Dear CIGAs,

Remember our repeated discussions a while back about the Slowest Train Wreck in History, Fannie and Freddie? How many times were the shorts run out? The answer is on every rally in the general indices.

Gold is exactly the same in reverse. At every opportunity the Comex paper shorts raid gold and run out the longs.

Just like the shorting of Fannie and Freddie turned out to be one of the best and safest plays in the market, long gold will also prove to be a safe play as it rises to my and maybe Alf’s goals, supported by Armstrong’s research.

Today you are being had yet again.

 

Jim Sinclair’s Commentary

Today’s decline in gold has nothing to do with SDRs.

There is nothing new in SDRs as they are 40 years old this year. Their introduction in 1969 was one of the reasons for the bull market in gold from 1968 to 1980.

What you are witnessing is the COMEX paper gold manipulators once again having their way with you.

Assuming no one of size wishes to take delivery out of the Comex warehouse, then this is a perma-experience as gold rises to $1224, $1650 and beyond.

It assures that very few of you will be left in gold or silver, having decided to go out into the cold. Some of you may even put all you have in SDR bonds.

Nothing assures a top in the US dollar better than SDRs.

Gold is a currency, has been a currency for all written history and will prove itself so in 2009.

The US dollar is as much a bubble as were tech stocks. The USDX is what an SDR is. The US dollar will trade at .8200, .7200, .6200 and below.

The frustration that the COMEX will deliver to you if unopposed will certainly take out 75% of whatever is left of the gold gang. It will prove once again that it is the Goldman’s of the world that make the real money in gold.

Today is a pure paper manipulation.

 

Jim Sinclair’s Commentary

I have two observations here:

1. The US dollar represents a banana republic monetarily.

2. Compared to the nominal amount of derivatives outstanding at above one quadrillion (past BIS truthfulness, a number that has since been degraded), 11 trillion is chump change.

3. If you throw your gold away for dollars you are mad victims of the majors on the Comex.

National debt hits record $11 trillion
By MANU RAJU | 3/17/09 6:42 PM EDT

The eye-popping national debt surpassed $11 trillion Monday, the largest in U.S. history.

The new Treasury Department figures on the national debt were released as the non-partisan Congressional Budget Office is expected to project that the annual budget deficit will be higher than previously estimated by the White House’s Office of Management and Budget. The debt, which refers to the cumulative amount of money the government owes, hit $10.9 trillion on Friday.

The whopping number has major ramifications for President Barack Obama, who is trying to push through a raft of big-ticket bills on health care, energy, education and climate change — while also attempting to stabilize the swooning economy.

Sen. Kent Conrad (D-N.D.), chairman of the Budget Committee, said Tuesday that the numbers could force Congress to make "adjustments" to Obama’s $3.6 trillion budget plan.

"It’s very important get a result for the American people and one that has the priorities that have been [announced] by the president in terms of reducing our dependence on foreign energy, that’s in all of our interests, excellence in education, health care reform and dramatic reduction of the deficit,” Conrad told reporters. “Those will be our guiding principles as we go forward, but as I say, we’ve not yet seen CBO’s new numbers. But I think we can all anticipate because they were done substantially later than OMB’s, that they are going to be more adverse. That that’s going to require all of us to make adjustments.”

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Jim Sinclair’s Commentary

Have you ever felt you might be on the wrong planet?

FDIC Criticizes Massachusetts Bank With No Bad Loans for Being Too Cautious
Tuesday , March 17, 2009

A Massachusetts bank that has defied the odds and remained free of bad loans amid the economic crisis is now being criticized by the Federal Deposit Insurance Corp. for the cautious business practices that caused its rare success.

The secret behind East Bridgewater Savings Bank’s accomplishments is the careful approach of 62-year-old chief executive Joseph Petrucelli.

"We’re paranoid about credit quality," he told the Boston Business Journal.

That paranoia has allowed East Bridgewater Savings Bank to stand out among a flurry a failing banks, with no delinquent loans or foreclosures on its books, the Journal reported. East Bridgewater Savings didn’t even need to set aside in money in 2008 for anticipated loan losses.

But rather than reward Petrucelli’s tactics, the FDIC recently criticized his bank for not lending enough, slapping it with a "needs to improve" rating under the Community Reinvestment Act, the Journal reported.

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Jim Sinclair’s Commentary

We do not need Russia to weaken the US dollar. The Fed and the Treasury are totally capable of that.

The dollar death nell is contained in:

SDRs (just as it was in 1969).

The Zimbabwean approach to monetizing your own debt as per the Fed purchase of US Treasuries.

Russia bids to topple cash system
MOSCOW
17/03/2009 1:00:00 AM

Russia has unveiled radical plans for sweeping global financial reforms designed to weaken US dominance and consign an ”obsolescent” world economic order to the past.

The Kremlin said in a six-page document addressed to the upcoming Group of 20 summit in London the downturn was the result of a collapse of the existing financial system due to poor management and inadequacy. It said the crisis showed the need to abandon traditional approaches and adopt collective and globally agreed decisions aimed essentially at developing a globalisation process management system.

The document spelled out five principles on which a ”new international financial architecture” should be based and offered proposals in eight specific areas for the G20 to consider, including reform of the international monetary and financial system, reform of the system’s institutions and tightening international regulation and financial supervision. Russia said the London summit should agree on ”parameters” of a new financial system but should be followed by an international conference to adopt conventions on new regulations. AFP

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Jim Sinclair’s Commentary

Ever heard of the political maxim of building a straw man and tearing it down to demonstrate you are doing something for the man in the street?

Outcry Builds in Washington for Recovery of A.I.G. Bonuses
By JACKIE CALMES and LOUISE STORY
Published: March 17, 2009

WASHINGTON — The bonuses that the American International Group awarded last week were paid to 418 employees and included $33.6 million for 52 people who have left the failed insurance conglomerate, according to the office of the New York attorney general.

The company paid the bonuses, including more than $1 million each to 73 people, to almost all of the employees in the financial products unit responsible for creating the exotic derivatives that caused A.I.G.’s near collapse and started the government rescue to avoid a global financial crisis.

A.I.G. has received nearly $200 billion in federal bailout funds.

The information adds to the firestorm confronting the Obama administration and Congress since the weekend disclosure that A.I.G., almost 80 percent owned by the government, paid out $165 million in bonuses.

Even before the New York attorney general, Andrew M. Cuomo, divulged the new data on bonus payments in a letter to Representative Barney Frank, the Massachusetts Democrat and chairman of the Financial Services Committee, the White House and Congress separately were rushing to get out in front of the mounting public furor. Officials and lawmakers condemned A.I.G., pointed fingers at each other and promised speedy action to recoup the taxpayers’ money.

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