Jim’s Mailbox

Posted at 11:13 AM (CST) by & filed under Jim's Mailbox.

Jim Sinclair’s Commentary

CIGA Henry offers us an illustration of what the real impact would be of the Federal Reserve stopping QE.

Of course the Fed will not and can not cease or decelerate QE because of the implications.

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Jim,

I greatly enjoy reading your commentary and opinions on the markets and assorted government monetary policies.  Your strong conviction on gold is obviously grounded in a true understanding of what money is and isn’t.  Unfortunately, many of the folks who are figuratively screaming in your ear when gold gets sold down have not taken the time to learn for themselves the history of money and how it has evolved or more aptly dissolved into its current debt backed state.

I am sure you have recommended that these less than committed individuals read the likes of Murray Rothbard, Ludwig Von Mises, Henry Hazlitt, Garet Garrett, Albert Nock, Pearcy Greaves, etc.  What Has the Government Done to Our Money? by Rothbard and Economics in One Lesson by Hazlitt were two instrumental books on my journey to true monetary and economic enlightenment, this from an individual who obtained a dual degree in finance and economics as well as an MBA from several very prominent universities.  Once one starts down the path of learning (in my case re-learning) the truth behind our monetary system and the inherent failures of socialism and government intervention, the conviction to know you are right and ignore all of the noise becomes very easy. Regrettably, people tend to forget or are ignorant to the fact that there is nothing new in this world, just old things happening to new people.

On a separate note, your YouTube video on Divinity and the Amphibious Car video are both classics in their own rights.

Thank you for being a positive and refreshing voice in this more than silly world.

Best regards,
CIGA John

 

Jim,

I was heartened to see spot go to 1624 which undercut the 1636 by a decent amount. Having been an independent trader for 24 years, 10 years S&P, I feel much more comfortable to see a good support level undercut and then run weak handed stops, etc. Now we are starting to get a solid footing underneath us since we took out the 1636 support zone with lots of volatility and then had a vigorous and solid volume rally well off that low.

To this day I only enter that type of trade. Wyckoff called it a spring. I don’t know how your Dad viewed that trade. Anyways, I’ll rest a bit easier this weekend knowing that the very strong hands were coming back into gold the last 24 hours. There will be more volatility, but maybe this could be reassuring for some fellow CIGAs this weekend.

CIGA Scott

Scott,

You have nailed it on the recent two day’s action of gold.

To see Bert trade was like watching an old master paint. I am ok, but I do not qualify to tie Bert’s shoes. His intelligence and courage of conviction was simply stunning. His timing was just uncanny. He even made money in the error account.

We did not do the father-son thing too well, but as partners we became the best of friends. I have no problem telling you that I miss him very much.

Jim

 

Hi Jim,

I hope you stay well so you can be the beacon of light for the rest of us. I just talked with a friend of yours on the phone. He lives here in Panama and is starting a gold and silver metal company buying and selling the product. He told me to ask you how you got fired 9 times – said it was a great story.

Say hi to all your children. I hope you gave them bones for Christmas.

CIGA Steve

Steve,

You know I am JEBS, James Edwin Bertram Sinclair.

Bert fired me 9 times. He had a habit of firing me with his hands. He was a jock and played semi pro base ball in NYC. He was a very tough guy and had no problem scrapping for real. He would roll my chair out the door of the trading room and with one great push send it flying down the hallway as fast as it would go with me on it. One time it was from him accusing me of being a gambler. Another time I was physically fired based on the fact that we were in business to make money, not lose it.

How would you like to have to eat dinner with the man that just fired you for the 9th time?

Bert always had a few dogs. One evening he was walking home from the train station in Hartsdale up Clubway. He had a really big Newfoundland. A neighbor yelled out his window that if Bert’s dog dumped one more time on his lawn he was going to kill the dog. Bert stopped and said, "No you are not." The neighbor yelled back, "Why?" Bert answered "Because he is going to come into the neighbor’s house right now and kill him first,” followed by a lot of banging on the locked front door.

