Jim Sinclair’s Commentary
Sprott does a great job documenting some of the major reasons to own gold.
Click here to read the article in PDF format…
Jim Sinclair’s Commentary
Dean Harry Schultz, my dear friend for more than 40 years, says it as it is, always.
This is a community read. God Bless and sustain dear Harry.
Bearish Schultz says hyperinflation may happen suddenly
Commentary: Crash-predicting letter says recovery might not come
By Peter Brimelow, MarketWatch
June 10, 2010, 12:01 a.m. EDT
NEW YORK (MarketWatch) — Stocks continue to flounder. A remarkable veteran editor says get used to it.
Harry Schultz’ International Harry Schultz Letter was one of 2009′s top 10 performers because it ran with the rally. And I named it Letter of the Year for 2008 because it undeniably did predict the crash, although by Hulbert Financial Digest count it didn’t benefit, for various technical reasons.
Despite 2008, IHSL’s longer-term record remains strong. Over the past five years, the letter has achieved an 11.39% annualized gain, vs. 1.02% annualized for the dividend-reinvested Wilshire 5000 Total Stock Market Index. Over the past 10 years, it has achieved a 6.12% annualized gain, vs. 0.22% annualized for the total return Wilshire.
Schultz specialized in grand theorizing, and his current Big Idea, based on pure intuition as far as I can see, is that stocks and the economy will head down, then up, in two 10-years swings, complicated by counter-trend rallies like that of 2009-10.
He writes in his most recent issue: "Remember my now-classic 20-year multi-faceted buying power ‘V’ formation? It’s proven its worth so far. It’s most unlikely to be totally prescient, but may be largely correct. Some thought, briefly, after the recent 12-month stock market rally and a few green shoots, that the ‘V’ would be broken. But things have returned to the pattern as so many events have occurred (including Greek financial explosion) — which signal a fresh downtrend all round. Theoretically, not until 2017-2018 does the downward part of my ‘V’ end, and begin a positive, upbeat 10-year uptrend working back to where we were in 2007 … reaching that level in 2028. We’ll see. At least, you’ll see. Maybe not me."
Jim Sinclair’s Commentary
Gold share holders read the following and throw out your Prozac:
The ratio spread is limited in time. The ratio spread of short gold shares and long gold futures will end when the spread and results thereof go negative.
Do you have any idea what $1200 means to gold producers at all levels? As the impact of gold at these levels filters through the production process, future earnings are truly golden.
$1200 means 1,000,000 mineable ounces is worth $1.2 billion less the cost of mining.
Even today the hedge fund sellers of future gold are finding it hard to cover the gold share shorts placed when paper gold was purchased.
What a way to chase your tail. Can you imagine if Egon is right and gold goes to $6000-7000?
Every 100,000 mineable ounces would have a value of $600,000,000 less the cost of production. To the earnings statement 1,000,000 ounces would be worth $6-7 billion.
The future of the ratio spread between paper gold and gold shares becomes increasingly difficult when covering the naked shorts on gold shares as you think about what $1200 means to any producing company. Do the math!
Jim Sinclair’s Commentary
If you think the German high court decision on bailouts, the successful sale (albeit at higher interest rates) of bonds of the weaker EU states plus two prior days of active market intervention in the euro is just a coincidence, I will sell you the Brooklyn Bridge for cash at a discount.
Jim Sinclair’s Commentary
Once you dig through the MOPE the truth is not inviting.
U.S. Economy: Trade Deficit Widens as Imports, Exports Decline
By Courtney Schlisserman
June 10 (Bloomberg) — The trade deficit in the U.S. widened in April to the highest in more than a year as exports and imports both declined.
The gap grew 0.6 percent to $40.3 billion, the most since December 2008, Commerce Department figures showed today in Washington. A separate report showed more Americans than anticipated filed claims for jobless benefits last week.
Overseas shipments remained at the second-highest level since October 2008 even after a decline that reflected lower sales of pharmaceuticals, soybeans and generators. Economic growth in Asia may fuel sales at companies including 3M Co., helping cushion the blow from the European debt crisis and a stronger dollar.
The declines in imports and exports follow “big growth in both those categories in March so it could just be some payback,” said Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York. Trade’s contributions to growth will diminish, he said, “particularly now that you have the added factor that the dollar is strengthening and foreign growth might be slowing, particularly in Europe.”
Jim Sinclair’s Commentary
You think he has been reading JSMineset?
Soros Says ‘We Have Just Entered Act II’ of Crisis (Update2)
By Zoe Schneeweiss and Andrew MacAskill
June 10 (Bloomberg) — Billionaire investor George Soros said “we have just entered Act II” of the crisis as Europe’s fiscal woes worsen and governments are pressured to curb budget deficits that may push the global economy back into recession.
“The collapse of the financial system as we know it is real, and the crisis is far from over,” Soros said today at a conference in Vienna. “Indeed, we have just entered Act II of the drama.”
Soros, 79, said the current situation in the world economy is “eerily” reminiscent of the 1930s with governments under pressure to narrow their budget deficits at a time when the economic recovery is weak.
Concern that Europe’s sovereign-debt crisis may spread sent the euro to a four-year low against the dollar on June 7 and has wiped out more than $4 trillion from global stock markets this year. Europe’s debt-ridden nations have to raise almost 2 trillion euros ($2.4 trillion) within the next three years to refinance, according to Bank of America Corp.
“When the financial markets started losing confidence in the credibility of sovereign debt, Greece and the euro have taken center stage, but the effects are liable to be felt worldwide,” Soros said.
Jim Sinclair’s Commentary
If you have not seen this, I assure you it is worth your time.
CNBC Is About To Unleash This Lehman Brothers Monstrosity On Its Viewers
CNBC is set to unleash "The Last Days of Lehman" on its viewing audience this Friday and, from what we’ve seen, their in for, well, something.
Hank Paulson brings it hot and heavy with the F-bombs in this clip, so you may want to turn down the volume as he describes the end of the American Empire.
