Posted at 10:49 PM (CST) by & filed under General Editorial.

Dear Friends,

The outrageous machinations of the market place, as Trader Dan has described to you this afternoon, are a combination of hedge funds attacking by shorting the middle European low cap currencies, the Cando and the Down Unders, which by mirror reflection display an image of temporary dollar strength.

One of the tools of a short against a country’s currency is to work the Default Derivative Index violently upwards on the bonds of that country, thereby making the debt of the country look terminal.

All of this is feeding into the EUR/USD cross rate. Markets in securities and general commodities are in turn raked by the emotional fallout of paper implosions in the currency markets. As the hedgie sharks eat each other only a few fat hedgie sharks remain. The mega wealth they represent will in time turn their big guns broadside to the US dollar and long side to gold, producing levels on both that few consider possible, even today. It must happen because already the algorithm of gold is beginning to demand it.

As the hedgies go for cover in the middle European currency units, the momentum of the dollar will roll over, triggering the early dollar algorithm to magnetize money to the short side.

The same fund right now raping the middle European currencies will eventually dig a grave for the buck.

World flows of money know no human feelings, but like the demons at their heart, spread death and destruction wherever they flow. It is like a massive volcanic eruption poisoning the air and water, bringing with it a planetary malaise.

Remember that JP Morgan had to get Jesse Livermore to agree to stop raiding stocks, commodities and currencies short before Morgan could rescue the US banking system from a credit lock up.

I may be the only one who knows why the world is ending in the equity markets and why no 1930 style rally with staying power can occur until certain procedural trading matters are worked out

Hell has broken lose. It will be more than two generations before this plague of greed is overcome. This is not a short-term aberration. It is a cataclysm brought about by the uncontrolled greed of an army of sociopaths.

Gold is the only safe haven because unlike paper money it is impossible to create twice as much with the strike of a bailout plan pen.

Gold is your only insurance.

Gold is the difference from being the cause of your future or a victim of this colossal theft of unprecedented proportions. Be a survivor, and save yourself for you and your families sake.



Jim Sinclair’s Commentary

The South Koreans central bank knows exactly what is going on as this article shows. Please read it as it is a clear road to understanding what I have been trying so hard to enlighten you on regarding the reasoning for an appearance of dollar strength that is limited in time.

" In a warning to hedge fund traders who may try to take advantage of a currency shortage, the government threatened to intervene in currency markets to support the won against perceived manipulation. Region wide expansion of currency swap arrangements denominated in dollars from 80B to 120B is being pursued at this week’s ASEAN+3 Finance Minister’s Conference."

Here also is an example of the technical dollar flows that have nothing to do with the underlying dollar fundamentals which means there will be an eventual collapse.

Did Minerva Actually Do the Government a Favor
23 FEBRUARY 2009

Though it may not have been his intention, Minerva may have actually done the government a favor with his post late last year predicting a "Yellow Rabbit" crisis during late February to March of this year.

It was this prediction that put him in the legal cross-hairs of Lee Myungbak’s government. His since fired finance minister, Kang Mangsoo, publicly responded and even offered to meet one on one. When a man named Park was arrested, jailed without bond and indicted for being Minerva, the original charge was related to Minerva’s claim that the government had told currency traders to stop selling won and buying dollars on December 27th. Nevertheless, it was the March crisis prediction that really set the government on edge.

The problem is that the Korean banks and other financial institutions borrowed a lot of money denominated in foreign currencies, particularly the Japanese yen and the American dollar. A lot of that money is coming due over the next month or so and Minerva’s fear was that Japan banks, most of which close their books at the end of March, would not want to continue financing Korean financial institutions. This situation would be exacerbated by Japanese hedge funds (or Yellow Rabbits) betting aggressively against the won and foreign indirect investment money (money invested in the bond and stock markets) flowing out of Korea.

