Posted at 3:15 PM (CST) by & filed under General Editorial.

Dear Friends,

This is the third week of June so we should be on the threshold of the major gold move.

I have no doubt that the gold price is going to and through $1000 here on its way to $1224 and $1650. Following that it will move on to Alf’s numbers via its normal drama.

Gold is the inverse of the US dollar and has been manipulated lower via the paper market. Such action creates a coiled spring about to squeeze Jack out of the Box.

Financial TV’s new spin is that crude is the new gold.

What they have missed is that crude is your first example of how a currency has the potential of delivering hyperinflation as cost push without any meaningful demand pull.

Regards,
Jim

Posted at 2:25 PM (CST) by & filed under General Editorial.

My Dear Friends,

There is so much movement geopolitically that I am getting many emails and faxes mentioning intelligence agencies.

You need to keep in mind that the CIA is a government organization broken down into the Ivy League and street kids. The Ivy League government employees are middle to near top, but not top management.

Think about this and know if the doors were opened wide at Langley it would not be a roaring lion that came out, but rather a confused pussy cat.

The street kids prefer to stay out in the cold and represent the heart of the operations.

Those few that come in are patriots.

Those that fear these guys forget it is a bureaucracy run by government and snobs. It works just like all bureaucracies. It does NOT work except in the field.

You worry too much.

Regards,
Jim

Posted at 1:45 PM (CST) by & filed under General Editorial.

Dear CIGAs,

The quick answer is not to the West, not to Europe, but to Kuwait, Saudi Arabia, China, Russia, Kazakhstan and Cyprus.

These people understand the creation of companies, goals, objectives and plans.

The US, Canada and Euroland have become areas of complex paper shufflers used to leverage financial murder, which they seem to be able to get away with.

When is the last time you witnessed any credible underwriter finance a junior exploration, development or mining company that was not a front for a Hedge fund PIPE financing that is a guillotine for the company’s shareholders?

An underwriter for a junior company is a total OXYMORON.

This is not true in the countries mentioned above who have their own technical teams sent around the world to identify mineral potential and secure financing or join in the development and operation.

Majors have become banks with a hole in the ground in their back year by coincidence. They are as pleasant to deal with as Black Beard but not as honest or caring. Their mindset is that of a Bankster.

Their actions are causing them problems in the mineral rich developing nations.

I would dare to say that 90% of problems being experienced by major companies in their host countries have been brought on by their lack of understanding that culture drives conduct and you must not screw your host.

China, Russia, Kazakhstan, Cyprus, Kuwait and Saudi Arabia are the futures of enterprise building major companies in extractive products of the Earth, not the West. The West has given it away by seeking the business of those that destroy as a living.

If you are not there, you are nowhere.

Posted at 7:06 PM (CST) by & filed under In The News.

Dear CIGAs,

Remember my advice from a few years back? If you have not accomplished financial privacy DO NOT attempt to.

Jim Sinclair’s Commentary

A quote from Stratfor concerning Iran on media fascination with a clouded focus:

A Question of Support

This is also what happened in Iran this week. The global media, obsessively focused on the initial demonstrators — who were supporters of Iranian President Mahmoud Ahmadinejad’s opponents — failed to notice that while large, the demonstrations primarily consisted of the same type of people demonstrating. Amid the breathless reporting on the demonstrations, reporters failed to notice that the uprising was not spreading to other classes and to other areas. In constantly interviewing English-speaking demonstrators, they failed to note just how many of the demonstrators spoke English and had smartphones.

More…

Jim Sinclair’s Commentary

Anyone looking for work? The only problem is you have to put a bag over your head for the duration of the ride to and from.

There were advertisement in the New York Post and Bloomberg by the CIA looking for someone that understands OTC derivatives and swaps. That is an admission from government that is unusual.

Don’t apply unless you like water-boarding

Offshore Banking Scandal Continues, But What Indictments?

June 22, 2009 (FinancialWire) (By Bud Burrell) — Going back some six years, I have repeatedly commented on and described the shameful crises of offshore banking, brokerage, hedge funds, naked shorting, money laundering, and support for terrorism.  I have heard promise after promise of additional pending indictments, or recovery of stolen funds, or both, and I have patiently waited for the system to work.

