Jim’s Mailbox

Posted at 10:45 AM (CST) by & filed under Jim's Mailbox.


You are a glutton for punishment. Why you do this for us I have no idea, but I’m so glad you do. Running a gold company is more than enough for one guy.

CIGA Anonymous

Dear Anonymous,

Someone has to do it because this field is packed with well meaning and not well meaning boneheads.

Somebody has to successfully take down the destroyers, thereby constructing the blueprint of how.

Others did it but settled their cases and sealed the records thereby giving nothing to the rest of us.

I love a good fight. I have been fighting all my life.



Dear Jim,

By now you are probably rethinking Harry’s comments to you about “trying to herd cats.”

The ignorance and intellectual arrogance that exists out there stupefies the mind. How being “long gold for 10 years” or “studying Feteke”  suddenly qualifies a person to make condescending type comments to you is a real head scratcher.

I also read Armstrong, however I do realize that much of his activities and energies go into Martin Armstrong’s best interests and nobody else’s. His historical interpretations are interesting, but not always accurate and his views will usually change to meet new circumstances that are better to his advantage. It doesn’t take 10 years of being long anything to see his character.

Thanks for all the nonstop efforts for all gold investors. My 33 year investment practice would be much worse off without your insights.

Very best regards,



We should never forget Bankster’s manipulations and how they discredited their profession. These people should go to jail but unfortunately won’t.

Best regards,
CIGA Christopher

Barclays pays $450m to end Libor probe
By Brooke Masters and Caroline Binham in London and Kara Scannell in New York
Last updated: June 27, 2012 7:01 pm

US and UK authorities have fined Barclays more than $450m for attempting to manipulate the London interbank offered rate, a benchmark interest rate that is used globally to set the price of everything from credit card fees to corporate loans.

Bob Diamond, Barclays chief executive, said he and three of his top lieutenants would waive any bonus for this year “to reflect our collective responsibility as leaders” as the British bank admitted to “misconduct” spanning five years and three contintents in its submissions to the bank panels that set Libor and Euribor, the Brussels rate.

The Barclays settlement is the first shoe to drop in a sprawling probe that was launched by the US Commodity Futures Trading Commission and now spans nearly a dozen regulators and more than 20 banks. Wednesday’s settlements were with the UK Financial Services Authority, the CFTC and the US Department of Justice.

The investigations are continuing and the record fines from the FSA and CFTC are expected to set a basis for settlement negotiations with individuals and other institutions. Libor, the reference rate for $360tn in contracts worldwide, is set by banks submitting rates at which they believe they can borrow in a reasonable market.


Hello Jim,

I am just graduating from high school, and have been reading your website for a couple years now.  My question is what is the best field to get into to help and maybe make a difference? I understand you prefer gold juniors, but you’ve also mentioned ISDA, Federal Reserve etc. Is there a way to maybe reduce the power of these organizations, with the way the system is going in really any country, or at least bring some to justice, and have people at least know what’s happening to them? I don’t want a full plan just a good place to start. I seem to know more than anyone in my school, and most people I know about global markets, and think I could probably be of some help. I’ve been set for awhile that I want to fix a part of the world from its current state, because as you know there aren’t really any places doing well, but really want to get into it now. I’ve got my life ahead of me, and I will learn whatever needs be. 

Thanks a lot,


Follow your heart and seek your happiness.

Finance is sick, full of sociopathic demons and is generally horrible.




I have considered velocity.

It will happen when those hoarding paper money PERCEIVE it’s less risky to hoard other things (any things) then to hold on to something that will eventually be accepted by less and less people (e.g., Chile and China now trading in the renminbi instead of the US dollar as of yesterday, Tuesday, June 27, 2012).

I think you’re saying the change in perception will happen almost all at once to everyone and everything in the market including gold and silver and mining stocks.



Correct. When this comes on the scene it will be instantaneous at full energy.


