Dear Extended Family,
There is a great deal of importance in today’s market action of gold. I anticipate a combination of events on the 19th and a date in June to lead to the perfect turning point action in gold, even if the dates are a few days off.
June is actually much more important in the grand scheme of things.
Regardless of which is more important to gold as a turning point, today confirms $1650 is a given and is much too low for the price of gold.
It is time now to discuss the balance of 2009.
The least considered flashpoint is now the most important. Gone are any thoughts of geopolitical premiums just when it is most important.
The equation remains:
1. Pakistan goes Taliban.
2. Israel makes a serious miscalculation.
3. Turkey is a victim.
Iran’s trial and conviction of a US passport holding news professional is a provocation even if all is not as it appears.
This comes at a time when new lines of communication are being opened with formerly isolated US states. That must cause concern in Israel.
All of these initiatives suggest that 2009 will witness outbreaks of geopolitical problems that will involve Iran and Pakistan while problems continue in Iraq and Afghanistan.
In all probability this scenario warms up with the coming of summer and goes into a very dangerous fall and winter 2009.
Do not lose sight. Not that long ago I suggested to you that we were entering a war where the battlefield is everywhere and the goal is to destroy the West economically, specifically the USA dollar.
The West is not financially prepared to fight in Iran, Iraq, Afghanistan and Pakistan, but that is what the future offers.
The Death of the Dollar, the chapter of history we are in, is a strategy of bleeding the devil infidels to death by increasing geopolitical problems when the West can least afford to war on four Middle East fronts.
Remember it was one of the killers of the WSJ reporter David Pearl that yelled to the crowd as he was being lead out of court, “The US Dollar is Dead,” thereby revealing the strategy of those that see the West as the Infidel Devils.
This is a time when the world can least afford crop failures of any significant size. The last thing we can afford is something that the very long term disruptive weather cycle, set to peak in 2011, suggests could happen.
Extreme geopolitical dislocation and crop failures are a witch’s brew that would blindside the Commodity and the Forex markets. That is the least expected at the worst possible time as the West tries to cajole its way out of the massive OTC derivative failure.
Gold is your lifeline. It is more than an investment and more than a speculation. It is the currency that will always function to protect, this time a great deal more than simple buying power.
In bringing this message, I expect to be attacked personally and publicly by the media. What I find pleasing is that in a practical sense there was not one ounce of truth in the most recent assault against me that can be seen by anyone who takes a few moments to do his or her homework.
Respectfully yours,
Jim
Jim Sinclair’s Commentary
This goes from scary to terrifying!
Pakistan’s Fatal Shore
FOREIGN AFFAIRS MAY 2009 ATLANTIC
With its “Islamic” nuclear bomb, Taliban- and al-Qaeda-infested borderlands, dysfunctional cities, and feuding ethnic groups, Pakistan may well be the world’s most dangerous country, a nuclear Yugoslavia-in-the-making. One key to its fate is the future of Gwadar, a strategic port whose development will either unlock the riches of Central Asia, or plunge Pakistan into a savage, and potentially terminal, civil war.
THE WORD PAKISTAN summons up the Indian subcontinent, but the subcontinent actually begins with the Hub River, a few miles west of Karachi, near the Indus River Delta. Thus, Pakistan’s 400-mile-long Makran coast, which runs from the Iranian frontier eastward along the Arabian Sea, constitutes a vast transition zone that bears a heavy imprint of the Middle East and particularly of Arabia: directly across the Gulf of Oman is Muscat, the capital of Oman. This transition zone, which also includes the interior land adjacent to the coast, is known as Baluchistan. Through this alkaline wasteland, the 80,000-man army of Alexander the Great marched westward in its disastrous retreat from India in 325B.C.
