Jim’s Mailbox

Posted at 12:21 PM (CST) by & filed under Jim's Mailbox.


Some great thoughts from Bill Fleckenstein… sums up the situation pretty well.

CIGA David

“The angst people have about gold, you would think it was down 20% on the year instead of up.  For the last twelve years while gold has been increasing in price, people have been uncomfortable and there has been a lot of talk about the bull market being over.” “With the exception of a few brief periods, when gold did what it was supposed to exactly when everyone thought it should, people have been uncomfortable owning it.  I think that’s the definition of a bull market.

The public isn’t involved.  They will be at some point.  I can’t say what’s going to be the event that’s going to be the psychological sea change which will cause more people to own gold or to start a bond market revolt.

The fact of the matter is that gold has been increasing in price for twelve years.  It’s increased this year and it will probably increase next year.  It’s going to keep going until the politicians do something sane and we have a legitimate currency. That’s not even in the realm of possibility right now.  So gold will be the most unloved, best performing asset for the next few years probably.  I think that the maximum moment for the deflation fear trade is past, and we are in an interlude between that and the inevitable concern which will happen next about inflation or stagflation."

To the CIGA extended family,

When looking at these smashes to Gold and Silver prices, we should find comfort in quotes like the following as we will look back at the 1650-1700 levels and laugh a few years from today.

It isn’t as important to buy as cheap as possible as it is to buy at the right time.
–Jesse Livermore.

Hold tight and stay the course as nothing has been fixed. The debt gets bigger going forward, the printing press will need excessive amounts of Greece (pun intended).

CIGA Perry


Dear Mr. Sinclair,

I am very interested in hearing how you anticipate this possible force majeure for silver by NYMEX playing out.

Just the words “force majeure in silver” brings dreams of a sudden spike to $150.00.

Do you think this might be closer to reality this time?



The article I published had many strong points and some weak points. I consider the Force Majeure as the weakest point, There are no articles that are 100% correct.



GM Boosting Discounts to Sell Trucks Seen as Holiday Gift

Sound familiar?  Heavy discounting and failing sub prime loans forced a government bailout of GM in 2009.

Headline: GM Boosting Discounts to Sell Trucks Seen as Holiday Gift

December is turning out to be a good month to buy a pickup.

General Motors Co. (GM), straining with an oversupply of full-sized trucks, is offering a stepped-up package of incentives on Chevrolet Silverados and GMC Sierras. The incentives may have risen to as much as $5,000 per pickup in December from less than $4,000 last month on Silverados, according to researcher TrueCar.com’s estimates.

Source: more



We might be part of a very small population that is taking notice of the head and shoulders on the $ and the Euro but the $ is looking likely to make a run at Kenny’s 76.85 – 77.75 support if it confirms by breaking the next neckline. Is it right to assume that such formations on currencies have more validity as they are harder for chart painters to mess with? I know you are busy so this is, of course not urgent.

Thanks Jim,
CIGA Peter


Jim Sinclair’s Commentary

Some dogs are really hams. CIGA Ed’s is.



Hi Jim,

Thanks for sharing this debt clock link. http://www.economist.com/content/global_debt_clock

I see why you see the Euro stronger than the USD.  At least their debt is much more under control than ours is. Seems like the US, UK, and Japan are the developed nations most in need of fiscal discipline. And though India and Brazil have debt growing at double digits, they’re still within manageable payback terms, especially if their currencies strengthen in the longer run.

China’s debt is so under control, I see no ‘long term’ growth issues here.

All the best,
CIGA Anonymous

Hostess Maneuver Deprived Pension

Yet another pension to be transferred to the pension benefit guaranty corp?

Headline:   Hostess Maneuver Deprived Pension

Hostess Brands Inc. said it used wages that were supposed to help fund employee pensions for the company’s operations as it sank toward bankruptcy.

It isn’t clear how many of the Irving, Texas, company’s workers were affected by the move or how much money never wound up in their pension plans as promised.

After the company said in August 2011 that it would stop making pension contributions, the foregone wages weren’t put toward the pension. Nor were they restored.

The maker of Twinkies, Ho-Hos and Wonder Bread filed for bankruptcy protection in January and shut down last month following a strike by one of the unions representing Hostess workers. A judge is overseeing the sale of company assets.

Gregory Rayburn, Hostess’s chief executive officer, said in an interview it is "terrible" that employee wages earmarked for the pension were steered elsewhere by the company.

Source:  more




Regarding AIG:

This is rich. The Treasury made a ‘profit’ of $22 billion based on some, we’ll call them questionable, accounting practices. But we’re still printing $45 billion a month (until Operation Twist ends, then it’ll be at least $85 billion), so the ‘profit’ doesn’t even cover half a month of printing. What a great success story for the administration! *gag*




It is becoming clear that it’s not just another silly rule, but a LAW like gravity. I refer to the now routine morning market ‘cram-down’ of the precious metals by the Cartel.

OK, if all you see with your nose pressed against your monitor are the nanosecond-by-nanosecond criminal/fraudulent activity I can easily understand losing sight of the BIG picture for gold/silver vs. dollar-denominated nominal assets. After all, that IS exactly the point. Ignore the long-term and focus on the short-term. One is SUPPOSED to miss the point while the Cartel continues to run the table.

This is what happens when there is no longer any rule of law, but only ‘rules’ under a corrupt Wall Street kleptocracy. This is also a fantastic opportunity to dump paper fiat and acquire physical assets. Hard assets, whether in your hand or in the ground.

Of course, the Swiss-watch precision of the market shenanigans and the FOMC meeting (and Wednesday’s anticipated announcement) are merely coincidental, right?

Wink, wink; nudge, nudge.

CIGA Richard S



G’day Jim,

As a suggestion to your followers with regard to what I’m reading of them "Freaking Out " at the moment on the metals market , could you please pass on my thoughts. It really doesn’t matter what the price of Gold and Silver is on a daily or monthly basis. What really, really matters is that you, your family and pets are safe! Everything else with regard to the BS offered by MSM is just that: BS. Don’t sweat the small stuff people, and it’s ALL SMALL STUFF.

CIGA Daz Downunder


Dear Mr. Jim,

Why do US banks keep all the cash (bailout money refills received) in the 10Y & 30Y bond market? The rates of interest are so low. It cannot beat inflation. Why don’t they deploy this cash into emerging markets or into commodities? Does Ben restrict this type of activity?

CIGA Ashish

Dear Ashish,

1. It is not all the funds that are in far out treasuries.
2.To use bailout funds to buy any treasury is payback to the Fed for the dollar rescue. It is without any doubt QE by proxy.
3. Supposedly the US Fed has nothing to do with emerging markets and commodities.



Dear Jim,

Do you think that over $1,400 trillion of derivatives are going to surface into the real economy some day in a sense that the government will incur that much amount in the form of debt to bail out the banks, the pensioners, the union workers, and anyone else the government can think of as an excuse, thus bringing forth what was in the shadow into the real economy?

CIGA Cheong

Dear Cheong,

The can has been kicked forward on OTC derivatives of the past to all eternity. It is losses on closed positions that the government has so far financed by bailing out the losers to pay the good ole boy winners. If the present notional value of OTC derivatives are not closed, thanks to FASB capitulation of their assigned duty as auditors, there is no loss, supposedly.

The quiet result is that the balance sheets of every major financial entity are total cartoons.