Posted at 1:32 PM (CST) by & filed under Jim's Mailbox.

Dear Jim,

Once again you’ve given us vital information months before there are whispers of it in the mainstream press. I give the AP a lot of credit for this unblinking look at the Taliban’s rise in Pakistan, several passages of which frankly gave me chills.

A good candidate for understatement of the year: "the regional government made a mistake in May when it struck a peace deal with the militants."

God help them (and us).

Best regards,
CIGA Richard B.

Scenic Pakistani valley falls to Taliban militants
By NAHAL TOOSI, Associated Press Writer
(Key paragraphs excerpted from article)

ISLAMABAD, Pakistan – Taliban militants are beheading and burning their way through Pakistan’s picturesque Swat Valley, and residents say the insurgents now control most of the mountainous region far from the lawless tribal areas where jihadists thrive…

The 3,500-square-mile Swat Valley lies less than 100 miles from the capital, Islamabad…

Most of the insurgents are easy to spot with long hair, beards, rifles, camouflage vests and running shoes. They number at most 2,000, according to people who were interviewed.

In some places, just a handful of insurgents can control a village. They rule by fear: beheading government sympathizers, blowing up bridges and demanding women wear all-encompassing burqas…

Several people interviewed said the regional government made a mistake in May when it struck a peace deal with the militants. The agreement fell apart within two months but let the insurgents regroup…

On Friday, Pakistani intelligence officials said thousands of troops were being shifted toward the border with India, which blames Pakistani militants for terrorist attacks in Mumbai last month that killed 164 people. But there has been no sign yet of a major buildup near India.

"The terrorists’ aim in Mumbai was precisely this — to get the Pakistani army to withdraw from the western border and mount operations on the east," said Ahmed Rashid, a journalist and author who has written extensively about militancy in the region.

"The terrorists are not going to be sitting still. They are not going to be adhering to any sort of cease-fire while the army takes on the Indian threat. They are going to occupy the vacuum the army will create."


Posted at 1:27 PM (CST) by & filed under In The News.

Jim Sinclair’s Commentary

The sheer size of this continuing free lunch bailout program guarantees two things:

– Gold meeting and exceeding my price objective of $1650 by multiples

– A drop in the value of long bonds that takes the appearance of a very, very long fishing line as the US is shocked by an unwillingness of Asia to finance the incomprehensible size of the bailout free lunch for those wholly responsible for the disaster in the first place.

There simply is no moral engine that can power any alternative ending.

There are no more than 745 days left in this drama.

U.S. throws GMAC $6 billion lifeline
Treasury injects $5B into finance firm key to General Motors’ survival, while automaker gets $1B loan to make its own investment in GMAC.
By Tami Luhby, staff writer
Last Updated: December 29, 2008: 11:03 PM ET

NEW YORK ( — In yet another move to prop up the crumbling U.S. auto industry, the government announced Monday that it will pump $6 billion into GMAC Financial Services, a financing company critical to the survival of General Motors.

The rescue package has two parts. The Treasury Department is injecting $5 billion directly into GMAC in exchange for preferred equity shares that pay an 8% dividend. GMAC also is issuing warrants to Treasury in the form of preferred stock. If exercised, the warrants will pay a 9% dividend.

Also, the government will lend $1 billion to GM that the automaker will invest in its financing arm. GMAC needs the funding to convert to a bank holding company, a necessary step to receiving the bailout money.

The Federal Reserve said last week that it would approve GMAC’s conversion to a bank holding company, subject to certain conditions.


Posted at 8:10 PM (CST) by & filed under General Editorial.


You are the man. You will always be the man.

You need no confirmation of that from anybody, ever. You are the King, and I bow publicly to honor you.

You gave me a helping hand as a kid, and that will never be forgotten. You always honored Barbara, and for that I am your servant. 


Newsletter of the year? Harry Schultz. Really.
Commentary: His prescient call of the ‘financial tsunami’ is the reason why
By Peter Brimelow, MarketWatch
Last update: 11:14 p.m. EST Dec. 28, 2008

NEW YORK (MarketWatch) — My choice for investment letter of the year: The International Harry Shultz Letter.

I usually say that my selection method is highly scientific (I choose whoever I feel like). And I have to say it particularly loudly this year.

Schultz was Letter of the Year in 2005. See Dec. 29, 2005 column, which explains his nuanced gold-bug philosophy in more detail

But over the past 12 months through November, Schultz is down a heart-stopping 76.05% by Hulbert Financial Digest count, vs. negative 36.68% for the dividend-reinvested Dow Jones Wilshire 5000.

This loss has wiped out Shultz’s strong post-2000 run, when he benefited from the gold and commodities boom. Now, over the past 10 years, the HFD shows the letter achieving an annualized loss of negative 8.73%, even worse than the negative 1.16% annualized loss for the total return DJ-Wilshire 5000.

And it’s an unpleasant arithmetical fact that even future triple-digit gains (which aren’t impossible) will not dig Schultz out of this hole.

(But, if you’re a new investor starting at the bottom, who cares?)