The Korean government’s responses to Minerva’s post were two-fold. First, they set out to find and arrest him, a strategy which made them look foolish at best and repressively anti-democratic at worst. Their second strategy, however, was to proactively take steps to prevent a liquidity crisis. Lee’s government negotiated currency swap agreements and this week announced an open ended expansion designed to prevent the very crisis Minerva predicted. In a warning to hedge fund traders who may try to take advantage of a currency shortage, the government threatened to intervene in currency markets to support the won against perceived manipulation. Region wide expansion of currency swap arrangements denominated in dollars from 80B to 120B is being pursued at this week’s ASEAN+3 Finance Minister’s Conference.

Personally, I don’t see a major collapse this March, primarily because it’s become so widely known and the Korean government has taken the necessary steps. Also, the Japanese are hurting as bad as anybody with the overly high yen killing Japan’s economy. Real exports fell at an annualized rate of 45% in the fourth quarter of 2008, the last quarter for which we have data. Industrial production has fallen 50% on an annualized rate since September. Thus, the Japanese banks and government have just as strong an incentive to help Korea through whatever liquidity issues emerge as Korea does, because they would be badly hurt by any further unwinding of the yen carry-trade and escalation of the yen.


Posted at 10:29 PM (CST) by & filed under In The News.

Dear CIGAs,

You may have to break with the crowd to protect yourself. Do it!



Jim Sinclair’s Commentary

The Detroit News reports this evening that the three top men in charge of rescuing the US auto industry own and drive non-US vehicles. It seems that the Secretary of the US Treasury and top economist Summers all own Japanese cars. The background checkers for President Obama are total zeros who have let him down badly.

How is it not hard to understand with major US car manufacturers stockpiling their products, trying to hold the prices high while giving back nothing compared to their price? Maybe the US car manufacturers are so stupid that they do not deserve to exist.

I recently thought about buying a Chevy but was totally turned off by the lack of incentive. How smart do you have to be in order to be able understand that if you pay a fat price but get zero interest financing, you have gotten nothing whatsoever.

This is another one Mia would have doped out in a nanosecond.

Jim Sinclair’s Commentary

South Korea knows it well, and is prepared to enter the financial fight. The real question is do the South Koreans know how to combat financially. It is by no matter of means simple intervention.

Honest Abe is quoted as saying the following:

"The money power preys on the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes."

–Abraham Lincoln

Jim Sinclair’s Commentary

It will require a miracle for the US to avoid the same.

Britain faces summer of rage – police
Middle-class anger at economic crisis could erupt into violence on streets
Paul Lewis
Monday 23 February 2009

Police are preparing for a "summer of rage" as victims of the economic downturn take to the streets to demonstrate against financial institutions, the Guardian has learned.

Britain’s most senior police officer with responsibility for public order raised the spectre of a return of the riots of the 1980s, with people who have lost their jobs, homes or savings becoming "footsoldiers" in a wave of potentially violent mass protests.

Superintendent David Hartshorn, who heads the Metropolitan police’s public order branch, told the Guardian that middle-class individuals who would never have considered joining demonstrations may now seek to vent their anger through protests this year.

He said that banks, particularly those that still pay large bonuses despite receiving billions in taxpayer money, had become "viable targets". So too had the headquarters of multinational companies and other financial institutions in the City which are being blamed for the financial crisis.

Hartshorn, who receives regular intelligence briefings on potential causes of civil unrest, said the mood at some demonstrations had changed recently, with activists increasingly "intent on coming on to the streets to create public disorder".


Jim Sinclair’s Commentary

All governments are facing building political pressures. It is guaranteed that this microcosm has gotten the attention of the G-everything.

Latvia’s government collapses
By David L. Stern
Published: February 20, 2009

Latvia’s center-right coalition government collapsed Friday, a victim of the country’s growing economic and political turmoil and the second European government, after Iceland, to disintegrate because of the international financial crisis.

The government in Riga, faced with forecasts of a severe drop in the economy this year, was the first in Eastern Europe to succumb to turmoil caused by the crisis. Its collapse rounded out a week that saw worries about feeble investment, banks and output in Central and Eastern Europe coursing through international markets.

