Jim’s Mailbox

Posted at 7:52 AM (CST) by & filed under Jim's Mailbox.

Dear Mr. Jim,

So Bernanke has been lying to our face, telling us that he is working hard to create employment, when in reality he was helping JP, Goldman, BOA, and so on save their balance sheets from derivative failure. If he continues this way then we will have a stagflationary-recession in the real economy.

If China and many other creditors of America know the above fact, then why would they ever buy US Treasuries again? Leave alone buying, If I were china, I would be dumping their bonds and buying hard assets. Maybe secretly China is doing it because if they officially do it (it would be similar to act of war), then maybe America would release a few nuclear missiles on them to scare them. Maybe recent Japan-China tension was engineered for this purpose, as we know Japan is a salve of America.

So now the USA is openly monetising its own problems, as they have the military and diplomatic might to dictate whatever they like. How long do you think the USA can keep monetizing its own debt? Forever? They will easily raise the debt ceiling and turn the fiscal cliff into a fiscal slope (smooth slope)…

When does confidence completely fail ? Can Confidence EVER fail in a GLOBAL DICTATORSHIP ? They have a DICTATORSHIP over GOLD too by way of paper shorting!

Best regards,


You are correct about the stagflationary economy.

If you add up all the deals China has made dollar based for buying metals, materials and energy worldwide over the past 5 years, they are more than 50% hedged against their dollar risk.

That is almost correct about military and diplomatic might.

They will continue to monetize their own debt as long as they remain the number one military power.

The confidence will fail soon, as defined by a year or two. Confidence can fail a global dictatorship. If they have a dictatorship over gold via paper shorting, then why is Gold up from $249 to $1731?

Respectfully yours,


Hi Jim,

Is there reason to be concerned about the huge commercial (smart money) short position in gold right now? It must change before a good move higher? Throughout the bull market they (commercials) have always been on the right side of the trade haven’t they so far?

Is the lowering of margins on gold and silver positive or negative for the prices? My guess is that they are meant to aid in shorting gold and silver.

I have followed you for at least 5 or 6 years now (lost track) and would probably be lost without your leadership. I own nothing but gold related stocks including a lot of TNX.

Thanks again,


A metals dealer buys the physical from the producer and shorts the future gold to lock in a profit. Then they play that spread to make even more money. I have written lengthy articles on this trying to tell readers that COT figures are important because they influence people, but they can be outrageous lies.