The reason I pick Schultz: the extraordinary prescience he showed in predicting what he called a "financial tsunami" well over a year ago. See Oct. 19 column

Well? He was right, wasn’t he?


Posted at 7:54 PM (CST) by & filed under General Editorial.

Dear Jim,

I plan on owning and operating a for profit chain of re-education camps. State funded and too big to fail, of course. And at graduation rather than robes, everyone wears a tarp.

CIGA Rusty Bayonet

Rusty Bayonet’s Misean Institute Local 401:

Core curriculum : Term One
1. Household Balance Sheets : An Introduction to Penury
2. How Wall St. Ate Your Retirement
3. How to Spot Financial Advisory Fraud : The Mouth Moves
4. Mid-term Debate : Keynes, Friedman And how to Hose the Future
5. Rethinking Children/Grandchildren : Basic Costings
6. Survival Mandarin, Part 1
7. Zen and the Art of Hummer Maintenance
8. Fieldtrip to the Fed : BYO Small Arms
9. Why Dark Pool Trading is Not Your Friend
10. Countdown to a COMEX Bust : Probabilistic Modeling and You
11. U6 and the New Leisure Society
12. End of Term Asssignment : Where did the TARP Funds Go?

Term 2 : Applied Course TBA
Semester II : Applied Curriculum – Building on the Lessons of Semester I
1. Do You Look Good In Orange? A Wall Streeter’s Guide to Gitmo
2. Living With Gruel : An Update
3. Introduction to the New Nutrition : Squirrels, Insects And Their Many Uses
4. Super UNsize Me : Homilies on CDSs
5. Tort Refresher : The Value of the Paper It’s Written On
6. Mid-term Roundtable : Squashing the Long Bond Yield, a Discussion with Guest Experts Eldo, Macray, and Quixande.
7. Applied Baltic Dry Studies : Term Paper The Long Trail from the ASX to US Manufacturing
8. Poverty in Context : Comparing North Carolina and Sierra Leone After the Rebellions
9. And Not a Drop to Pump : Oil Supply Distortions and the Case of Georgia
10. We are All Iceland Now : Historical Perspectives on Iceland.
11. The Fundamentals of the Bailout Are Strong : TARPs, TALFs and Why Five-letter Acronyms are an Excellent Short Position
12. Final Paper : It Could Never Happen Here. Discuss.

Term 3 : Working Professionals’ Core Course, TBA.
Semester III: Applying All We Have Learned
1. Do You Look Good In Orange II?  Care and Maintenance in Challenging Environments
2. Guest VC Commentator : Neutron Bernie from the US Virgin Islands on Booking and Busting $50b, "You have to start from zero to get back to zero".
3. Headline Writers Are Morons : Bloomberg Edition. Discuss.
4. The IMF Is Back In Business : Streamlined Conditionality and the New Endocolonialism, with John Perkins
5. The Anglos do the Slavs, Again : The Eastern European Bust of 2008
6. Mid-term Debate : The Austrian School and the Psychopathology Of Market Fundamentalism, Deflation Case Studies
7. To Build a Better Oligarchy, an American View
8. State Failure: When the State Is Your State, A Presentation from the Center for Budget and Policy Priorities, with Q&A and vodka cash-bar
9. Introductory Air Movements and Convoy Behavior : Looking Out For Ourselves And Applied Tinfoil Techniques
10. Ni shuo shenme? Wo ting bu dong!?? Further Guidance on Cross-cultural Negotiation Tactics.
11. Spontaneously Arising Leadership : So the Syndicalists Had a Point?
12. Term paper : How It Will Never Happen Again. Open Discussion.

The Curriculum Board makes no undertakings that course Participants will either learn or activate the learning imparted. Past returns are no guarantee of future results.

Posted at 7:45 PM (CST) by & filed under General Editorial.

Dear Friends,

Everyone is getting fancy seeing gold’s strength as a product of the Israeli/Hamas situation.

Watch the euro/dollar relationship as it is the underlying cause of the new gold price up-trend.

We are also moving deep into a more serious geopolitical problem in Pakistan than even the present focus in the Middle East.

Gold is a process. The dollar is the real why. Soon a geopolitical situation will not simply go away.

Gold is insurance. Gold is not a trade. Trade Google if you want. Trading gold is for the professionals. Even for the professionals, trading is no way to reliable fiscal insurance at this time.

How will the thieves protect the trillions they have stolen that are now depreciating as the phony dollar rally caves in? Not in long Treasuries, that is for sure.

The bail out of long treasuries by the thieves, sure to come, will be a sight to see.

Remember that Hyper-dollar-inflation is a currency event, not an economic event.

Keep focused on Jan 2011 to June 2012 and do not get diverted by the noise.

Think Alf Fields’ gold prices, Not Goldfields’ gold prices.

Once again the producers called the bottom. The Anglo and Impala retrenchment releases are infallible indicators as they are ALWAYS wrong when they do that, ALWAYS!

The producers have historically proven their abilities as market mavens by expanding wildly at tops, and closing down production while selling off gems at the price bottom. Thanks guys!