Latvia has had a history of revolving-door politics and complex coalitions since pulling free of the Soviet Union in 1991. Prime Minister Ivars Godmanis, who presented his resignation to President Valdis Zatlers on Friday, had been in power only since December 2007. But the precipitous plunge of Latvia’s economy, which helped provoke the worst riot since 1991 last month, played a major part in the government’s downfall.

Godmanis said he would continue to govern until a new coalition was formed.

"I am ready to continue working, but I think that responsibility for the consequences created by this government’s resignation must be taken by those parties that overturned the government," Godmanis said, according to news reports. Two of his coalition partners, the People’s Party and the Greens and Farmers’ Union, had demanded his ouster, he added. His departure comes at a critical juncture for Latvia, a former Soviet state with 2.2 million people. After entering the European Union in 2004, Latvia and its two neighbors, Estonia and Lithuania, posted Europe’s highest growth figures, earning the moniker the "Baltic Tigers." Now Latvia shows the Continent’s biggest losses.


Posted at 10:23 PM (CST) by & filed under Jim's Mailbox.


The U.S. is encouraging China to continue investing in U.S. treasury bonds because "a speedy U.S. recovery will fuel China’s growth as well."!!!

This article also states the following:

"JPMorgan Chase & Co. predicted in a Feb. 6 report that China will keep buying Treasuries not only for the near-term stability of the global financial system, but also because there is no viable and liquid alternative market in which to invest China’s massive and still growing reserves.”

Time will tell.

Best regards,
CIGA Wallace

Clinton Urges China to Keep Buying U.S. Treasury Securities
By Indira A.R. Lakshmanan

Feb. 22 (Bloomberg) — Secretary of State Hillary Clinton urged China to continue buying U.S. Treasury bonds to help finance President Barack Obama’s stimulus plan, saying “we are truly going to rise or fall together.”

“Our economies are so intertwined,” Clinton said in an interview today in Beijing with Shanghai-based Dragon Television. “It would not be in China’s interest” if the U.S. were unable to finance deficit spending to stimulate its stalled economy.

The U.S. is the single largest buyer of the exports that drive growth in China, the world’s third-largest economy. China in turn invests surplus earnings from shipments of goods such as toys, clothing and steel primarily in Treasury securities, making it the world’s largest holder of U.S. government debt at the end of last year with $696.2 billion.

China’s leaders understand that “the United States has to take some very drastic measures with the stimulus package, which means we have to incur debt,” Clinton said. The Chinese are “making a very smart decision by continuing to invest in Treasury bonds,” which she called a “safe investment,” because a speedy U.S. recovery will fuel China’s growth as well.


Dear Wallace,

Just let China see some gold for sale, and the sucking sound you will hear is dollars out of China and gold moving in.

There are alternative ways to dump dollars and you can be assured all are being used by China.

Trader Dan will keep us posted on China’s buys.


Posted at 3:40 PM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Another week – another rotten day in the broad equity markets. Alas – you began so well last evening! What is it that ails thee? Wherefore doth thou persist in sinking lower and lower? Those might be the questions being asked by traders who saw the overnight trade in the equity futures moving sharply higher on the “good” news that the feds would only take over 40% of Citi instead of 51% or more. Sure – that was a great reason to buy. Traders began looking at the rise and saw another opportunity to get short from a better level and down it went.

I have to say that it is evident to me that the market has lost all confidence in the current administration’s point men on the economy and their “plan” to turn things around. You have to begin to fear that we could very well see an even sharper acceleration in the equity selloff based on the way the market is acting. This thing sticks its head up and the axmen come in and quickly lop it off. That kind of price action is terribly bearish. Confidence, that elusive, ethereal substance, once lost, cannot be recaptured until something occurs which gives solid evidence that it is sufficient to avert the crisis and quite frankly, many are looking for it and cannot find it.

Incidentally, the DOW is now back to levels last seen in October 2002. If it moves a bit lower from that level, it will be trading at levels last seen in October 1997! Another way of saying this is that all of the paper gains for the last 11 ½ years in the DOW are now smoke.