If Bert was a once in a life time character, Marilyn O’Halpin outdid even him. People who knew my family are amazed I survived in one piece.

Jim

Jim Sinclair’s Commentary

Of all my incoming mail today, this was the best. Thank you CIGA Dave.

"Therefore all the MSM Mope, the CFTC blindness, and the Bullion bank manipulation, are part of the desperate last attempts to avoid the inevitable."

Dear Jim,

Twenty analysts surveyed by Bloomberg expect Gold prices to rise next week, and we have to agree with them by looking at the candle formation. A hammer candlestick is normally a good sign that buying interest has started to rise.

Thank you for guiding us Jim in this tough world.

Regards,
CIGA Luis Ahlborn Sequeira

Gold Seen Rallying From Worst Streak in Eight Years: Commodities
By Nicholas Larkin – Jan 4, 2013 12:33 PM ET

Gold traders expect prices to rebound from the longest weekly losing streak in eight years as mounting concern that U.S. lawmakers are doing too little to control the budget deficit spurs demand for a protection of wealth.

Twenty analysts surveyed by Bloomberg expect prices to rise next week, five were bearish and a further two were neutral. While hedge funds cut bullish bets to a four-month low last week as prices slid for a fifth week, investors are holding a near- record amount in gold-backed exchange-traded products that are now valued at $138.5 billion, data compiled by Bloomberg show.

Bullion posted its longest run of annual gains in at least nine decades as U.S. lawmakers this week passed legislation that prevented tax increases for most workers and delayed spending cuts by two months. The International Monetary Fund says the country’s debt ceiling ought to be raised “expeditiously.” While Credit Suisse Group AG yesterday said gold will average the most ever this year, it joined Goldman Sachs Group Inc. in predicting the 12-year bull market will probably peak in 2013.

More…

 

Dear Jim,

I have compiled a list of events, quotes, and facts from several sectors of the financial world regarding gold in the last year. I think it’s important to not only keep an eye on what people are saying, but exactly what are they doing. Below you will find "Just the Facts-2012". Please feel free to Google any one of them to learn more about the details. No opinions or conjecture, pure facts…

Sincerely,
Amir Ness
www.thecovenantgoldfund.com

Famous Investors

Jim Rogers (Co-Founder of the Soros Quantum Fund) publicly stated in December: "I plan on selling federal debt and purchasing more gold and silver."

George Soros Increased his gold investment by 49% in 2012.

Marc Faber Laughed at the news caster who asked him if he thought gold was in a bubble and continued to say this: "It’s nowhere close to that stage; I keep a picture of Mr. Bernanke in my toilet, and every time I think of selling any gold I look at it and know better!"

Rob McEwen former ceo of GoldCorp. (GG) says he’s personally buying gold and silver; predicting that gold will eventually reach $5,000 oz. and silver $200 oz.

Central Banks

South Korea’s central bank purchased 450,000 oz of gold from 2011 to 2012. This represents a 600% increase in a little over 1 year. The central bank was quoted as saying "gold allows us to deal with the changes in the financial environment more effectively."

Brazil’s central bank bought 607,000 oz. in just the last three months of 2012.

Turkey’s central bank purchased 135,000 oz of gold in November, representing a 100% increase from last year’s purchases.

China, we cannot know exactly how much gold and silver China purchases because they only report the amount that goes through Hong Kong. However, we know that China has repeatedly purchased a lot more gold and silver than they admit to. Most recently, the banks in China have begun encouraging people to buy gold and silver coins by airing commercials on Chinese television.

India, gold imports have more than doubled since 2011 and investment demand inside India has reportedly increased 500%.

Germany, The Bundesbank has formally requested the Federal Reserve to return Germany’s gold.

Commercial Banks

J.P. Morgan now accepts gold as collateral.

Bank of America says "Gold will hit at least $2,000 oz in 2013"

Deutsche Bank released a new report, in it they say "We see gold as an officially recognized form of money for one primary reason: it is widely held by most of the world’s central banks as a component of reserves; we would go further to characterize gold as ‘good’ money as opposed to ‘bad’ money, which is fiat currencies.