I bought Anglo’s exploration properties in TZ, didn’t I?

Respectfully yours,

Posted at 7:06 PM (CST) by & filed under JSMineset Editor.

Dear CIGAs,

At long last we will soon be offering Version 2 of our Compendium. Version 2 will include all JSMineset articles from December 2005 onward. There will also be a number of extras included which we anticipate to include a DVD by Jim Sinclair. The cost is expected to be $80USD, which includes shipping, payable by credit card or cheque.

Version 1 of the Compendium, which covers articles from JSMineset’s inception to December 2005 and a separate technical analysis video disc by Jim Sinclair, will also be available once again in VERY limited numbers. If you have not already picked up a copy of this and want to you need to grab it as soon as it is available because this will likely be our last production run ever. The cost for this is expected to be $50USD, again with shipping included.

For those of you relatively new to the site, the compendiums are sold every few years to cover the operating costs of keeping a site like JSMineset up and running without having to make it a subscription based pay site. This is to cover costs only – any profit from these sales goes back directly to improving the site. If what we do here provides value to you purchase a compendium and help keep this site running. After all, you are getting a compilation of over 6000 articles that would total well over 15,000 pages if it was published in a book. Go to and try to find a better deal than that!

If you are interested in ordering the Compendium send an email to We will add you to our updates list that will give you the option to purchase the set before everyone else. Who knows, maybe there will be another bonus if you sign up!

Dan Duval
JSMineset Editor

Posted at 7:04 PM (CST) by & filed under In The News.

Dear CIGAs,

There is something so comforting about being missed.



Jim Sinclair’s Commentary

Igor is WRONG!

It is NOT the US, it is the US dollar.

It is NOT in 2010, but rather between the first week of January 2011 and the third week of June 2012.

However, if he was by some unforeseen circumstance correct, geographically it would be rather good for the Cando and Euro between January 14th, 2011 and the third week of June 2012.

It is amazing what hyper-dollar- inflation can do for a resource based currency without a chronic deficit problem.

"As goes Motors, so goes the USA"

" The annual convention of Economic Experts was called off due to unforeseen circumstances."

As if Things Weren’t Bad Enough, Russian Professor Predicts End of U.S.
In Moscow, Igor Panarin’s Forecasts Are All the Rage; America ‘Disintegrates’ in 2010

MOSCOW — For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument — that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. — very seriously. Now he’s found an eager audience: Russian state media.

In recent weeks, he’s been interviewed as much as twice a day about his predictions. "It’s a record," says Prof. Panarin. "But I think the attention is going to grow even stronger."

Prof. Panarin, 50 years old, is not a fringe figure. A former KGB analyst, he is dean of the Russian Foreign Ministry’s academy for future diplomats. He is invited to Kremlin receptions, lectures students, publishes books, and appears in the media as an expert on U.S.-Russia relations.

But it’s his bleak forecast for the U.S. that is music to the ears of the Kremlin, which in recent years has blamed Washington for everything from instability in the Middle East to the global financial crisis. Mr. Panarin’s views also fit neatly with the Kremlin’s narrative that Russia is returning to its rightful place on the world stage after the weakness of the 1990s, when many feared that the country would go economically and politically bankrupt and break into separate territories.

A polite and cheerful man with a buzz cut, Mr. Panarin insists he does not dislike Americans. But he warns that the outlook for them is dire.

"There’s a 55-45% chance right now that disintegration will occur," he says. "One could rejoice in that process," he adds, poker-faced. "But if we’re talking reasonably, it’s not the best scenario — for Russia." Though Russia would become more powerful on the global stage, he says, its economy would suffer because it currently depends heavily on the dollar and on trade with the U.S.



Jim Sinclair’s Commentary

Thank you all you now bailed out OTC derivative manufacturers. You should consider Blackwater Security Services as you will most certainly need them, and they need the business.

Maybe Mr. Madoff should have hired Blackwater rather than asking for free services from the FBI.

Enjoy hiding the rest of your lives with your cancerous ill gotten gains at the cost of so many others’ well being. May you all rot in hell for eternity!

You are ignorant of the inescapable dire sufferings you have caused yourselves.

Holiday Sales Drop to Force Bankruptcies, Closings
By Heather Burke

Dec. 29 (Bloomberg) — U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.

Retailers may close 73,000 stores in the first half of 2009, according to the International Council of Shopping Centers. Talbots Inc. and Sears Holdings Corp. are among chains shuttering underperforming locations.

More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc., Sharper Image Corp. and Steve & Barry’s LLC, have sought bankruptcy protection this year as the credit squeeze and recession drained sales. Investors will start seeing a wide variety of chains seeking bankruptcy protection in February when they file financial reports, said Burt Flickinger.

“You’ll see department stores, specialty stores, discount stores, grocery stores, drugstores, major chains either multi- regionally or nationally go out,” Flickinger, managing director of Strategic Resource Group, a retail-industry consulting firm in New York, said today in a Bloomberg Radio interview. “There are a number that are real causes for concern.”