I heard what I consider a most intriguing idea put forth by a Republican Congressman out of my state Texas. He suggested that if the government feels compelled to try to do something to stem this crisis, why not simply declare a national tax holiday period of two or three months, perhaps even more, in which all withholding taxes are no longer taken out of American workers’ paychecks. In other words, let them keep the full amount of their wages. Couple that with a reduction in the corporate tax rate that levels the playing field between American business and our overseas competitors. His point made eminent sense to me. If the government is going to go into hawk, why not do so by letting the people keep the money that they have earned. Imagine what folks would think once they actually realized how much the government pilfers from them even week, or other week or month only to then spit it away on more useless pork? The problem with that idea is that it makes it almost impossible for the special interest block voters to be bribed by those who love to be the distributors of others money.

Meanwhile, the Euro, after rising sharply overnight (Yippee –let’s hear it for “risk” trades once again) got a case of heartburn or perhaps more aptly, sickness associated with being in high places, and promptly collapsed lower in the New York trading session as “risk” trades went back out. Seriously folks, it is a gigantic waste of time even attempting to come up with explanations for the price action we are having to witness in so many of these markets. It is called hedge fund madness. Plow back in buying with both fists only to abandon ship diving headlong into the water the next minute. When the dust settles most of the hedge funds will no longer be in existence. Good riddance is my attitude. Maybe some of their managers will find shoveling asphalt or screeding concrete on the new “shovel-ready” projects more fitting to their disposition to shove things around without any particular attention to patterns. Then again if word got out among the construction crew who they were, some of them might end up as road filler so perhaps they might want to avoid calling any attention to themselves.

Gold was taken quite a bit lower last evening as the thirst for risk came back meaning appetite for gold was out. It did manage to recapture most of its losses during the day session as it dawned on many traders that nothing the feds were going to do was going to effect any sort of quick recovery and that the time for risk is not perhaps as near as some might have been thinking.

Technically, the dip buyers are active in the gold pit which is a positive not to mention the price action in the gold shares as indicated by the HUI and XAU which both managed to withstand a great deal of selling pressure coming from the price drop in the broader equity markets.

Short term oriented traders used and are using the $1000 price level to book some profits since that was a target that some were looking for but longer term oriented players are using any weakness to get in or increase positions. This is actually good price action. As I mentioned Friday, this is one of the two possible scenarios I outlined. A panic rush into gold that would see it shoot up $55-$75 or more a day is in no ones interest. Those moves, while extremely sharp and massive, fizzle out in a collapse. We want to see a sustained, measured, steady move higher which consists of periods of consolidation in which the market adjusts to the new price level and has some time to acclimate itself to the new supply/demand equilibrium. A move such as this, has long-lasting staying power. While parabolic blow off runs can be fun for traders who catch the long side, they are extremely tricky because they collapse so quickly that very few can exit in time to keep most of their profits. Also and more importantly, holders of the physical metal are usually not of the nature that they are sitting there watching a parabolic blow off run with their car keys in their hands waiting to rush out of the door of their home to head down to the local coin shop to cash in. Such folks have bought and are holding the metal to protect themselves from what they see heading their way and they do not intend to part with the metal without a great deal of evidence to convince them that things have turned for the better.

Volume in last Friday’s Comex session was strong with an increase in the open interest of about 6600 contracts. The data suggests strong short covering was also met with fresh selling by the commercials once again alongside of the increase in the fund long position.

Goldman was the largest stopper once again in the February Comex Gold contract delivery process – most interesting to say the least.

Friday’s commitment of Traders data showed us the norm – funds buying with commercials selling but I should also note that a large number of the funds were adding fresh short positions, almost 5,000 to be exact through Tuesday of last week. Needless to say, those positions are history now as they are deeply underwater or were covered at a loss, which is the more likely scenario.

Bonds were down sharply overnight on the gain in the equity and the rush toward “risk” trades. They reversed course and are in the plus column now as I write this with the sell off in the equity markets continuing unabated.

