Posted at 1:31 AM (CST) by & filed under Trader Dan Norcini.

Dear CIGAs,

Linked below is a PDF of the foreign custodial accounts at the New York Fed.

It is difficult to envision a graph which shows a line going more vertical than that of the US Treasury holdings chart. I look at this chart and see my children and grandchildren’s future going up in smoke. If you want to know how the chart of US monetary aggregates has turned exponential since August of this year, look no further than the custodial holdings of Treasuries at the Fed. So far (emphasis on “so far”), they have found buyers for this debt from abroad. How long that will last is anyone’s guess. When I think of the enormity of the bailouts coming our way, I find it difficult to believe that there is going to be sufficient demand from abroad for the massive issuance of debt that will be associated with it. If, or should I say, “when”, the supply of new debt overwhelms foreign demand, heaven help the US Dollar.

Notice that while that particular chart has gone vertical, the agency debt chart (Fannie and Freddie are in this category) has seen foreign central banks dump almost $90 billion of this paper since July of this year. Clearly they want nothing to do with it and are unloading agency debt almost as fast as they are loading up on Treasuries.

Trader Dan


Click here for today’s Custodial Accounts charts from Trader Dan Norcini

Posted at 2:51 PM (CST) by & filed under General Editorial.

Dear International Friends of Gold,

If you are tired of being had by paper gold DOING WHAT IT DID TO YOU THIS US MORNING, the following is the only course of action to end the games being played at your expense. Gold you take delivery of can be insured and shipped anywhere on the globe by Brinks and other recognized express services.

Delivery Process for Gold or Silver:

Delivery – Prudential holds the receipt in PFG’s account for customer
1. Client buys the futures contract.
2. Client will take delivery between First Notice Day and the Last 
Trading Day.
3. On delivery day account is debited cost plus a $50.00 delivery fee.
4. Receipt is booked to customers account
5. Monthly storage charge passed on to customer’s account(about $50.00).

Physical Delivery – Customer wants bars in their procession
1. Client buys the futures contract.
2. Client will take delivery between First Notice Day and the Last 
Trading Day.
3. On delivery day account is debited cost plus a $50.00 delivery fee.
4. We will provide the customer with name and phone number of the 
individual at the depository to contact.
5. Customer makes arrangements for the physical delivery

CIGA JB Slear, who is in the commodity business, offers his services to assist anyone seeking physical delivery of metals. He will guide you through the entire process, including arrangements for delivery.

To be totally clear, I expect JB not to discuss any type of speculation with you but ONLY help you acquire 100 ounce gold bars. Once 21,000 bars have been taken the paper gold’s reign over the price of gold is over.

CIGA JB Slear can be reached at the following:

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

Posted at 11:01 AM (CST) by & filed under In The News.

Dear Friends,

Pressure is picking up in the demand for the Fed to outline what they have done with the trillions put into play and to disclose what their inventory of "assets" is. It is very bad for the Fed to refuse. Cooperation might actually cause a major embarrassment to the US dollar, and soon.



Jim Sinclair’s Commentary

If I was anyone involved in these distributions that might have even the smallest possibility of being a crime, I would fess up, get sentenced, and be pardoned by the outgoing Administration. That should be basic logic on the subject of “saving your ass.” “The Democrats are coming, the Democrats are coming – run for your money.” Sorry, I mean life.

Washington’s $5 Trillion Tab
Elizabeth Moyer, 11.12.08, 05:15 PM EST

Fighting the financial crisis has put the U.S. on the hook for some $5 trillion a report says. So far.

For all the fury over Treasury Secretary Henry Paulson’s $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government’s response to the credit crisis.

According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.

The estimate includes many of the various solutions cooked up by Paulson and his counterparts Ben Bernanke at the Federal Reserve and Sheila Bair at the Federal Deposit Insurance Corp., as the credit crisis continues to plague banks and the broader markets.

