Dear CIGAs,
Please take a moment to listen to the following interview I did Friday.
Click here to listen in MP3 format…
Gold slot: Jim Sinclair – gold expert
20 November 2009 23:08
Gold at $1650/oz by this time next year? Peter Major gives his view.
ALEC HOGG: Before we pick up with that clip from Jim Sinclair, Peter Major from Cadiz Corporate Solutions is with us. Peter we’ll talk to you a little later about the whole carry trade in the rand but, before be bring in Jim Sinclair’s discussion, d’you know much about this guy? Have you followed his stuff over the years?
PETER MAJOR: No – Jim Sinclair I am pretty weak on, Alec. I think I’ve heard him a couple of times, and I’ve read one thing he wrote in the last year or so, so all the background you give me on the guy I’ll appreciate.
ALEC HOGG: He is an American. He is quite advanced in years now. He comes from a family that has traded gold for generations. But what was interesting, he told me in our conversation today, is that he lived in Tanzania for some years, and his children live here in South Africa. They live in Bryanston. So it’s interesting to have that South African connection.
Let’s hear now what Jim thinks. I asked him, to kick off with: "Why have you been so interested in gold for so many years?"
"JIM SINCLAIR: I came from a European family – marriage was a little complicated, but my father was Bert Seligman, one of the great, great traders that existed in the street, and it was very much in our blood that gold was part and parcel of the monetary system, as reserves, pretty much the Austrian school.
Jim Sinclair’s Commentary
$1274-$1278 might be closer than most think.
JP Morgan targets gold at $1300
Brendan Ryan | Fri, 20 Nov 2009 11:26
[miningmx.com] — JP MORGAN has reacted positively to the news that US financier John Paulson is to launch a pure-play gold fund commenting the implication is that Paulson could be expecting inflation to pick up.
In a Global Equity Research note the firm said, “so far the massive expansion of the Fed’s and other central banks’ balance sheets has not affected inflation due to the scale of the de-leveraging and slower money velocity.
“Typically, increases in the money supply base find their way into M2 money supply with a lag. While the Fed is hoping that once the patient begins to recover, it will withdraw the liquidity, experience suggests this will be difficult to do.
“We believe it’s reasonable to assume the risk of significantly higher inflation in one or two years. With respect to golden portfolio protection; remember the time to purchase insurance is before your house catches fire.”
Other positives for gold noted by JP Morgan are purchases by central banks and the belief that the metal’s relationship with the dollar may be changing.
Jim Sinclair’s Commentary
This is fact. It outlines the choices open to broken states in 2010. The Formula has strangled cities, states and nations. It is still in force devoid of intervention focused on causes and not simply treating symptoms. Making financially whole the major players of the OTC derivative world cannot be seen as intervention focused on righting the cause of the downward spiral. Stimulus plans will be ineffectual in reversing this Western world downward spiral. It has caused a boom in Wall Street while Main Street is still disintegrating.
States faced with three brutal options in 2010: inflation, high taxation or default
- Public announcement GEAB N°39 (November 16, 2009)
"As anticipated by LEAP/E2020 last February, in the absence of major reappraisal of the international monetary order, the world is now entering the phase of geopolitical dislocation of the global systemic crisis. In 2010, as protectionism and the economic and social depression will gain momentum, a large number of States will be compelled to choose between three brutal options: inflation, high taxation or defaulting on their debt. A growing number of countries (USA, United Kingdom, Euroland (1), Japan, China (2),…) have used all their budgetary and monetary cartridges in the 2008/2009 financial crisis and are now left with no other alternative. Nevertheless, out of ideological reflex or in an attempt to avoid by any means having to make such painful choices, they will try to launch new stimulus plans (under different names) even though it is now clear that the huge public effort made in the past months to boost the economy is having no impact on the private sector. Indeed the consumer-as-we-knew-him in the past decades is dead, with no hope of resurrection (3). Knowing that nearly 30 percent of Western countries’ economies are now made of « economic zombies » (financial institutions, companies and even states, whose signs of life are only due to central banks’ liquidity injections), it is possible to confirm the inevitability of the “impossible recovery” (4). The international and social (within each country) « everyman for himself » rule is beginning to prevail, as well as a general impoverishment of the ex-Western world, United States in the first place. In fact the West is being scuttled by leaders unable to face the reality of a post-crisis world, who keep resorting to methods from yesterday’s world despite their proved inefficiency.
In this 39th issue of the GEAB, our team has therefore chosen to develop anticipations on general developments in 2010, a year when key states will see their choices be restricted to three brutal options, inflation, high taxation or default, which they will struggle to escape from in vain.
Knowing that one of the reasons why stimulus plans are doomed to fail is that the consumer-as-we-knew-him in the past thirty years is dead, we analyze this phenomenon in this issue of the GEAB, as well as fallout for companies, and for the marketing and advertising businesses.
In the field of geopolitics, we present a number of LEAP/E2020 anticipations regarding Turkey by 2015 with regards to both NATO and the EU.
Of course, we also present our usual monthly recommendations, as well as the results of the last GlobalEurometre survey."
Jim Sinclair’s Commentary
The following is fiction, but based on fact. As a result, this outline may offer a better prediction of the future than what is generally available.
In my opinion it is worth your time for review.