Notes From Underground: Why Is It That Angela Merkel IS the DESIGNATED DRIVER FOR WORLD FINANCE??
Yra Harris

The G-20 meeting in Mexico resulted in Chancellor Merkel being the PINATA for the other 19 guests as they beat her with the stick of moral certainty. U.S. Treasury Secretary Geithner and President Obama were adamant that it was Germany’s moral responsibility to capitulate and be the co-signer for the European Project and thus the global financial system. The onus was put on Frau Merkel to take the great leap forward and have Germany underwrite all the profligate programs of European nations.


The world’s financial kingpins are all crying for Germany to lead and do the correct thing to save the global financial system, but again, there is no shared political sacrifice! The markets are all TWISTED as rumors fly about whether MERKEL WILL OPT TO SAVE THE GLOBAL CAPITALIST SYSTEM BY AGREEING TO EUROBOND FORMULA BASED ON A FISCAL UNION. As the old commercial goes: WILL SHE OR WON’T SHE, ONLY HER FINANCE MINISTER KNOWS.

It is interesting how Geithner wants others to take the political risk allowing others a free pass. George Soros has another piece in the Financial Times today, “How To Shift Germany Out Of Its ‘CAN’T DO’ MODE,” in which he tries to craft a plan for MERKEL and Germany to follow, calling for a EUROPEAN FINANCIAL AUTHORITY and BANKING UNION and delaying the need a greater political union.

Soros believes that it is paramount for Germany to accede to the demands of Italy and France for less austerity and more growth, otherwise Germany will wind up with itself as the “CENTER OF AN EMPIRE AND PUT THE PERIPHERY INTO A PERMANENTLY SUBORDINATED POSITION.”  He goes on to say “THAT IS NOT WHAT MS. MERKEL OR THE MAJORITY OF GERMANS STAND FOR.” This is a problem, for too many people all think for the Germans while then letting the GERMAN GENERAL WILL SPEAK FOR ITSELF. THIS IS WHY THE MARKET IS CAUGHT IN THE CROSSFIRE OF POLITICS: A fragile global economy and the failure of politicians to lead.

***QUICK HITTER: There was a WSJ article today discussing Japanese auto makers shifting more production out of Japan because of the strong YEN. This morning in Europe and the U.S., the YEN was strong as the JAPANESE DIET moved to raise the Vat tax. The market is looking at the sales tax as being a strain of the economy … again. However, it may mean that the BOJ and MOF may move to weaken the YEN as a counter move to the INCREASED TAX TO IMPROVE THE BUDGET SITUATION. A weaker YEN would stimulate growth and may be a quid pro quo to the fiscal conservatism of some Japanese lawmakers and BOJ policymakers. Hey, how about buying some EUROBONDS IN A COORDINATED GLOBAL EFFORT?



Dear Jim

I have been long gold for 10 years now. I have read your site for 6 years I have also studied monetary systems and their collapse with Prof. Fekete amongst others.

I have read Armstrong.


Without additional QE we tank and take every bank in the world down with us , that obviously cannot be allowed to happen , but deflation as it is currently occurring is happening not because the monetary base hasn’t grown exponentially (it has with every QE injection). But the money IS NOT MOVING.

If it doesn’t move it may as well not be there.

Don’t stress yourself you are 73 , relax like Mr. Fred , don’t get prickly with our arch historian, he may have a point and it may be painted in the graph I linked.



Dear Adrian,

Currency induced cost push inflation will make the velocity of money explode when it occurs in full. It will be the fastest spike up in history. It will be a currency, not business activity event.

Your geniuses are not that intelligent. They have no clue of the impact of currency induced cost push inflation. Thanks, but I do not need your lesson on Velocity of Money. It has been well considered and researched in past situation of similar occurrences.

I got lesson on Velocity of Money many decades ago from the Chicago School. Don’t piss off old guys who are widowers as we have nothing to risk. Stay with your historian that used the gold gang for his own purposes, and now is kissing the ass of who he next wants a favor from.

By the time your beloved chart shows you the spike the entire event will be over and you will find yourself in a strange new world you do not understand.