The Fed has taken on much of that total, including lending a cumulative $1 trillion in overnight or short-term loans since March to primary dealers through its emergency discount window and making a cumulative $1.8 trillion available through its term auction facility, a series of short-term transactions it began making available twice a month in January. It should be noted that a portion of the funds lent in these programs has been repaid and that the totals represent what has been made available.


Posted at 3:27 AM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

Here comes the "Everybody for Themselves" syndrome while China tells Washington to stuff it. Absolutely nothing is coming out of the New Bretton Woods farce but a spin statement while all the boys duke it out.

Europe and U.S. Clash on Financial Reform

When world leaders come together in Washington this weekend to discuss reforming the global financial system, there may be little consensus

The faucets dripped, the windows couldn’t be opened and rain and snow came in through the roof and dripped down the walls. The Mount Washington Hotel in the small New Hampshire town of Bretton Woods was not in great shape when it served as the site of a conference on a new world economic order for 700 international financial experts shortly before the end of World War II. The 1944 meeting went on for three weeks in what one guest dubbed the "madhouse." Still, despite the sub-optimal conditions, by the time it had ended, the conference had agreed on the rules and institutions that would shape the international financial system for decades to come.

Now, more than six decades later, another world financial summit is set to take place this weekend. The world’s 20 most important government leaders will meet on Friday in Washington D.C. to discuss a new fundamental reform of the financial system. In the wake of the crash in the credit markets, the billions in bailout packages put in place around the world and last week’s warnings of a global recession, many governments have high hopes for sharper regulations in the global financial markets.

German Chancellor Angela Merkel called for "more transparency" and a "better set of rules." French President Nicolas Sarkozy proposed a significantly stronger role for the International Monetary Fund (IMF), currently headed by French politician Dominique Strauss-Kahn. A "new Bretton Woods," the French president said, must "lead to a new founding of capitalism."


Jim Sinclair’s Commentary

This is effectively a downgrade of the US dollar. You think that is bullish for the dollar? Hell NO.

Financial Big Shots Now Speaking Of U.S. Government Bankruptcy

The United States may be on course to lose its ‘AAA’ credit rating due to the large amount of debt it has accumulated, according to Martin Hennecke, senior manager of private clients at Tyche.

"The U.S. might really have to look at a default on the bankruptcy reorganization of the present financial system" and the bankruptcy of the government is not out of the realm of possibility, Hennecke said.

"In the United States there is already a funding crisis, and they will have to sell a lot more bonds next year to fund the bailout packages that have already been signed off," Hennecke told CNBC.


Posted at 3:23 AM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Here is another example of wafting anti-US dollar currency smoke.

Click here to view article…

This article lacks two big phrases:

1. "Possible" Future Gold backed currencies (Ruble or Yuan).
2. Trading in baskets of non US dollar currencies for trade settlement.

Now, is there a JSMinset reader who can parse Russian news releases? I know we have a few good Chinese interpreters. I think the Russians like to throw a lot of jabs when squaring off and they like to control the ring.

Ciga Ken



I had a chance to travel cross country this past week and finally got a chance to begin reading Adam Fergusson’s book "When Money Dies: The nightmare of the Weimar collapse." While I have not completely finished it yet, I can say that much of what I have already read seems to be no different than opening up the newspaper on any given day here in November of 2008… including the corrupt cronyism, incompetence and political turmoil.

If anyone is calling you with questions about whether or not owning gold, silver or quality mining stocks is the right thing to do, please have them get a copy of this book. It is out of circulation but they can get a copy from one of Amazon’s used book dealers.


Posted at 3:04 AM (CST) by & filed under Uncategorized.

Dear Friends,

I invite you to read the following news article from The Chinese often make official statements through a non-governmental expert. As the article suggests, when you become the world’s largest debtor nation, you cannot push others around to cure your debt problem. I have taken the liberty of highlighting sections of special interest.

When the exogenous event of dollar repatriation, the dollar short squeeze and the realigning of carry positions is over (very soon), the dollar will drop like a stone.

