Posts Categorized: Jim’s Mailbox

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Dear Friends,

If the Comex thinks they have me scared of gold suggest they look at this.




"The International Monetary Fund is poised to embark on what analysts have described as "global quantitative easing" by printing billions of dollars worth of a global "super-currency" in an unprecedented new effort to address the economic crisis. "

Amazing what is spun as anti-gold. Super currency? Who are they fooling?


Posted by & filed under Jim's Mailbox.

"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."
–Antony C. Sutton


I spent most of the day burning brush and watching the leaves on the brush flare up reminded me of dollars. I got to wondering how much land the 1200 trillion dollars in at or near worthless OTC derivatives would cover. If my math is right, the answer shocked me.

  • one sq foot = 12" x 12"
  • one dollar = 2.61" wide x 6.14" long
  • roughly 9 dollars to cover a square foot.
  • one sq acre = 43,560 square feet
  • 43560 sq ft x 9 dollars per sq foot =
  • 392,040 dollars to cover a square acre.
  • 640 acres is one square mile
  • 250,905,600 dollars to cover a square mile
  • 1200 Trillion dollars in at or near worthless OTC Derivatives will cover 4,782,675.24 square miles.

That made me wonder how much of America would be covered by one dollar bills? I Googled square miles of Texas and found the following: The answer is shocking:

So 1200 trillion dollars in worthless paper would cover all of the United States and Mexico with 486,785 square miles left over to cover other lands with.

Best Regards,
CIGA Daniel

Dear CIGA Dan,

I am sure you will launch every math geek in the gang, but you worked so hard I am obligated to post this.

The point is made. These OTC derivative demons have killed us all to some degree, creating a problem for which there is NO practical solution.

They have been bailed out with our tax dollars.



Regarding Bernanke on 60 Minutes Sunday:
Did you watch him on the show last night? He is forecasting the end of the Recession/Depression by the end of 2009. What is he smoking? I think he needs to review Jim’s Formula!!


Dear Ian,

He may really believe himself. If so then he is in real trouble.



Dear Jim,

China was mentioned in the Financial Times Lex column today. Part of the article is duplicated below.

“The Country (China) now boasts three of the world’s top 10 companies by market capitalization. It has the world’s biggest bank, Industrial and Commercial Bank of China, and the world’s largest telecoms operator, China Mobile. Petro China is second only to Exxon Mobil, while life assurer China Life is second to none."

"Chinese and US banks have switched places in other ways. Remarkably, the US has a bigger proportion of banking assets in state hands and also more red ink. ICBC, by contrast, made more net profits than any other bank in 2007, and earned nearly $14 billion in the first nine months of 2008.”

As we have often said, the Chinese think for the long term, and this attribute will serve them well as they grow to world economic dominance.

China continues to buy oil assets, base metals assets, and other mining assets worldwide to stoke the fires of their economic machine. We believe that this pattern will continue, especially while good assets can be acquired and while economic nationalism is being muted by the global economic decline.

Respectfully yours,

Monty Guild


Like you said, where is this diplomacy in the US? Where is the outrage? How is it that these people are standing up to the banks and we aren’t? I am pissed every day that our banks are getting away with this. I’m ready to march – lets go to DC…


EU banks must disclose toxic assets for aid
By Nikki Tait in Brussels
Published: March 14 2009 12:13 | Last updated: March 14 2009 12:13

Banks must disclose their problem assets if they want to avoid lengthy wrangling with Brussels over aid schemes, Europe’s top competition watchdog warned at the weekend.

In a tough-talking speech, EU competition commissioner Neelie Kroes told executives that she would not sign off on restructuring schemes under European Union state aid rules if banks continued to conceal their troubled assets.

”To protect taxpayers and maintain the level playing-field, the public purse will simply not be open to banks who do not want to open their books in return,” she told a conference, organised by Deutsche Bank.

Ms Kroes expressed frustration at the way banks had been behaving to date. ”In many recent meetings with bank chief executives, I am told their bank is fine, but the other banks have problems. They cannot all be right,” she said.¬

”So the high levels of transparency we are demanding are essential for determining the full scope of our collective problems and rebuilding trust.”