To travel the Makran coast is to experience the windy, liberating flatness of Yemen and Oman and their soaring, sawtooth ramparts the color of sandpaper, rising sheer off a desert floor pockmarked with thornbushes. Here, along a coast so empty that you can almost hear the echoing camel hooves of Alexander’s army, you lose yourself in geology. An exploding sea bangs against a knife-carved apricot moonscape of high sand dunes, which, in turn, gives way to crumbly badlands. Farther inland, every sandstone and limestone escarpment is the color of bone. Winds and seismic and tectonic disruptions have left their mark in tortuous folds and uplifts, deep gashes, and conical incrustations that hark back far before the age of human folly.
Drive along this landscape for hours on end and the only sign of civilization you’ll encounter is the odd teahouse: a partly charred stone hut with jute charpoys, where you can buy musty, Iranian-packaged biscuits and strongly brewed tea. Baluch tribesmen screech into these road stops driving old autos and motorcycles, wearing Arab head scarves, speaking in harsh gutturals, and playing music whose rumbling rhythms, so unlike the introspective twanging ragas of the subcontinent, reverberate with the spirit of Arabia.
But don’t be deceived by the distance that separates the Makran coast from teeming Karachi and Islamabad to the east. Pakistan exists here, too. The highway from Karachi to the Iranian border area is a good one, with only a few broken patches still to be paved. The government operates checkpoints. It is developing major air and naval bases to counter India’s projection of power into the Indian Ocean. And it has high hopes of using new ports on the Makran coast to unlock trade routes to the markets and energy supplies of Central Asia. The Pakistani government might not control the desert and mountain fastnesses of Baluchistan, with their rebellious and smuggling tribes and dacoits, or bandits. But it can be wherever it wants, whenever it wants: to extract minerals, to grab land, to build highways and bases. Think of the Pakistani government’s relationship to its southwestern province of Baluchistan as similar to that of Washington to the American West in the mid-19th century, when the native American Indians still moved freely, though decreasingly so, and the cavalry had strategic outposts.
Jim Sinclair’s Commentary
With the strategy to economically break the West and deep six the US dollar, the time for Pakistan and Iran to open two new war fronts is now and most unfortunate.
The Quiet Coup
The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government-a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.
ONE THING YOU learn rather quickly when working at the International Monetary Fund is that no one is ever very happy to see you. Typically, your “clients” come in only after private capital has abandoned them, after regional trading-bloc partners have been unable to throw a strong enough lifeline, after last-ditch attempts to borrow from powerful friends like China or the European Union have fallen through. You’re never at the top of anyone’s dance card.
The reason, of course, is that the IMF specializes in telling its clients what they don’t want to hear. I should know; I pressed painful changes on many foreign officials during my time there as chief economist in 2007 and 2008. And I felt the effects of IMF pressure, at least indirectly, when I worked with governments in Eastern Europe as they struggled after 1989, and with the private sector in Asia and Latin America during the crises of the late 1990s and early 2000s. Over that time, from every vantage point, I saw firsthand the steady flow of officials-from Ukraine, Russia, Thailand, Indonesia, South Korea, and elsewhere-trudging to the fund when circumstances were dire and all else had failed.
Every crisis is different, of course. Ukraine faced hyperinflation in 1994; Russia desperately needed help when its short-term-debt rollover scheme exploded in the summer of 1998; the Indonesian rupiah plunged in 1997, nearly leveling the corporate economy; that same year, South Korea’s 30-year economic miracle ground to a halt when foreign banks suddenly refused to extend new credit.
But I must tell you, to IMF officials, all of these crises looked depressingly similar. Each country, of course, needed a loan, but more than that, each needed to make big changes so that the loan could really work. Almost always, countries in crisis need to learn to live within their means after a period of excess-exports must be increased, and imports cut-and the goal is to do this without the most horrible of recessions. Naturally, the fund’s economists spend time figuring out the policies-budget, money supply, and the like-that make sense in this context. Yet the economic solution is seldom very hard to work out.
No, the real concern of the fund’s senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis.
Taliban oppressing northwestern Pakistanis
Mon, 20 Apr 2009 16:42:05 GMT
Taliban militants ban all political organizations and armed groups in Bajaur Agency in northwest Pakistan, giving those active in such fields two days to surrender.