Jim Sinclair

Before Saving the US
November 11,2008
by CSC staff

The nature of the current global financial crisis is the biggest debt crisis in America’s history. The issuer of the world’s reserve currency, the US has been borrowing for quite a long time without any limit. America’s trade, international payment and fiscal deficits have existed for over 40 years (a fiscal dividend once occurred during Clinton’s administration but deficit soon returned). Statistics show that America’s internal and external debt exceeds $60 trillion, over 400% of the country’s annual GDP of a bit over $14 trillion. Of that total, family debt (including mortgages), financial and non-financial firms’ debt, and municipal and national debt come to about $15 trillion, $17 trillion, $22 trillion, $3.5 trillion, and $11 trillion, respectively, though it is hard to tell how these debts have been split up among foreign governments, financial firms, companies, and individuals.

To relieve the crisis, the US must repay its debts, and to do that it needs to live a more frugal life instead of asking others to continue lending it the money to maintain its over-consumption.

The first thing the government needs to do is reduce spending and the deficit. Correspondingly, the US needs to cut military disbursement, stop its global expansion and the robbing of oil resources from other countries. Companies should also become thrifty and avoid highly leveraged operation. Families and individuals should stop anticipating their income to buy houses and travel globally. Instead, they should warmly welcome foreigners to travel to and spend money in the US.

China Should Raise Conditions

But if the US must ask China to buy some portion of its national debt, what kind of conditions and principles should China we raise?

The principle should be the same as the basic principle upheld by the US and IMF when "saving" other countries in crisis: cut fiscal disbursement and both the government and the people should save money. Besides that, there are six points: first, the US should cancel the limits on high-tech exports to China, and allow China to acquire advanced technology and high-tech companies from the US; secondly, the US needs to open its financial system to Chinese financial institutions, allowing all Chinese financial firms to open branches and develop business in the US; third, the US should not prevent Europe from canceling the ban against selling weapons to China; fourth, the US should stop selling military weapons to Taiwan; fifth, the US should loosen its limits on numbers of Chinese tourists and allow them to travel freely to the US; and sixth, the US should never restrain China’s exports to the US and force RMB appreciation in the name of domestic protectionism and employment pressure.

If the US should refuse to agree to the six principals, that only means it doesn’t really need China to save its market and buy its national debt. Then China’s choice is quite simple: rationally adjust the structure of its foreign exchange reserve assets and avoid the risk of the US national debt according to market rules.

What is worth special attention is that the prerequisite for China’s purchase of US national debt is that China has enough foreign currency to meet the exchange demand when hot money is flowing out in large scale. Otherwise China will have to sell US debt to relieve its lack of foreign exchange currency, which will lead to sharp depreciation of China’s dollar assets. What is even worse, China may immediately suffer a financial crisis led by the lack of foreign currency.

So if the US wants China to help save its market, the US government and the IMF must admit China’s right to manage its foreign exchange independently. Once large scale hot money outflows occurs, China has the right to take effective measures to restrain the speed and amount of hot money outflow, and the US and IMF can’t blame China for it. This is the most important prerequisite, even more important than the six principles mentioned above. If the US can’t agree to it, China may trap itself when saving the US. When exchange crisis happens in China, who can promise the US and the IMF won’t hit China when it’s down?

(The author is a professor at Central China University of Science and Technology. The piece is translated from his article on China Business News)

Link to full article…

Posted at 3:29 PM (CST) by & filed under In The News.

Dear Friends,

I ask that you spend at least half of your time on why you are right in gold rather than spending all of your time scouring the planet to find ways and means of moving yourselves closer to your financial demise.

The phone calls I receive are mostly asking the same questions over and over again. Please stop that negativity. First read JSMineset as many times all of your questions have already been answered.

A person who spends all their time looking for why they are wrong, even if they are right, will find a way not to benefit. That is guaranteed.