I would bet there will be a lot of people buying these bumper stickers, well, at least a lot of taxpayers…


Your CIGA in the Mortgage Finance Industry

Posted by & filed under Jim's Mailbox.

Dear CIGAs,

The following is for my CIGAs flying as passengers and pilot friends. The following is purported to be real:

Never let it be said that ground crews have never lacked a sense of humor. Here are some actual maintenance complaints submitted by UPS ‘ pilots (marked with a P) and the solutions recorded (marked with an S) by maintenance engineers.

By the way, UPS is the only major airline that has never, ever, had an accident.

P: Noise coming from under instrument panel. Sounds like midget
pounding on something with a hammer.
S: Took hammer away from midget.

P: Test flight OK, except auto-land very rough.
S: Probably because auto-land is not installed on this aircraft.

P: Something loose in cockpit
S: Something tightened in cockpit

P: Dead bugs on windshield.
S: Live bugs on back-order.

P: Autopilot in altitude-hold mode has a 200 ft. per min. descent.
S: Cannot reproduce problem on ground.

P: Evidence of leak on right main landing gear.
S: Evidence removed.

P: DME volume unbelievably loud.
S: DME volume set to more believable level.

P: Friction locks cause throttle levers to stick.
S: That’s what friction locks are for.

P: IFF inoperative in OFF mode.
S: IFF IS inoperative in OFF mode.

P: Suspected crack in windshield.
S: Suspect you’re right.

P: Number 3 engine missing.
S: Engine found on right wing after brief search.

PS: Aircraft acting funny
S: Aircraft warned to straighten up, fly right and be serious.

P: Target radar hums.
S: Reprogrammed target radar with lyrics.

P: Mouse in cockpit.
S: Cat installed.


About this article…

"Stewart has charged that people at CNBC knew what was going on behind the scenes on Wall Street but didn’t tell the public. He has accused CNBC anchors and pundits of abandoning their journalistic duties and acting like cheerleaders for the market.

"In a tremendous boom period, they covered the boom and people wanted to believe in the boom," said Andrew Leckey, a former CNBC anchor and now president of the Donald W. Reynolds National Center for Business Journalism at Arizona State University. "They didn’t uncover the lies that were told to them. Nobody did. But they should be held to a higher responsibility."

But Don Hodges, chairman of Hodges Capital Management in Dallas, said he doesn’t fault CNBC for not seeing the bust coming.

"I’m not sure that anybody had seen it coming," he said. "I’ve listened to all of the so-called experts, and it’s obvious that everybody is very confused."

Oh really, no one saw this "coming"! Many people saw this coming but journalists were not taking the problem seriously. This is a little missive from March of 2008.

Have a nice weekend and welcome to hell!
CIGA Greg Hunter

Dear CIGA Richard,

I trust you are doing well in Tbilisi.


The answer to your question of what is the notional value of all OTC derivatives outstanding must now be answered by interpolation as the Bank for International Settlement has adopted the Shiller approach of "Value to Maturity."

The assumption required to determine what the financial conditions will be at the maturity render the conclusions another computer cartoon, but pleasing to the statisticians working for the bank 30% lower in notional value.

The number issued prior to the change of method of calculation was one quadrillion, one hundred and forty four trillion dollars.

This has been reduced to 700 trillion dollars.

Now we need to increase any BIS total OTC derivative total notional value figure by 30% to approach the real notional value of OTC derivatives outstanding.

Start with the most recent number of 700 trillion, recognizing this number is but 60% of the real number. Then consider that in bankruptcy notional value becomes full value.


There is no way OTC derivatives can ever be traded on an organized exchange primarily because there is no standard arrangement in the specific performance contracts. It is implicit that to have a clearinghouse function where the winner gets paid and the loser pays in daily true valuation has to be easily arrived at.

Going forward, exchange listings for certain types of derivatives is probable.

Going forward is not the problem. Looking back is the disaster.


In the sense of the need to adjust those that they have in terms of market changes, yes.

Good to hear from you.

Respectfully yours,

Dear CIGA Randy,

You ask about when to sell gold.

There is a good argument that gold will not fall like it did in 1980.

As gold reaches $1650, we will examine the sell question, but before that there is no need.