Crude is back down after settling a bit above $40 on Friday trading near the $38.50 level. Nat gas recaptured the “4” handle. Platinum traded lower but managed to stay above the $1000 level. Palladium also was lower but is still above $200.

Click chart to enlarge today`s hourly action in Gold in PDF format with commentary from Trader Dan Norcini


Posted at 8:39 PM (CST) by & filed under In The News.

Dear CIGAs,

Have you protected yourself?

90-Year-Old Madoff Victim Back at Work
Thu Feb 19, 10:31PM ET

A 90-year-old Calif. man has been forced to abandon his retirement after losing all his life savings in the alleged Madoff Ponzi scheme. Ian Thiermann lived through the Great Depression and says he’ll get through this financial crisis too.

Click here to watch the video…

Jim Sinclair’s Commentary

The following is for those of you that puh-puh the concept that massive hedge funds only need to recall that allegedly Mr. Soros ran a raid of the Asian currencies that not only killed them but also threw most of Asia at one time into a deep recession.

The idea that major hedge funds do not have enough money to move currency markets, especially the Cando, Swiss and Kiwi, borders on beyond silly.

Paul Volcker: The banking world needs more Canadas
Posted: February 17, 2009, 1:15 PM by Kelly McParland

Paul Volcker, the former U.S. Federal Reserve Board chairman who is now a member of President Barack Obama’s advisory team on the economy, spoke in Toronto recently as part of the Grano Speakers series.

His topic, of course, was the extent of the crisis facing the U.S., and particularly what brought it about. (Solving it is another issue). He is the latest to suggest  Canada is in far better shape, and has been far better served by the structure of its banking system, than the U.S., Europe and other regions.

"It’s interesting that what I’m arguing for looks more like the Canadian system than the American system," Volker said, pointing to strong banks focused on traditional commercial banking practices — taking in money and providing credit — that operate separately from the high-risk financial highwire acts that brought down Wall Street, and for which Volker has little respect.

Here is the speech in full:

I really feel a sense of profound disappointment coming up here. We are having a great financial problem around the world. And finance doesn’t work without some sense of trust and confidence and people meaning what they say. You take their oral word and their written word as a sign that their intentions will be carried out.


Jim Sinclair’s Commentary

It is officially "Out of Control." Are you in control?

Soros sees no bottom for world financial "collapse"
Sat Feb 21, 2009 4:19pm EST

NEW YORK (Reuters) – Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.

Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.

He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system.

"We witnessed the collapse of the financial system," Soros said at a Columbia University dinner. "It was placed on life support, and it’s still on life support. There’s no sign that we are anywhere near a bottom."

His comments echoed those made earlier at the same conference by Paul Volcker, a former Federal Reserve chairman who is now a top adviser to President Barack Obama.

Volcker said industrial production around the world was declining even more rapidly than in the United States, which is itself under severe strain.


Jim Sinclair’s Commentary

And Hedge Funds, how dare they?

EU leaders back sweeping financial regulations
By PATRICK McGROARTY, Associated Press Writer – 1 hr 10 mins ago

BERLIN – European leaders backed sweeping new regulations for financial markets and hedge funds at a summit Sunday in Berlin as politicians and nations scrambled to tame the global economic crisis.

German Chancellor Angela Merkel hosted heads of state and finance ministers from Europe’s largest economies to try to establish a common European position on economic reforms before an April 2 summit of the Group of 20 nations.

"All financial markets, products and participants including hedge funds and other private pools of capital which may pose a systematic risk must be subjected to appropriate oversight or regulation," Merkel said in a statement released on behalf of the summit members, following the talks.

Top officials from Britain, France, Germany, Italy, Luxembourg, Spain, the Netherlands and Czech Republic agreed on seven key points during their one-day meeting in Berlin, the statement said.

"A clear message and concrete action are necessary to engender new confidence in the markets and to put the world back on a path toward more growth and employment," Merkel said.