A spokesman of Tehrik-e-Taliban Maulve Omar told reporters on Sunday that despite ceasefire some political and armed groups disturbed law and order in the agency, therefore, they were banned.
The ban comes after two Taliban militants were killed in an armed clash between Tehrik-e-Nefaz-e-Shariat-e-Muhamadi group and Taliban in Mahmond area in Bajaur tribal region on Sunday.
Taliban spokesman said they arrested 60 members of Tehrik-e-Nefaz-e-Shariat-e-Muhamadi (TNSM) in the agency after the clash.
Omar said that the decision of banning armed organizations in the area was taken in a meeting of Shura (Council) and gave two days deadline to such groups to wind up their activities.
“After failing, we took action against TNSM group in Mahmond area,” he said, adding that the TNSM members are Afghan Taliban, who are jeopardizing peace in the agency and they have no relations with Tehrik-e-Taliban.
Omar had recently said that Taliban would review their ceasefire and warned both government and tribal elders to stay in ‘limits’ and act upon the peace deal in the agency.
US urges world action against Pak’s Taliban
Mon, 20 Apr 2009 23:15:01 GMT
The United States urges the international community to confront Taliban insurgents’ rule in Pakistan’s northwestern Swat valley.
State Department Spokesman, Robert Wood, on Monday said that the international community should join Pakistan in confronting violent extremists like those who now run the Swat.
“They’re a threat to democracy and stability in the region, and we call on all those who are interested in bringing about stability to that region to work with us to root out violent extremism,” Wood said.
Wood’s remarks come a day after a senior Taliban leader said that there would be no room for democracy if Taliban ruled over Pakistan.
Sufi Mohammad, a pro-Taliban cleric, pointing to the concept of democracy told thousands of his supporters on Sunday in the restive Swat valley that Pakistan’s rulers were imposing the system of ‘kafirs’ or infidels on the people of the country.
At Pakistan’s Red Mosque, a Return of Islamic Militancy
By ARYN BAKER / ISLAMABAD Friday, Apr. 17, 2009
Nearly two years after the arrest of Abdul Aziz on multiple charges of inciting violence against the state of Pakistan, the firebrand cleric of Islamabad’s radical Red Mosque has returned to the pulpit with a promise that he will continue with his struggle to establish Shari’a, or Islamic law, throughout the country.
Just a day after he was released on bail, Aziz, wearing his trademark spectacles and graying beard, returned to the Red Mosque, the site of a weeklong siege in 2007 between the mosque’s seminary students and the Pakistani military, to deliver a sermon ahead of Friday prayers. Thousands of worshipers flocked to the centrally located mosque, spilling into the surrounding streets and kneeling on makeshift prayer rugs while Aziz’s voice boomed out over loudspeakers. He told the story of Moses’ struggle against the Pharaoh of Egypt to allow his people to practice their religion. Moses, considered by Muslims to be a prophet, is a common theme in Islamic sermons, but at the Red Mosque it took on a special significance. In early 2007 students at the Red Mosque’s two affiliated seminaries launched a campaign for Shari’a, occupying a nearby children’s library and embarking on vigilante raids through the capital to stop what they called “un-Islamic activities,” such as DVD vendors, barber shops and a Chinese-run massage parlor that they accused of being a brothel. The siege culminated in a terrifying shootout that the government says killed 102, including Aziz’s brother and son. Aziz was arrested as he tried to escape dressed in a burqa, the full body veil favored by female students of the conservative seminary.
The siege of the Red Mosque was a turning point in Pakistan’s inexorable slide toward religious extremism and violence. Lal Masjid, as it is locally known, became a rallying cry for the Pakistani Taliban who have declared war on the central government. It is their Alamo, and as such Aziz’s return to the pulpit after two years in jail marks an ominous victory for the forces that are determined to bring the secular government of this nuclear-armed nation to its knees. “This is the second coming of the Red Mosque,” says columnist and politician Ayaz Amir. “It will have an impact, like someone rising from the grave. The mosque has become a site of pilgrimage and followers are revivifying their faith in its waters.”