How the hell can you think that I failed to consider the Velocity of Money?




I’ve followed your site for four years. Like you, I was introduced to the velocity of money concept by the Chicago school which I attended between 1976 and 1978. I understand exactly what you are trying to communicate to your readers about currency-induced cost push inflation which accelerates to "escape velocity" when the desire to hold paper currency becomes too risky in the minds of the masses, and they decide (literally overnight) that the time has come to "escape" that currency before it is totally destroyed.

Just tell your readers to leapfrog the archaic mentality that surrounds the "velocity of money" and think in terms of the "escape velocity of currency" which is what will happen when currency induced cost push inflation achieves critical mass during some 24-48 hour long period sometime in the not-too-distant future.

My sincere thanks for helping us keep the faith, and hold our gold.


Mr. Sinclair,

In all of your decades monitoring and investing in markets, could you have ever imagined a more perfect storm for the global fiat system perpetrated by world governments, and the world believing that printing more money was the answer than now?  It seems so unbelievable that all these billionaires and fund managers could reject thousands of years of history.  It just makes me believe even more wholeheartedly that we are on the verge of a great awakening, maybe not even seen since the collapse of Rome where so many people could be made to believe the unbelievable.  I hope these days aren’t weighing to heavily on you by people making you the defender of gold, when there is no doubt it can surely stand on its own.

Thank You,
CIGA Theodore


You are so correct.




No one can predict the actions of egomaniac politicians that do not know the first thing about economics. Now even Germany is starting to hurt on their exports. It is not only Euroland that is about to take an historic header.


Increasing Doubts, More Liquidity, And Panic Coming

Liquidity will be provided through convoluted means if necessary to postpone the inevitable.  However, the longer politicians talk, stare down markets in order to support external agendas – as long as I live, and pursue ex-post rather than ex-ante policies, confidence will only erode further.  All hell breaks loose when doubts about governments’ ability to solve the problem described below goes supercritical within society.

Headline: Don Coxe – Get Ready, Banks to Collapse In Europe

It used to be that the number that would solve things was $500 billion, then it got to $1 trillion, and now I’m reading responsible people who say, ‘We will really need about $2 trillion over the next twelve months because of debts maturing.’

I just don’t see where that’s going to come from because the European Central Bank doesn’t have money. The IMF has lined up $450 billion, including about $34 billion from China, but that’s not going to be dispensed if you realize that it would be swallowed up in a matter of weeks, and they would be back for more.

She (Christine Lagard) is not going to drain the IMF’s money. So they are going to say, ‘We don’t want the IMF to become purely a eurozone financing bureau.’ It was set up to handle emerging economies, not submerging, old European economies.

As for the European Stability Fund, that’s about $400 billion, and it’s pretty much spoken for. So I don’t know where this money is going to come from.

Meanwhile, within the banking system there is a more immediate problem, and that’s where the $2 trillion (figure) comes from. The $2 trillion includes the money that’s needed, within the European banking system, to cover the fact that they have borrowed huge amounts of money, in dollars, under currency swap arrangements.

The Fed has been supplying a lot of these. A lot of this stuff is not being rolled over. As soon as it matures, they take the money out. So the European banking system is short hundreds of billions in dollar liabilities. That’s something that is of more immediate concern because you’ve got dozens and dozens and dozens of banks that are having to come to the well every other week.

So it could actually be a banking thing that does it, before the governments do. And the governments aren’t really in a position to subsidize their banks when they are desperately coming to central authorities to fund themselves.

If I had to say what will burst the thing, it will be banks that do it. And if banks start to go down, we know from 2008, when banks start to crumble, then the whole system falls. You can postpone the collapse of a government, but you can’t postpone the collapse of a bank if the people are lined up outside and saying, ‘Give me my money.’”

Coxe also added: “Gold’s problem, why it has maxed-out at and pulled back to $1,500, is people say, ‘Well, it had a big move, going from $250 to that ($1,900) level, but it’s still just a theoretical asset, it isn’t doing anything.’ So the moment gold comes into the system and starts doing things, I suspect that’s when we are going to get a significant up-move in gold.”