But the call for blanket global regulation was sure to be resisted by the financial industry and may not be entirely welcomed by other members of the G-20, which in addition to European nations includes the United States, China, Japan and developing nations like India and Brazil.



Jim Sinclair’s Commentary

Back in the 1960s the US courts at the request of the US IRS embargoed the assets of Union Bank of Switzerland, looking for US tax evaders.

A GRAND JURY was called, apparently to intimidate any US person found to have made transfers of monies or negotiable securities to Switzerland. UBS at that time was prepared to sacrifice their US assets to protect their clients. The Grand Jury questioned many accounts of people who had moved to Switzerland, had dependent family living or going to school there, did legitimate overseas business, and people who had committed no crime at all. All uncovered transferees were called to the Grand Jury.

What is interesting here is the question of why do so many nations keep their gold at the New York Federal Reserve Bank?

World War Two is over.

In World War Three the battlefield is everywhere.

Swiss party wants to punish U.S. for UBS probe
Sat Feb 21, 2009 9:53am EST

ZURICH, Feb 21 (Reuters) – The right-wing Swiss People’s Party (SVP) called on Saturday for retaliation against the United States over a U.S. tax probe into the country’s biggest bank UBS that threatens prized banking secrecy.

The populist SVP, the country’s biggest party, said Switzerland should not take in any detainees from the U.S. prison for terrorism suspects at Guantanamo Bay in Cuba, which the Swiss government said last month it could consider to help shut the camp down.

Switzerland should also reconsider its policy of representing the United States in countries where it has no diplomatic presence, the parliamentary SVP said in a statement.

The SVP said gold stored by the Swiss National Bank in the United States should be repatriated and Switzerland should ban the sale of U.S. funds in the country to protect Swiss investors after the failure of U.S. regulators.

The SVP has one minister in the seven-member Swiss government which is made up of the biggest four parties, but its populist policies have shaken up usually consensual Swiss politics.


Jim Sinclair’s Commentary

Recall our advice here on JSMineset.

To those of you that do not have financial privacy, under no circumstances and certainly not via the internet should you seek to accomplish secrecy. You will neither get privacy or your money back, nor will you own any gold anywhere.

You will get a visit from your Inland Revenue Special Agent.

Yes, those that went early are not among the 19,000, the 52,000 nor in the undertow of the pirates of the Caribbean.

Antigua pledges to cooperate on bank investigation
By Clifford Krauss
Sunday, February 22, 2009

ST. JOHN’S, Antigua: Having seized control of Robert Allen Stanford’s two banks in recent days, Antiguan government officials are now pledging to work closely with U.S. regulators to investigate their offshore banking system, long suspected by U.S. officials of being a center for laundering money from around the region.

"We need to investigate our own backyard to see if it needs cleaning up," Attorney General Justin Simon said during an interview.

That acknowledgement came as a break from statements only last week by local bank regulators that the financial system was absolutely clean even as the U.S. Securities and Exchange Commission accused Stanford of engaging in an $8 billion fraud involving high-yielding certificates of deposit sold by an offshore bank here.

A run on both the onshore and offshore banks Stanford operated in Antigua began last week after a U.S. judge froze the assets of Stanford Financial Group, the Houston-based company through which the offshore bank sold the certificates. U.S. investigators are examining the possibility that Stanford was involved in a Ponzi scheme.

Concerned that the Antiguan economy, which is already hurting from a downturn in tourism due to the global economic crisis, could suffer further from a financial breakdown, government officials have taken actions that are unprecedented for the country’s largely unregulated banking system.


Jim Sinclair’s Commentary

The real question is who will tell Kucinich to stand down.

Kucinich: Who Told SEC to "Stand Down" on Stanford Probe?
Chairman of Domestic Policy Subcommittee Opens Inquiry
Washington, Feb 20 –

Chairman of the Domestic Policy Subcommittee, Congressman Dennis Kucinich (D-OH) today sent a letter to Ms. Mary Schapiro, Chair of the Securities and Exchange Commission (SEC) requesting documents that could reveal which government agency told the SEC to "stand down" rather than take enforcement action against the Stanford Group in October 2006 as has been reported by the New York Times.