It has all been for naught, as not a single indictment of a material character has come down except for the notorious Amir Elgindy, other than the truncated action against the criminal Badian brothers, and their coterie of facilitators.  The manipulation of Sedona Corporation by this conspiracy should be the best case in the industry, yet all the Federal authorities have done is blow the case by the numbers.  Further, there is even less evidence of any material recovery of the funds spirited offshore by these highly organized criminal enterprises.

I know and have worked closely with many US Attorneys and their investigators from various Federal agencies.  I have seen their frustration with the system.  Probably no one organization has suffered more severely than the FBI, whose retention rate is now approaching the pregnancy term of an Elephant, 20 months.  It is not their collective fault. Rather it is a signal of the wholesale corruption of our political, legal and judicial systems for the protection of hugely funded vested interests, whose integrity is non-existent.

I have repeatedly told the story of how criminals and their facilitators set up complex interlinked and layered structures mixing international business corporations with offshore irrevocable trusts, set up in non-matching venues/jurisdictions, using offshore banks protected in every case by banking secrecy laws.  All of the major global brokers, banks, significant hedge funds, select money managers, and many major corporations have set up all forms of complex special purpose entities (SPE’s) most Americans first heard of in relation to the hiding of profits by Enron.

More…

Jim Sinclair’s Commentary

Iran today and tomorrow.

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Jim Sinclair’s Commentary

The parade marches on.

Three more US banks fail; year’s tally reaches
22 June 2009

The Federal Deposit Insurance Corporation (FDIC) has closed three more US banks, taking the number of failures so far this year to 40.

The latest failures are Southern Community Bank, Fayetteville, Georgia; Cooperative Bank, Wilmington, North Carolina; and First National Bank of Anthony, Anthony, Kansas.

United Community Bank, Blairsville, Georgia, will assume all of the deposits of Southern Community Bank. The offices of Southern Community Bank will reopen for normal business hours as branches of United Community Bank, and their deposits will continue to be insured by the FDIC.

Southern Community Bank is the seventh FDIC-insured institution to fail in Georgia, the sixth being Silverton Bank, National Association, Atlanta, on May 1, 2009.

As on May 29, 2009, Southern Community Bank had total assets of $377 million and total deposits of approximately $307 million. United Community Bank paid a premium of 1 per cent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, United Community Bank agreed to purchase approximately $364 million of assets. The FDIC will retain the remaining assets for later disposition.

More…

Posted at 6:51 PM (CST) by & filed under Jim's Mailbox.

Dear Jim

As some close to me have noted before, Russia has a vested interest in keeping the current government in place for no other reason than to keep anti-Western leaders in power and because they have a strong influence via economics over the current leadership. It seems like the Cold War is getting hotter. Note specific comments I highlighted.

CIGA Omid

Russia says Iran’s election an "internal affair"

MOSCOW (Reuters) – Russia said on Monday it views all issues linked to Iran’s presidential election as the Islamic Republic’s internal affair.

"According to the officially announced results of Iran’s presidential election, it was won by current President Mahmoud Ahmadinejad," Russia’s Foreign Ministry said in a statement.

"We consider all issues linked to Iran’s election as this country’s exclusively internal affair. ******We believe the discords that emerged after the election must be settled in strict conformity with the Islamic Republic’s constitution and laws."******

Iran’s opposition leader Mirhossein Mousavi, who was officially beaten into second place by Ahmadinejad in an election Mousavi says was rigged, called late on Sunday for fresh protests by his supporters.

Iran’s hardline Revolutionary Guards threatened on Monday to crush protests.

More…

Dear Jim,

I meant to say, I understand General Schwarzkopf wrote a paper identifying the Middle East as the likely flashpoint for World War III. Perhaps it’s apochraphyl, but it makes sense; he went to school in Iran at the age of 12, he’s fluent in three languages. He is one of the most decorated soldiers in US history and it’s likely he had some observations in the area. In the meantime, America, if they militarily engage Iran directly or indirectly, is about to open a three front war and find itself sandwiched by hostiles (if that’s not a contradiction) who know the terrain and employ alternate tactics (and, I’m afraid they look different, as do we!).