I thought you would appreciate these facts, void of anyone’s opinion. Next week, I will be sending out a quick word on the new Basel III law that classifies gold as a tier 1 asset within the financial system. This is the process of what is called the "re-monetization" of gold. Gold is working it’s way back into the monetary system, and it has officially started effective January 1, 2013. More next week…

Hi Jim,

The first time you said “QE to Infinity” (several years ago), this guy stashed his gold and then turned his attention to more constructive endeavors.

Some of your readers could take a cue from his example!

It wouldn’t hurt for the dogs to watch this, too.  They all seem to be turning into couch potatoes!

Cheers!
CIGA Black Swan

Chairman Jim,

I suspect that a lot of your readers may well think the Fed is an entity of the government. All the total garbage about the Fed targeting unemployment and so on is beyond ludicrous. They have forever, and now especially this cycle, confirmed that they exist ONLY to insure the profits of the member banks. Nothing else.

CIGA Ursus Terribilis

Jim,

I can’t believe CNN had the total lack of good sense and respect to write this.

CIGA Larry

Forget discouraged, 3 million workers hopelessly unemployed
By Annalyn Kurtz
NEW YORK (CNNMoney)

Employers may be hiring, but there’s another big problem with the job market that isn’t being tracked as closely: the hopelessly unemployed.

An often overlooked number calculated by the Labor Department shows millions of Americans want a job but haven’t searched for one in at least a year. They’ve simply given up hope.

They’re not counted as part of the labor force, the official unemployment rate, or the category the Labor Department refers to as "discouraged workers" — those who haven’t bothered to look for work in the last four weeks.

These hopelessly unemployed workers have just been jobless so long, they’ve fallen off the main government measures altogether.

"The way we’re measuring the long-term unemployed has a lot of holes in it," said Stephen Bronars, senior economist for Welch Consulting. "A person can be discouraged for a while, but then gets bumped over into this other category."

More…

Mr. Sinclair,

At our forum everybody is relaxed. Our members have figured it out years ago already. We are now at the stages of talking because that’s all that’s left.

We have long ago reached the point of no return. The world will feel gold as it never did before. The balance must be balanced (quote of the year). Those panicking have not done their homework.

The ride is never smooth. Keep up the good work!!
CIGA Patrick
goudstudieforum.com

 

Jim,

I am aware of your record – followed you in the 70′s and beyond. Aware of your fathers record and the philosophies of Mr. Livingston. I’ve kept a copy of your "sit tight and be right" comment from last summer. I’ve been keeping the faith. FYI – there is a very good reason I don’t sell my (mostly) gold and (some) silver related investments – there is nothing else I feel comfortable owning in this environment. Even Canadian, Swiss and Australian currency scares me. There is no accounting for the desperation of government bureaucrats and the greed of bankers worldwide.

Have a look at the chart of Apple computers, the most widely held American stock by institutions. While I’m no big chart reader, it sure looks to me like the big money is slowly unwinding their positions.

CIGA Ben

Hi Jim,

I hope you are doing fine.

Its official, you are the ONLY bull left. Seriously. After searching the blogs, chat rooms… everywhere. I have NEVER (since this bull market started) seen such negative comments from

Technicians, “cyclists,” and fundamentalists.

You are the only bull left. All others are either short or have no position.

CIGA Ted

Dear Ted,

I sent you this morning by eblast (if you have signed up on JSMineset.com for the free service) my reasons why I remain convinced that gold will set new highs.

Have you ever considered how bad it must really be out there if the Fed and gold banks are working so hard to paint gold bearish and the US dollar bullish? It must fundamentally be the worst of the various economic crises in my more than 50 years in gold.

There has never been this level of effort to attempt on all fronts to discredit gold. That must reflect the real and dire condition of the balance sheets of the Western world financial industry. Anyone with eyes in their head can see this move has been contrived. In my opinion profit on the short side is a secondary motive.

Today is setting new records for the number of incoming emails that are definitely X rated. The latent and absolutely vicious p hatred in people is also revealing.

Sincerely,
Jim