The Day the Dollar Died
by John Galt
November 18, 2009
The following story in italics is a potential fictional time line for the day the dollar died. I hope not to instill fear or loathing but to give everyone some perspective on a POSSIBLE outcome which does not really take much of a reach to come to any conclusion. Despite popular belief and promises from those who wish to rob you of your savings and investments, the collapse of the dollar might just be an event measured in hours, not days as their control is not what it seems…..
Mike was less than an hour from home in Minnesota after dropping his load off in Fargo but knew he needed to top his tank off this Sunday evening to insure his rig would make it home. He pulled into the Petro Truck Stop just outside of Fargo and hopped out of the cab into the bitter twenty below temperatures which he could not believe had already hit at ten o’clock at night. He slid his fuel card into the pump waiting for the next prompt when the “SEE ATTENDANT” message flashed in the screen. He blustered, figured it was another card problem and whipped out his Master Card and slid it in after the pump reset and again the “SEE ATTENDANT” message flashed up. “What the hell is going on?” he thought to himself as he wandered into the long line of drivers boisterously yelling at managers and clerks alike.
Tom finished up his shift on the docks at the Nestle warehouse in Hampton, Georgia at exactly 11 o’clock at night and decided that because of the scuttlebutt he had been reading on the message boards, it may not be a bad idea to pick up a few cans of food and some toilet paper at the local WalMart Super center. Even though it was a Sunday night, they were always stocked and it was just five minutes out of the way to his home. As he walked inside the store, his mouth dropped. It looked like the day after Thanksgiving sale with every register open and ten plus people deep at 11:30 p.m. “Oh my God!” he gasped as he walked in grabbing the last shopping cart with the wheel that was half locked up. As he walked as fast as he could to the aisle with the paper goods, he looked at all the shelves then noticed the clerk who looked stunned himself. “How in the SAM HELL does WalMart sell out of Toilet Paper son?” he screamed at the eighteen year old kid. “Sir, I don’t know what is going on. Is the world ending? I’m a little freaked out!” the clerk stammered. Tom realized that he was not to blame and as he calmed down said to the kid “Son, I don’t know what is going on either. It must be an ice storm on the way. Are you folks getting another truck soon?” The clerk said in a very low voice “Sir, I think there are two coming at 2 a.m. I would wait here if I were you.” With that information Tom slinked outside to his car and called his wife at home just before midnight to tell her he would be staying to wait on the WalMart trucks.
Jim Sinclair’s Commentary
The Green Hornet suggests that even discussion of this makes it clear that Pakistan is the most serious geopolitical flash point now.
US prepares contingency plans to seize Pakistani nuclear triggers
By James Cogan
20 November 2009
On November 9, the New Yorker magazine published a lengthy article by veteran correspondent Seymour Hersh dealing with the considerable nervousness in US ruling circles over the security of Pakistan’s arsenal of between 80 and 100 nuclear weapons. Hersh’s sources told him that the primary fear was not a Taliban takeover, but a mutiny by anti-American Islamist tendencies inside the Pakistani armed forces, in which they attempt to seize all or parts of the country’s nuclear arsenal.
Like many of Hersh’s exposés, the article uses information leaked by unnamed high-level sources to make public an aspect of US foreign policy causing concerns in ruling circles. In this case, the primary motive appears to be to press for greater Pakistani guarantees over its nuclear weapons and more intrusive American monitoring and involvement.
Hersh alleged that US officials have pushed over the past eight years for an “understanding” with their Pakistani counterparts that American forces can enter Pakistan to secure its nuclear arsenal in the event of a direct threat. According to Hersh’s sources, a special unit drawn from several agencies is on four hours’ notice to deploy to Pakistan from Andrews Air Force Base in Maryland. The objective would be to seize the triggers that are needed to arm the weapons, and fly the devices out of the country. Pakistan reportedly keeps its warheads and nuclear triggers at separate locations.
A deployment nearly took place mid-year, Hersh was told, following an alert that a Pakistani “nuclear component had gone astray”. The special American unit had arrived in Dubai before the reports were deemed to be a false alarm and the mission called off.
Hersh’s article provoked a barrage of denials, especially in Pakistan. The Pakistani foreign ministry denounced the claims as “preposterous”. The military labeled them “absurd”. The US State Department added that the US has “no intention of seizing Pakistani nuclear weapons or material” and stated its “confidence in the ability of the Pakistani government to provide adequate security”.
Jim Sinclair’s Commentary
Here is the probable result of increased US presence in Pakistan
Pakistan demands US share Afghan blueprint
By KIM GAMEL (AP)
ISLAMABAD — Pakistan expressed fear Friday that a large increase in foreign troops in Afghanistan could push militants across the border into its territory and called on the U.S. to factor in that concern as part of its new war strategy.
Meanwhile, a suspected U.S. missile strike killed eight militants in northwestern Pakistan, officials said, the second attack this week in an area believed to hold many insurgents who fled from an army offensive elsewhere in the Afghan border region. American officials generally do not acknowledge the unpopular attacks.
The Pakistani concerns, raised by the prime minister during a meeting with visiting CIA director Leon Panetta, could pose another headache for President Barack Obama as he weighs military proposals to send 10,000 to 40,000 additional U.S. troops to Afghanistan next year.
Prime Minister Yousuf Raza Gilani said the United States must fully share its plans for Afghanistan with Pakistan so that it can contribute to them, according to a statement from his office.