I thought you might get a kick out of the following link to the Application for Federal Bailout 2008 – 2009.

Click here to view the application…

You may have already seen this, but if not… enjoy.

As they say…. the truth is said in jest.



Dear Jim,

Maybe they should buy 165 million in lead and shackle it to all the legs of the AIG people who get "bonuses"! Rewarding dishonesty and stupidity, or should I say incompetence, is disgusting! They need to be tried for treason!


Obama team anger simmers over AIG bonuses
Sun Mar 15, 12:38 PM
By John O’Callaghan and Philip Barbara

WASHINGTON (Reuters) – The Obama administration has done all it can to discourage big bonus payouts by American International Group Inc, advisers to the president said on Sunday, as anger rose over the embattled insurer’s plans.

AIG, which has received three U.S. government bailouts totaling $180 billion, is at the heart of a global financial crisis that President Barack Obama is trying to address with plans for trillions of dollars in spending.

The economy dominated Sunday’s television news shows, with several of Obama’s top advisers and senior Republicans squaring off over the financial sector bailout and healthcare reform.



This article states that 49 mainstream economic forecasters are losing faith in the current administration because of its failure to create a viable plan to stabilize big U.S. banks.

Geithner testified on Thursday that, "It requires different approaches, and to solve it we’re going to have to work with the market, because we don’t want the taxpayer and the government taking all those risks on the government’s balance sheet and leaving the government with huge, incalculable losses — risks we cannot manage effectively."

It seems to me that his admission that the losses would be "incalculable" is tantamount to saying what you’ve been saying all along: "There is no practical solution to the OTC derivative problem." Hats off for figuring this out years in advance!

CIGA Wallace

Obama’s econ failure: Still no plan to fix the banks
Kevin G. Hall, Mcclatchy Newspapers – Thu Mar 12, 5:26 pm ET

WASHINGTON — The Treasury Department has failed to persuade the world that it has a viable plan to stabilize big U.S. banks, and unless and until it does so, the economic downturn at home and abroad is unlikely to bottom out.

Federal Reserve Chairman Ben Bernanke has said as much, telling Congress last week that "restoring a reasonable degree of financial stability will be critical determinants of the timing and strength of the recovery."

Yet experts warn that each week that goes by without a credible bank plan puts an economic recovery and public confidence in President Barack Obama at risk.

A McClatchy-Ipsos poll this week found that 65 percent of Americans still approve of Obama. However, a Wall Street Journal survey of 49 mainstream economic forecasters this week found that this elite group — which influences public confidence — is losing faith in Obama and in Treasury Secretary Timothy Geithner .


Posted by & filed under Jim's Mailbox.


In every scenario of hyperinflation this choice has been available but rarely taken.


Or …


It has always been your choice. We are here to deliver.


Fort Wealth Trading Co. LLC
866-443-0868 ext 104

Dear Jim,

Regarding The Chinese, how do you guarantee a Treasury instrument?

Dr. Bob

Dear Dr. Bob:

I interpret it differently as it may pertain to the G20 picnic and their criticism of the Yuan.

Taken literally, it would mean the Agency Paper they hold in abundance, Freddie and Fanny.


Posted by & filed under Jim's Mailbox.

Dear Jim,

This is a pretty good explanation of the financial crisis.


"Heidi is the proprietor of a bar in Berlin Germany. In order to increase sales, she decides to allow her loyal customers – most of whom are unemployed alcoholics – to drink now but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around and as a result increasing numbers of customers flood into Heidi’s bar.

Taking advantage of her customers’ freedom from immediate payment constraints, Heidi increases her prices for wine and beer, the most consumed beverages. Her sales volume increases massively.

A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and increases Heidi’s borrowing limit.

He sees no reason for undue concern since he has the debts of the alcoholics as collateral.

At the bank’s corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS. These securities are then traded on markets worldwide. No one really understands what these abbreviations mean and how the securities are guaranteed. Nevertheless, as their prices continuously climb, the securities become top-selling items.

One day, although the prices are still climbing, a risk manager (subsequently of course fired due to his negativity) of the bank decides that the time has come to demand payment of the debts incurred by the drinkers at Heidi’s bar.

However they cannot pay back the debts.

