Dear CIGAs,

His growing popularity now is surprising and indicative of things to come.

Dr. Paul Slams Federal Reserve’s New Dictatorial Powers

Ron Paul on Healthcare

Having practiced medicine for over 30 years, Congressman Paul gives his perspective on the past and future of healthcare in this country, and the effects of government and special interests on quality, costs, and access.

Jim Sinclair’s Commentary

Was there a full moon this weekend? The Sheeple and their Media were out in full howling at the moon.

The two main business headlines this weekend are:
1. House Health Plan – BOLD on benefits, silent on the cost issue.

2. Chevy Volt Won’t Make Money But Still Key To Any GM Revival ^[1]

Both are world class moronic statements.

Jim Sinclair’s Commentary

It is staring you in the face!

What errors do you hear every day on Financial TV?

1. Crude is a currency.
2. Crude is a dollar item.
3. Crude is overvalued fundamentally.

What no one has recognized due to complacency is that the ugly face of hyperinflation is staring right at you. There is no demand pull ingredient in the energy market that can account for what is now over a double and headed for a triple.

Read on and understand.

Basis for Complacency

The unprecedented amount of monetary creation is being entertained because financial leaders see demand push inflation as highly improbable.

There is no quick fix to this business contraction because the cause is yet to be focused on: the enormous amount of OTC derivative instruments that cannot be dealt with in any practical manner. They are contracts for special performance that lack standards that prevent listing or clearing and are unfunded.

The West is in for a long period of slow business activity.

What is not being considered is the future of Western economies and that the dollar is based on confidence, a very subjective and fickle element to depend on.

The problem faced then is a cost-push inflation that has nothing whatsoever to do with the level of business activity.

This cost-push inflation is a currency related phenomena, which historically occurs as a result of QE when confidence in the currency of the practitioner nation begins to lose value at an accelerating rate. The result has always been a currency driven hyperinflation that takes birth in the worst of business condition.

“The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services.”

Jim Sinclair’s Commentary

Spending, a spending, a spending we will go!

The nuttier one is the $4500 for a clunker paid by you and me.

$12 billion in gold is a joke with today’s central bank gold hungry Asian demand

What a boon to offload $12 billion USDs for gold

Congress Backs War-Funding Bill, ‘Cash for Clunkers’ (Update1)
By Brian Faler

June 18 (Bloomberg) — A $106 billion war-spending bill won final congressional approval after the Senate voted to retain a “cash for clunkers” provision aimed at helping the auto industry.

Action by the Senate today sends the measure to President Barack Obama for his signature. The Senate passed the bill on a 91 to 5 vote; the House approved the measure earlier this week.

Senator Judd Gregg, a New Hampshire Republican, led the effort to drop a provision providing as much as $4,500 to people who trade in their vehicles for more fuel-efficient models. He said the plan, which would cost $1 billion, was a poor use of tax dollars when the government is projected to run its biggest budget deficit since 1945.

“It is a clunker,” Gregg said of the plan. “Why should our children and our grandchildren have to pay the bill” for the government subsidizing “somebody to buy their car today? How fiscally irresponsible is that?” he said.

Senator Debbie Stabenow, a Michigan Democrat, said the proposal was needed to help auto dealers hit by an “economic tsunami.” She said the plan would “help those who have been having an extremely difficult time just holding their head above water.”

More… ^[2]

Jim Sinclair’s Commentary

No, but the dollar is in for a very cold and hard winter, being conspicuously absent from present levels during Christmas festivities.

Is this the death of the dollar?
After two smugglers were stopped last week with what at first appeared to be $134bn in US state bonds, the tension and paranoia surrounding the fate of the dollar hit a new high.
By Edmund Conway
Published: 7:32PM BST 20 Jun 2009

Border guards in Chiasso see plenty of smugglers and plenty of false-bottomed suitcases, but no one in the town, which straddles the Italian-Swiss frontier, had ever seen anything like this. Trussed up in front of the police in the train station were two Japanese men, and beside them a suitcase with a booty unlike any other. Concealed at the bottom of the bag were some rather incredible sheets of paper. The documents were apparently dollar-denominated US government bonds with a face value of a staggering $134bn (£81bn).

How on earth did these two men, who at first refused to identify themselves, come to be there, trying to ride the train into Switzerland carrying bonds worth more than the gross domestic product of Singapore? If the bonds were genuine, the pair would have been America’s fourth-biggest creditor, ahead of the UK and just behind Russia. No sooner had the story leaked out from the Italian lakes region last week than it sparked a panoply of conspiracy tales. But one resounded more than any other: that the men were agents of the Japanese finance ministry, in the country for the G8 meeting, making a surreptitious journey into Switzerland to sell off one small chunk of the massive mountain of US bonds stacked up in the Japanese Treasury vaults.

In the event, late last week American officials confirmed that the notes were forgeries. The men, it appeared, were nothing more than ambitious scamsters. But many remain unconvinced. And whether fake or otherwise, the story underlines one important point about the world economy at the moment: that the tension and paranoia surrounding the fate of the US dollar has hit a new high. It went to the heart of the big question: will the central bankers in Japan, China and elsewhere continue to support the greenback even in the wake of the worst financial crisis in modern history, or will they abandon it as America’s economic hegemony dissipates?

More… ^[3]

Jim Sinclair’s Commentary

Sustainability is the key in Pakistan vs. the Taliban, or it is another waste of a Surge.

Here is a terrifying thought as Al Qaeda really does NOT need Pakistan to go nuclear. All they need is gold and bearer bonds, two nameless and impossible to trace currencies.

Al Qaeda says would use Pakistani nuclear weapons
Mon Jun 22, 2009 2:39am IST
By Inal Ersan

DUBAI (Reuters) – If it were in a position to do so, Al Qaeda would use Pakistan’s nuclear weapons in its fight against the United States, a top leader of the group said in remarks aired on Sunday.

Pakistan has been battling al Qaeda’s Taliban allies in the Swat Valley since April after their thrust into a district 100 km (60 miles) northwest of the capital raised fears the nuclear-armed country could slowly slip into militant hands.

“God willing, the nuclear weapons will not fall into the hands of the Americans and the mujahideen would take them and use them against the Americans,” Mustafa Abu al-Yazid, the leader of al Qaeda’s in Afghanistan, said in an interview with Al Jazeera television.

Abu al-Yazid was responding to a question about U.S. safeguards to seize control over Pakistan’s nuclear weapons in case Islamist fighters came close to doing so.

“We expect that the Pakistani army would be defeated (in Swat) … and that would be its end everywhere, God willing.”

More… ^[4]