Jim’s Mailbox

Posted at 4:34 PM (CST) by & filed under Jim's Mailbox.

Trader Dan,

Appreciate all you do at www.jsmineset.com

That said, I am reading quite a lot these days from various sources about coming currency/exchange controls in the USA, along with the US Government regulations to be implemented that will force US citizens to sell their private gold holdings to the US Government for less than market value.

When are you and Jim going to address this issue "head on"?

If the dollar is going to collapse in value, as Jim keeps REPEATING over and over, then we all know what is coming. What good is gold in the "mayo" jar going to do for use if it will be a criminal offense (prison time) to hold and sell gold privately? And what good will stock certificates of companies incorporated in one country, doing business in another, and traded in still another do for us if we are NOT ready to expatriate from the US?

It would be the icing on the cake for those policies to be implemented… ESPECIALLY after all the criminals in and out of government have stuffed themselves full by feeding on the bailout and stimulus money they have stolen on top of all the money they have stolen prior to this mess erupting. We are truly being governed by KLEPTOCRATS.

It is TOO much for me to take.

I cannot stomach the idea that the ONLY people to be truly punished will be the savers… those responsible enough to pay as they go, to NOT be indebted, and to save their capital which they are so desperately trying to preserve.

PLEASE … even if you and Jim are not inclined to get vocal about this issue…
PLEASE… if you are indeed SERIOUS about helping what will otherwise be true victims….
PLEASE point us in a direction where we can get the info we need to make arrangements now while there is still time.

Thank you,
Ciga Dan B

Dear Dan B,

I will forward this on to Jim to see if he cares to comment on it. My own view is simply – “Why would the feds need our gold?”

The US Dollar is no longer on a gold standard of any type and therefore the Feds do not need any gold to ramp up dollar printing. Once upon a time, that was the case; it no longer is. They can create unlimited amounts of dollars with their electronic printing press – Bernanke as much as said this exact thing not too many years ago.

I am of the opinion that the Feds will at some point bring gold back into the monetary system in order to save the dollar but that will be done by a revitalized gold certificate ratio clause as Jim has mentioned many times on the site. In order for that to be effective, they will be forced to upwardly revalue their current gold price which is officially valued at the ridiculous price of $42 /ounce. The price will rise high enough to balance out the Federal Government’s outstanding obligations which at the rate they are increasing, means a substantially higher gold price. When that occurs, the price of gold will no longer be free floating in the sense that it is today but it will be more or less a type of floating peg for lack of a better phrase. That means it will oscillate around a set price by maybe $100 or so either way or a bit more depending on its level at the time.

When that does happen, it will be time to sell your gold if you are so inclined.

Gold goes through both bear markets and bull markets but when this bull market is over, the price of gold will not collapse like it did back when the last great bull ended in 1980.

Trader Dan

PS if you are still worried, then I would suggest you buy silver instead

Dear CIGA Dan,

Gold will not be confiscated. End of discussion!

Dan has explained the correct reasons why not.

In the 1930s very little gold was surrendered, almost none for that matter.

No one was prosecuted in the 1930s for failing to surrender their gold.



Look at the Berkshire Hathaway Inc.’s 2008 Annual Report disclosed on Feb 28th.


He predicts:

1. "an onslaught of inflation" (page 5): "In poker terms, the Treasury and the Fed have gone “all in.” Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation."

2. An extraordinary Treasury bond bubble  (page 18): "When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary. "

CIGA Christopher


Dear Mr. Sinclair,

What exactly does this mean?


US Treasury and Fed mulling special treasury financing to help Fed manage balance sheet.

"Reuters reports the U.S. Treasury Department and Federal Reserve are considering special Treasury financing and allowing the Fed to issue its own debt among ways to enable the central bank to manage its ballooning balance sheet, a source familiar with the deliberations said on Tuesday. The Fed and Treasury said in a statement earlier in the day that they would seek legislation to give the Fed additional tools it would need to control its balance sheet as it funds a program to support consumer lending that could generate up to $1 trillion in lending."

Dear Marc,

Should the Fed start to issue their own bonds (legislation required) they will compete with US treasuries already out there, starting rates upward. It would be a tactical error making it unlikely to occur.