At the same time, both China and Russia have oil and gas interests in Iran. So… as Iran goes hot, the US grows restless for resolution, the Chinese observe uneasily and the rest of the world is nervous and agitated.

Medvedev won’t help either, questioning the longevity of the current global status.

Turkey is shopping for a partner, Iraq is in combat and the Saudis are waffling. The Winds of War blow ill.

CIGA HK

Reference geography:

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Jim,

The time has come, the walrus said,
To talk of many things.
Of ships, of shoes, of sealing wax,
And whether gold has wings.

CIGA Lewis

Dear Friends,

Gold has wings, and will flex them very soon.

Regards,
Jim

Dear Jim,

We have all seen anecdotal evidence of this recession/depression in the form of half empty restaurants, bankruptcies, etc. These charts of consumer spending worldwide are simply shocking. We know consumer spending is 70% of the US economy. Clearly, the consumer is hunkered down worldwide.

CIGA Doug

Retail Sales in Asia: Australia and China holding on

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Jim,

The problem with things now as I see it, is that yes, shares will double; but from here they will have to at least double simply to break even with a year ago or so. So the question becomes, will they do better than that? If they don’t, I for one will be risking my life working as a Walmart greeter and hoping some madman doesn’t blow me away trying to steal a loaf of bread.

CIGA Bob

CIGA Bob,

If the underlying asset grows in value geometrically what makes you think all you can anticipate from shares is arithmetic?

Actually the leverage lies in the share, not the metal.

If I am wrong every viable junior will be purchased by the Chinese and Russians.

I will prove that to you soon.

Jim

Jim,

"This is a paper gold operation and in all probability the event that they were looking for in the present manipulative operations before we breach $1000."

Jim, you’re going to look like a prophet soon. There’s still some paper work to be done so the selling window remains open for now. The greater the price decline, the greater the extent of cover covering during the operation. When the boat goes from short to long overloaded, the operation to run the weak hands will be over.

Are the CIGAs ready for it?

CIGA Eric

Posted at 1:55 PM (CST) by & filed under General Editorial.

Dear CIGAs,

Those that discount inflation, as many are doing today, because of the unlikely nature of demand pull caused inflation are economic ignoramuses.

I agree there will be little if any meaningful demand pull caused inflation.

Inflation this time is totally tied to the US dollar and when it surfaces will be COST PUSH CAUSED INFLATION as dollar weakness is translated into the cost of raw materials and food, even with same or moderating demand.

In all experiences of major QE lasting more than one year, the outcome has always been currency motivated cost push inflation in terms of the currency in question.

Since there is no practical means of draining the quantitative easing as it is an international occurrence across many forms of debt, there is no practical means of avoiding currency related cost push inflation. Any other opinion is dead wrong and speaks to the lack of economic training and experience of the speaker/writer.

Basis for Complacency

The unprecedented amount of monetary creation is being entertained because financial leaders see demand push inflation as highly improbable.

There is no quick fix to this business contraction because the cause is yet to be focused on: the enormous amount of OTC derivative instruments that cannot be dealt with in any practical manner. They are contracts for special performance that lack standards that prevent listing or clearing and are unfunded.

The West is in for a long period of slow business activity.

What is not being considered is the future of Western economies and that the dollar is based on confidence, a very subjective and fickle element to depend on.

The problem faced then is a cost-push inflation that has nothing whatsoever to do with the level of business activity.

This cost-push inflation is a currency related phenomena, which historically occurs as a result of QE when confidence in the currency of the practitioner nation begins to lose value at an accelerating rate. The result has always been a currency driven hyperinflation that takes birth in the worst of business condition.

“The main cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services.”

Posted at 1:03 PM (CST) by & filed under General Editorial.

Dear CIGAs,

IMF sales of gold is the least meritorious reason for a market decline since we met each other.

Today gold came in through Asia into London and the continent trading at $932-$935

Please note the time that selling entered the market was as eyes opened in the East Coast of the USA.

This is a paper gold operation and in all probability the event that they were looking for in the present

manipulative operations before we breach $1000.

Sales of gold by the paper traders using either no inflation or IMF sales as an excuse will prove to have been nonsense under the present circumstances.