Jim Sinclair’s Commentary

The following was sent in by a CIGA:

^[1]

Jim,

Did you see this one?  I was laughing when I read it.

CIGA Eric

Eric,

Maybe if the IMF is not too busy, California and New York are much closer.

Jim

IMF to Send Team to Greece Tomorrow on Request of Authorities

Greece’s economic plans are under scrutiny as the country attempts to convince the European Union and investors that its plan to tame the EU’s largest deficit is credible. EU and European Central Bank officials were in Athens last week to vet the government’s three-year stability pact, an outline of how Prime Minister George Papandreou aims to reduce the shortfall from 12.7 percent of output in 2009 to less than 3 percent by the end of 2012.

Anyone else get a vision of a relief pitcher running in from the bullpen with bases loaded only to give up a home run on the first pitch?

Maybe we should send the IMF to California? Oh, that’s right California is apart of the United States union. A union where twin trade and budget deficits -3% and -11%, respectively don’t matter.

The easiest way to reduce structural deficits is reduce consumption during a recession. Can’t call it a depression until well after the fact. Net exports as a percentage of GDP ^[2] has declined sharply since 2005Q4. Poof, the deficit starts to shrink. Unfortunately, for countries with structural deficits, where imports far exceeds exports and must be settled with debt issuance – future consumption, national income falls as consumption falls. This is because a disproportionate amount of income is derived from consumption. Poof, another problem arises. National income and standard-of-living begin to drop.

Bring in a new relief pitcher!

More… ^[3]

Jim,

Here in Seattle at a very large boatyard where a couple of my friends build extremely expensive boats for the super rich of the world, things are not so good. A Russian billionaire just stopped work on a 200 ft. boat. He is abandoning the project. Another mega-wealthy man just walked away from his project, losing millions in the process, as he faces his own bankruptcy. The boatyard itself is in danger of closing down, with virtually no new orders coming in.

Yachts that were $60 million a couple of years ago are now sitting for sale at $30 million with no takers. Bottom line: things here are not recovering.

CIGA Bob

Bob,

Call the banksters. They can buy them all with their last dip in the bonus well.

Jim

Jim,

I have a lot of friends that have told me they understand my argument for owning gold, but STILL have not purchased any.

For anyone who logs on to JSMINESET and still hasn’t bought any gold yet, here is a very clear example of why owning at least some gold is a very, very good idea…

Click here to view the article… ^[4]

As you reflect on the above article, remember these three points:

(1) We have already seen that the current person occupying the White House has been trying to lead the United States down the exact same path that Hugo Chavez has been leading Venezuela.

(2) Gold will be worth the same on the world market after Hugo Chavez devalues the Venezuelan Bolivar.

(3) Gold will be worth the same on the world market after the current administration devalues the US Dollar (whether initiated by outside market forces or directly by the administration).

The poor people of Venezuela are now rushing to the stores to buy as many things as they can before the devaluation of the Bolivar, but that will only help them for a few weeks or so. You can only store so much food and other necessities.

Does anything more need to be said in defense of owning at least some gold?

CIGA Buz

Dear Jim,

How important can a war be when your people at home are freezing to death? We need to get our priorities straight. This is more like a Zimbabwe headline!

Best,
CIGA BT

UK gas reserves down to six hours as imports fail to arrive

Britain’s reserve of stored gas stood at just six hours at lunchtime today as imports from Norway failed to arrive.

National Grid issued an appeal for more gas to be pumped to the UK after unusually cold weather led to a shutdown of the Ormen Lange processing centre in the Norwegian Sea, interrupting gas flows to the UK at a time of peak demand.

It is the fourth time this month that the company has issued the notice to the market. The so-called gas balancing alert has been issued only five times in total since the system was introduced three years ago.

Most of the UK’s gas arrives by pipeline from the North Sea or continental Europe as well as in liquefied form in tankers, and National Grid expects other suppliers to make up the shortfall. In total, 39m cubic metres of gas – enough to meet a 10th of UK demand – which the National Grid expected to be imported by pipeline from Norway and the continent, via Belgium, did not arrive today.

The Grid’s alert follows the move last week to cut off industrial users on interruptible gas contracts to give priority to domestic supply. Big companies such as British Sugar and Vauxhall’s car plant at Ellesmere Port were temporarily cut off last Thursday, forcing them to turn to oil-fired generators.

More… ^[5]

Jim,

You talked 401k and IRA account dangers well before this discussion. Maybe this will serve to remind the CIGAs once again

CIGA Eric

401k and IRA Accounts
From Businessweek:

The U.S. Treasury and Labor Departments will ask for public comment as soon as next week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.

More… ^[6]

 

Jim,

This transcript of a 3-minute interview with the CEO of CME Group, the world’s largest derivatives exchange, was aired last week on the PBS Nightly Business Report.

It appears that the derivatives market is doing business as usual and is expected to be very profitable in 2010!

It doesn’t seem possible does it?

Keep up the great work,
CIGA Black Swan

Click here to view the transcript… ^[7]

CIGA Black Swan,

Of course it is possible. The legislation was a joke.

The clearinghouse is a major financial accident waiting to happen, and has no reference to past no standard OTC derivatives.

Valuation will still be at best a guess. They are all still out there threatening human life as we know it.

Jim