The following is the written version of an interview I did with Ellis Martin of www.EllisMartinReport.com today. Click the link at the bottom of the article to read the full transcript.
TEMR: Join me know for a candid interview with America’s preeminent expert on precious metals, commodities and foreign currencies, Jim Sinclair. Mr. Sinclair is the President of sponsor, Tanzanian Royalty Exploration Corporation, trading on the Amex division of the New York Stock Exchange under the symbol TRX. Tanzanian Royalty focuses primarily on gold assets strategically located in the Lake Victoria Greenstone Belt of Tanzania, one of the most prolific gold producing regions in the world. The company acquired a 55% interest in the advanced stage Buckreef Gold Mine development project which could see commercial production in 2014. Previously to helming Tanzanian Royalty, Mr. Sinclair was the founder of the Sinclair Group of Companies which offered brokerage services in stocks, bonds, et cetera, operating in New York, Chicago, Kansas City, Toronto, London and Geneva. He was an advisor to Hunt Oil and the Hunt family from 1981 through 1984 for the liquidation of their silver position as a prerequisite for the $1 billion loan arranged by former Fed Chairman, Paul Volker. Mr. Sinclair was a general partner and member of the executive committee of two New York Stock Exchange firms and the President of a commodity clearing firm as well as Global Arbitrage, a derivative dealer in metals and currencies. And, we’re pleased to have him as a weekly guest on The Ellis Martin Report. What do you want to talk about today Jim?
Jim Sinclair: We have had key developments in terms of form of settlement nearing in terms of your Greece situation. That has impact on to what is its mechanism and what will that mechanism mean to the general markets as well as equities and the gold market. The announcement of the Chinese of their interest in being part of a euro plan and that demonstrating the IMFs both desire and intention to bring in outside funds in an ongoing supply of liquidity. We also have a great deal of opinions being given on the dollar versus the euro and the implications of some form of resolution even if that resolution eventually includes Greece leaving the European Union. So, there are many subjects that we could approach. I’ll leave it to yourself Ellis.
TEMR: If Greece does leave the European Union it’s something that perhaps the euro can withstand?
Jim Sinclair: You know, let’s look at it and let’s just think about it. What would the euro be without Greece? Would it be weaker or stronger? And, there really is an argument that all other things being even, and that’s a big mouthful, but all other things being even that the euro would in fact be stronger without Greece because of the nature of the Greek population. I mean, when the Department of Finance goes on strike that’s got to tell you something. It’s not an easy problem to fix. So, there’s a strong possibility that general opinion once again has it backwards Because general opinion would say, oh my goodness, if they’re cut down to a 70% maybe no default and Greece voluntarily and in an orderly way exits the euro that’s not so good because look it’s taking away from what the currency unit is and it might start others thinking the same way. I think the real answer to that is that if today Greece was not part of the euro and liquidity had been injected into the system to overcome the impact of the final resolve of what Greek debt is worth be that 30% or zero the euro would be stronger not weaker. And, again that’s something that should be given good consideration. But, the problem goes beyond Greece, I mean, if everything remained equal. It’s very hard for us to accept that one nation in a union would get treatment as Greece has and that more strict requirements would be executed in let’s say Spain, Portugal, Italy, et cetera. So, we’re going to have a continuing drama. But, I think that the near-term resolve of that drama is a combination of liquidity, which is good for the general equities market and also good for gold. We’ve been on that subject over the last couple of weeks and it seems to be holding up to a degree. I mean, right now you have the dollar, as we said, is in an oversold condition but that there was significant supply between 80 and 82 on the USDX. And, the relationship generally would be, well, if the dollars’ going to firm then gold should weaken. I think we’re going to look at that in degrees. I think there might be less of a degree of that relationship rather than more. I think that’s really being demonstrated now even though gold is technically negative on the short-term and the dollar has not yet really established a confirmed positive breakout from the recent decline. I think that the relationship is going to be a little less super glued than it was before. So, generally, I don’t join in those that are very concerned about the equities market except for short reaction, general equities. And, as far as gold is concerned I think the real range will be $1,700.00 to $2,110.00. But, right now it’s $1,650.00 to $1,764.00 where bull camp and the bear camp stand.
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