Recent media reports have indicated that the SEC was aware of improprieties at Stanford Financial Group as early as October 2006, but withheld action at the request of another government agency.

In a report published in the February 17th edition of the New York Times, an SEC official said that an inquiry had been opened on Stanford in October of 2006.  According to the Times report, an associate regional director of enforcement said the SEC "stood down" on its investigation as a result of the intervention of another federal agency.

Stanford is now the focus of an $8 billion fraud investigation and, presumably, an earlier inquiry would have spared many Stanford investors and triggered similar inquiries into other funds which lacked transparency.

"The SEC’s recent filing against Stanford stemmed from the 2006 SEC inquiry that had been apparently shelved at the request of the unnamed agency.  If this is true, we must find out why the SEC delayed enforcement, and if there were other cases where other government agencies intervened to block enforcement,” Chairman Kucinich said.

"If the SEC did indeed begin an inquiry in 2006 and was called off by another agency, our subcommittee will demand that the SEC reveal the name of that agency which told it not to enforce federal laws which protect investors," said Chairman Kucinich.


Jim Sinclair’s Commentary

This is going to open a can of political worms as it deals with the nefarious takeover of Mexico in process and nearing completion.

"While Mexico’s current narco war, which has claimed 7,000 lives in two years, has been billed as one "between cartels", it is, on the ground, something closer to an anarchic scramble between street-level gangs to whom dealing and smuggling have been "outsourced", while the Gulf Cartel and its peers concern themselves with a takeover of the Mexican economy and all-out war against what is left of the Mexican state the cartels do not control."

FBI investigates possible links with Mexico drug gang
Ed Vulliamy and Paul Harris in New York

The FBI is probing possible money laundering linked to Mexico’s infamous narco-trafficking Gulf Cartel in its investigation of Texan billionaire Sir Allen Stanford, US law enforcement sources have told the Observer.

An FBI source close to the investigation would not give exact details but confirmed the agency was looking at links to international drug gangs as part of the huge investigation into Stanford’s banking activities. Reports in the US have said Mexican authorities have detained one of Stanford’s private planes as part of an investigation into possible links to the Gulf Cartel. It has been alleged cheques found inside the plane were linked to the cartel, which is one of the most violent criminal organisations in the world.

Sources in the US Drug Enforcement Administration also confirmed that while the investigations into Stanford’s affairs were "with the FBI and Securities Exchange Commission, there may well have been a trail connecting his Mexican affairs to narco-trafficking interests. So far as we understand from information partially in the public domain, this has pertained to the Gulf Cartel, and items found aboard a private light aircraft. I think we’ll find that any possible drug-related trail and SEC priorities are not all in the same frame."

Asked whether the aircraft seizures were an isolated incident in the overall investigation, the official said: "It’s not going to be as if they would check every plane. Any connections to the narcos would have been followed for some time, and US law enforcement has been working with Mexico’s banking regulators on a vast range of investigations, including Stanford’s interests, for some time.

"This would not be the first investigation like this following trans-border investments to lead to narco-traffic interests."


Jim Sinclair’s Commentary

A Sunday closing?

Oregon-based Silver Falls Bank closed by FDIC
2/22/2009 9:17 AM  ET

(RTTNews) -  Silver Falls Bank, based in Silverton, Oregon State in the US is the latest bank to be closed by the US Regulators, falling prey to the deteriorating financial turmoil in the world’s largest economy, the US. This is the 14th bank to be closed by the US Financial Regulators in this year.

On Friday, the Oregon Department of Consumer and Business Services closed the Bank and named the Federal Deposit Insurance Corporation, or FDIC, as the Receiver. As as is the case with regard to closure of financial institutions, public have not been intimated through advance notice regarding the closure of the Silver Falls Bank.