Heidi cannot fulfill her loan obligations and claims bankruptcy.

DRINKBOND and ALKBOND drop in price by 95%. PUKEBOND performs better, stabilizing in price after dropping by 80 %.

The suppliers of Heidi’s bar, having granted her generous payment due dates and having invested in the securities are faced with a new situation. Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor.

The bank is saved by the Government following dramatic round-the-clock consultations by leaders from the governing political parties.

The funds required for this purpose are obtained by a tax levied on the non-drinkers.

Finally an explanation I understand…"

Dear Mr. Sinclair,

According to Martin Armstrong: "We may be in the midst of a "Waterfall Effect" that could undermine the very structure of Western Civilization. Historically, it has always been the debt crisis that destroys the greatest plans of men and dictators. This could be phase two of the collapse of Marxism. After phase one reshaped Russia and China, phase two may mean that it is the United States’ turn."

He goes on to state: "I cannot stress enough that the level of volatility that we are experiencing during this financial crisis is just well beyond even that experienced during the early stages of the Great Depression and is more akin to the collapse of Rome."

He concludes with the following: "We are on the edge where the way of life may be altered forever."

And now for the bad news…



I wish it were not true, but the last many years, most certainly the last, has busted the West making them stone cold broke. Gold is the only answer. There is nothing else!

Armstrong, although certainly colorful life wise, is a genius – a word I rarely use. To not take heed will cost you greatly!

I strongly recommend that you and all readers of JSMineset see the interesting movie "W."


Martin Armstrong: Is It Time To Turn Out The Lights?
Posted: 03/11/2009 21:27:45

This Economic Depression is far more complex than meets the eye. I believe that the Investment Bankers, in their own greed, used the final days of the Bush Administration to try to grab as much as they could while there was an ex-Goldman Sachs boss in the driver seat.

Full Story:

Click here for original source…

Posted by & filed under Jim's Mailbox.


The latest UBS report on gold (Click here to view the report in PDF format) says that it can potentially go to US$2,500/oz.

The exact wording is:

"Using a proprietary econometric model we have generated a probability cone for the future possible price path for gold. Using different environments for the level of inflation volatility, US dollar and absolute level of inflation we have determined that future returns on gold are likely to be positively asymmetric, with potential upside to US$2,500/oz."

They note that gold is a hedge against deflation and inflation particularly if the source of that inflation is loose monetary policy.

They recommend exposure to gold and favor gold shares.


Hi Jim,

"The Swiss bank, one of the most active gold dealers, warned of "a potential upside of $2,500 an ounce" as some hedge fund investors who made money last year by betting against investment banks are now buying gold as a way of betting against central banks."

This article appears in and I thought you should see it.
For all the latest news around the globe, check out ninemsn.



This is because UBS spent more time talking about meaningless central bank gold sales. It was that which was put up on Bloomberg every 4.5 minutes from 8:30 AM to and through the end of Bernanke’s speech and pre-screened friendly question interview.

Since the gold guys spend more time looking for why they are wrong the Comex had its way with gold one more time.

Respectfully yours,

Actual ‘Letter to the Editor’ from the February 5th edition of the Wichita Falls , Texas Times Record News…

Dear IRS,
I am sorry to inform you that I will not be able to pay taxes owed April 15, but all is not lost.

I have paid these taxes: accounts receivable tax, building permit tax, CDL tax, cigarette tax, corporate income tax, dog licence tax, federal income tax, unemployment tax, gasoline tax, hunting licence tax, fishing licence tax, waterfowl stamp tax, inheritance tax, inventory tax, liquor tax, luxury tax, medicare tax, city, school and county property tax (up 33 percent last 4 years), real estate tax, social security tax, road usage tax, toll road tax, state and city sales tax, recreational vehicle tax, state franchise tax, state unemployment tax, telephone federal excise tax, telephone federal state and local surcharge tax, telephone minimum usage surcharge tax, telephone state and local tax, utility tax, vehicle licence registration tax, capitol gains tax, lease severance tax, oil and gas assessment tax, Colorado property tax, Texas, Colorado, Wyoming, Oklahoma and New Mexico sales tax, and many more that I can’t recall but I have run out of space and money.

When you do not receive my check April 15, just know that it is an honest mistake. please treat me the same way you treated Congressmen Charles Rangel, Chris Dodd, Barney Frank and ex-Congressman Tom Daschle and, of course, your boss Timothy Geithner. No penalties and no interest.

P.S. I will make at least a partial payment as soon as I get my stimulus check.

Ed Barnett
Wichita Falls


We live in an age marked by stupidity and ignorance even though we have the most advanced technology and means of conveying information ever devised yet by man.

Sitting here watching these dumbasses throwing gold out the window in the midst of what is occurring is something I did not believe men were capable of.

I guess we all learn each day… never underestimate the ability of the American citizen to be so damn dense….

CIGA Frustrated

CIGA Frustrated,

To this all I can add is AMEN Brother.




Have you been asked by the decision makers for advice? I guess not as you will tell like it is.

Everyone knows (at least by now) what the truth is but to take the right path is too damn hard to take.

Such brilliance in your analysis and a shame you are not being consulted and then to listen to the garbage from the media experts, talking heads, etc.

I guess the day Man can legislate Conscience it will be the end, but it is impossible.

Another enlightening comment: God created earth, water and air for all the living. Two of them man has been able to legislate – i.e. mine, yours… Air is the only thing man has not been found to be that brilliant to legislate. Just imagine if they could legislate AIR!!

CIGA Shakeel

Dear Shakeel,

It was a great American, Chief Seattle, that asked; "How can you sell air?" Wall Street did. Air is called OTC derivatives.

If governments took only one thing I know seriously, I would hope it is the danger of Pakistan in Taliban hands. That one can change the face of the planet.



Dear Jim,

I remember seeing many years ago a chart of a cup and handle for gold, it appears we have another one! It looks like gold will double very soon.

Again you look spot on for your target of 1650 on or before Jan 14, 2011!




Yes, and there is no power on the planet that can stop this. The consequences of these actions are only a matter of time.


Posted by & filed under Jim's Mailbox.

Hey Jim,

Saw a news flash that Barney Frank, I don’t know why him, said the uptick rule would be restored in a month. Thus, the market begins the short covering rally? Look for confirmation.




Warren Buffet may be a great investor, but as a political commentator he is no “oracle”. Buffet wants Wall Street and the financial community’s destruction of the world to go un-assuaged. Yesterday, his consistent use of Pearl Harbor imagery to describe the current financial mess is misleading and erroneous. He claims that no further attempts to find those culpable of crime will serve any purpose and prescribes a coming together and unity of purpose that the Pearl Harbor attacks produced. But who then, Warren, is the enemy we shall come together and unify against? At whom shall we direct our volleys of cannon fire? Buffet wants Wall Street and the financial community’s destruction to go un-assuaged. He likes war imagery, and then tells us to forget about war… just engage in unified purpose of restoration, preferably of the status quo, with minor amendment. He wishes no one held to account. Buffet is a coward; a special interest. His words do not deserve heed. No justice, no peace. The crooks must be held to account and face real justice. They are easily identifiable.

CIGA Pedro

Posted by & filed under Jim's Mailbox.


Some say the biggest gold short or manipulator in the world is none other than the Federal Reserve. The Fed is not part of the government and is not really a reserve. It simply is a subcontractor for monetary policy in the United States. Can you please tell us why the Fed will ultimately fail in suppressing gold and for that matter silver? Just to get your creative juices flowing here is a little exchange the took place in Congress recently between Fed Chief Ben Bernanke and US Senator Bernie Sanders from Vermont.

“’My question to you is, will you tell the American people to whom you lent $2.2 trillion of their dollars? Sanders asked, referring to the size of the Fed’s balance sheet.
…The central bank chairman replied,"NO."
Bernanke said the Fed’s lending programs were not gifts or subsidies but rather over-collateralized loans.
"We have never lost a penny doing it," he said."
–U.S. Senator Bernie Sanders (I – VT) and Fed Chairman Ben Bernanke (Reuters, March 3, 2009)

Senator Sanders is introducing legislation demanding the Federal Reserve disclose who it is giving taxpayer dollars to. I, as many, appreciate all you do to protect wealth.

Greg Hunter