Source:  kingworldnews.com




While the West is busy in trying to solve the crisis, China’s Wen goes shopping, proposes a free-trade deal with the Mercosur bloc and signs several deals (swap line, credit line for infrastructure projects…) with Latin American countries, bypassing the West and the dollar.

CIGA Christopher

UPDATE 4-China’s Wen offers $10 billion Latin America credit line
Tue Jun 26, 2012 8:50pm EDT
By Anthony Esposito

SANTIAGO, June 26 (Reuters) – Chinese Premier Wen Jiabao wrapped up a tour of resource-rich Latin America on Tuesday by offering $10 billion in credit for infrastructure projects and calling for a joint push to combat protectionism.

Wen proposed a free-trade deal with the Mercosur bloc and signed a series of investment accords during the trip to the region, a key source of agricultural and mineral commodities and a growing market for Chinese exports.

"The Chinese government … will continue to offer economic assistance to countries in the region that are interested," Wen told the U.N. regional economic body ECLAC in Chile, the world’s No. 1 copper exporter.

He said China’s Development Bank would implement a $10 billion credit program for infrastructure projects. He also said China would create a $5 billion fund for cooperation between China and Latin America and the Caribbean.

"We have to combat trade protectionism, broaden the mutual openness of our markets, optimize the trade structure and diversify cooperation in terms of customs and quality control," Wen said. He added that China aims to nearly double trade with Latin America in five years to over $400 billion.


Stockton, Calif., to become largest city to declare bankruptcy

The city of Detroit defaulted on their bonds in 1932. While Detroit may not have sought the protection of bankruptcy, it took them until 1963 pay off these bonds in nominal or vastly depreciated dollars. Municipalities are defaulting. This means currencies will depreciate and history will repeat. Headline: Stockton, Calif., to become largest city to declare bankruptcy

(CBS/AP) STOCKTON, Calif. – Officials in Stockton said Tuesday that mediation with creditors has failed, meaning the Central California city is set to become the largest American city ever to declare bankruptcy. City Manager Bob Deis said officials were unable to reach a deal to restructure hundreds of millions of dollars of debt under a new state law designed to help municipalities avoid bankruptcy. Monday marked the three-month deadline for negotiations. "Unfortunately we have no comprehensive set of agreements with our creditors that would eliminate the deficit and avoid insolvency," Deis said at a City Council meeting. He said, however, that the city was still negotiating with some creditors and could reach deals with as many as one-third of them. "We think Chapter 9 protection is the only choice left. If we get any agreements, those will be honored in Chapter 9," Deis said. The City Council on Tuesday voted 6-1 to adopt a special bankruptcy budget to address Stockton’s $26 million shortfall if the city files for bankruptcy, as expected, by Friday. The river port city of 290,000 in Central California has seen its property taxes and other revenues decline, while expensive investments and generous retiree benefits drained city coffers. In the past three years, officials in the city that was slammed by the collapse of the housing market dealt with $90 million in deficits through a series of drastic cuts. They eliminated one-fourth of the city’s police officers, one-third of the fire staff, and 40 percent of all other employees. They also cut wages and medical benefits.

Source: cbsnews.com



Mr. Sinclair,

The march of the yuan continues!

CIGA Anonymous

HSBC Canada launches commercial yuan savings account
Eric Lam  Jun 27, 2012 – 4:02 PM ET | Last Updated: Jun 27, 2012 4:05 PM ET

HSBC says its Renminbi Commercial Savings Account is the first from a major Canadian financial institution.

HSBC Bank Canada said Wednesday it has launched a yuan-denominated commercial savings account, targeted at businesses that deal heavily in mainland China.

The new Renminbi Commercial Savings Account will allow Canadian companies to complete transactions directly in the Chinese currency. The account does not charge any monthly fees.

The yuan, also known as the renminbi, is the official currency of China.