The FDIC has stated that at the end of February 9, Silver Falls Bank had $131.4 million in assets and $116.3 million in deposits. Heavy dependence on commercial construction loans, which, of late, have been not performing or turned bad, forcing the FDIC to acquire the bank.

Another Bank in the Oregon State, Citizens Bank of Corvallis has agreed to assume deposits from Silver Falls Bank.

FDIC further stated that all the three offices of Silver Falls Bank would open on Monday, 23 October 2009, and conduct normal business activities in the name of Citizens Bank. The automated teller machines will be functioning normally and the customers need not panic, the FDIC added.


Jim Sinclair’s Commentary

What OTC derivatives do not do to the financials, attorneys will.

Whatever is left is going to leak out due to lousy business.

Only when accounting rules are altered to allow the banks to fabricate new false asset values will their fortunes change as the markup of worthless garbage to fake values produces earnings.

Big banks set to report on first quarter amid a rising tide of anxiety

TORONTO — Now that the bosses of Canada’s big banks have had their pay haircuts for 2008, how are they doing so far in 2009?

Investors will find out this week and next, as the Big Five report on the first quarter of their banking year which began in November.

Expectations are muted, given the state of the economy and the results will suffer by comparison with year-ago profits.

But at the same time investors are wondering whether Canada’s banks – solidly capitalized and in rude health compared with their shrivelled competitors in the United States and Europe – will fling aside caution and snap up assets at rock-bottom prices.

"This is probably the one opportunity in history for Canadian banks to stand out from their global peers," Bank of Nova Scotia analyst Kevin Choquette declared in a recent survey.


Posted at 6:35 PM (CST) by & filed under General Editorial.

Dear Jim,

I want to thank you for being a true guide. Last year I bought Gold at $992 and it promptly dropped like a rock. I was astonished at such the huge drop! You comforted and assured me that the price of Gold would go to $1200 and yesterday it crossed the $1000 mark again. After a year I am in the green once again! Thank you for your confident and steadfast guidance.

Secondly, I just listened to the interview that Bloomberg conducted with you and I want to thank you for your well… control of the subject and the marvellous conducting of yourself! I loved your final answer, it was well concluded when you said "ask me questions and I will tell you the truth"! The truth you told.

Jim, now that gold has breached the $1000 mark again do you think they will attack gold once again and drop it to $650? As I recall, one time you mentioned that gold can drop by a range of $100-350.

Are we now on the path to $1200?

Will governments nationalize banks? if so, is there any good to that?

Much thanks to you.

CIGA Marylo

Dear Marylo,

Thank you for your note. In answer to your questions:

1. Gold has now declared itself as targeting $1650. That is FACT.

2. Banks in bankruptcy will be nationalized as the "too big to fail" are rescued and the rest that are "too small to care about," all end up property of number one. The final result will be mega financial companies controlling it all. Not a bad plan for those at the top of the Pyramid of Power.


Posted at 2:37 AM (CST) by & filed under General Editorial.

Dear CIGAs

We are now offering Version #2 of our Gold Compendium for sale in the United States and internationally for an all inclusive cost of $US80.

The Compendium is comprised of two discs. The first is a DVD which includes a comprehensive segment on gold by the master himself, Jim Sinclair. The second is a CD containing approximately three years of searchable, archived material from the JSMineset website that was not previously available for online viewing.

A special one hour workshop DVD is included that reviews all the most important criteria for safe passage through these most difficult times.

The compendium has thousands of articles concerning financial protection, markets and specific detailed price predictions.

The package is a roadmap to safety and how to book on surviving Wall Street bailout, Madoffs and the hard times here now and to come.

The following clip is the lead in to the workshop DVD session.


We are looking at various cost efficient payment options for the Compendium, details of which will be announced by month end. In the meantime, we will accept checks for the Compendium made out to: "Jim Sinclair’s Video Account." Please mail your check for $US80 (US dollars only please) to the following address:

Jim Sinclair’s MineSet,
93 Benton Hill Road,
Sharon, CT 06069

Email Enquiries: