economy is needed for hyperinflation is rubbish.

 

The site seems to be working again now. We can put our PPT conspiracy theory to bed now :lol:

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