Respectfully yours,


Jim Sinclair’s Commentary

Today’s new news (seriously):

TARP = Trouble Asset Relief Program (now closed).
QE = Quantitative Easing. (now opened).
CRAP = Consumer Relief Asset Program.
The lower Yen was the product of QE in the early 2000s.
A lower dollar will be a product of QE and CRAP.
Finally it will be remembered as CRAPpy QE.

Jim Sinclair’s Commentary
Here Paulson tells those with ears that the shift now is a major acceleration of monetary stimulus because Quantitative Easing is infinitely more powerful that buying all that junk from the near and dear globally. Globally is because there is a back door.

The Guardian gives you a totally accurate definition of Quantitative Easing. This time Helicopter Ben takes off to drop trillions globally.

Gold will trade at $1000, $1250, and $1650.

Paulson Shifts Bailout Focus to Borrowers and Non-Banks

Treasury Secretary Henry M. Paulson Jr. said that the $700 billion financial bailout program would not be used to buy troubled mortgage-backed assets, as originally intended.

Instead, capital would be provided directly to nonbank companies as well as banks and financial institutions, and that more would be done to prevent home foreclosures.


Quantitative easing
Tuesday October 14 2008 12.10 BST

Quantitative easing is what non-economists call ‘turning on the printing press’.

In extreme circumstances, governments flood the financial system with money, easing pressure on banks by giving them extra capital.

Ben Bernanke, the chairman of the Fed, won the nickname ‘helicopter Ben’ when he floated just such an idea earlier this decade. US economist Milton Friedman had originally said it would be theoretically possible for governments to drop large amounts of cash out of helicopters for the public to pick up and spend.



Jim Sinclair’s Commentary

You expected anything different?

Lobbyists Swarm the Treasury for Piece of Bailout Pie
November 12, 2008

WASHINGTON — When the government said it would spend $700 billion to rescue the nation’s financial industry, it seemed to be an ocean of money. But after one of the biggest lobbying free-for-alls in memory, it suddenly looks like a dwindling pool.

Many new supplicants are lining up for an infusion of capital as billions of dollars are channeled to other beneficiaries like the American International Group, and possibly soon American Express.

Of the initial $350 billion that Congress freed up, out of the $700 billion in bailout money contained in the law that passed last month, the Treasury Department has committed all but $60 billion. The shrinking pie — and the growing uncertainty over who qualifies — has thrown Washington’s legal and lobbying establishment into a mad scramble.

The Treasury Department is under siege by an army of hired guns for banks, savings and loan associations and insurers — as well as for improbable candidates like a Hispanic business group representing plumbing and home-heating specialists. That last group wants the Treasury to hire its members as contractors to take care of houses that the government may end up owning through buying distressed mortgages.



Jim Sinclair’s Commentary

The dollar will not protect your pension – gold will.

U.S. Companies Ask Congress to Suspend Rule on Pension Payments

By Brian Faler

Nov. 12 (Bloomberg) — Almost 300 companies are asking Congress, as part of any economic stimulus legislation, to suspend a requirement that they pay more into their pension funds, saying it may force them to cut jobs.

Pfizer Inc., Boeing Co., Chrysler LLC, Verizon Communications Inc., Kraft Foods Inc. and Cigna Corp. are among the companies that signed a letter to lawmakers saying the economic slowdown has slashed the value of their pension assets, forcing them to make potentially “huge” contributions to the pension plans to meet requirements imposed by Congress in 2006.

“When companies desperately need cash to keep their businesses afloat, the new funding rules will require huge, countercyclical contributions to their pension plans,” said the letter, to be sent today. “Consequently many companies will divert cash needed for current job retention, job creation and needed business investments.”

Congressional Democrats are urging President George W. Bush to back an economic stimulus package that would provide federal aid to state governments while boosting spending on unemployment assistance, food stamps and infrastructure projects. House Speaker Nancy Pelosi said yesterday she also wants to provide aid to troubled U.S. automakers.