Jim Sinclair

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Rasta
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Re: Jim Sinclair

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Rasta wrote:Metallwoche.de: Mr. Gold himself, Jim Sinclair, presented by Metallwoche.de audio interview
mp3 part 1 [8:55]
mp3 part 2 [12:03]
Eventually there will be an awakening, a balancing of the scales and a bill to be paid, and for that I hold gold - Jim Sinclair
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Re: Jim Sinclair

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Gold’s Role During Periods Of Monetary Stress (A Review)
February 9, 2012, at 2:09 pm
by Jim Sinclair in the category General Editorial | Print This Post | Email This Post

Dear CIGAs,

Here is a review of the why of the gold price when push comes to shove.

Gold always attempts to balance the international balance sheet of the USA as a function of price multiplied by the gold supposedly held.

The subjective mind of the market is the means to the end from the beginning of written history and before gold functioned as a money based standard of value and measure.

Gold’s Role During Periods Of Monetary Stress
March 4, 2009, at 5:18 pm

Question:

Jim

See the following two links as support:

http://research.stlouisfed.org/fred2/data/FDHBFIN.txt

http://en.wikipedia.org/wiki/Official_gold_reserves

In the past, I believe you have said that the price of gold could reach a level whereby in dollar terms this equation will hold:

Oz’s of Gold Held by US x $ Price of Gold = External Debt

From the above links we find:

Federal Debt held by Foreign Investors = $3,125,000,000,000 (as of 12/31/08)

Official US Gold holdings = 8,133.5 tonnes (or 260,272,000 oz’s)

Putting the #’s into the equation:

$3,125,000,000,000 / 260,272,000 = $12,006.67 per ounce of gold

My question is – what is the mechanism or thought process that makes the equation true?

(I guess that I am looking for the why?)

Thank you for your time.
CIGA Rich Gold


Answer:

Dear CIGAs,

Gold’s job is, and will always attempt to during periods of monetary stress, balance the INTERNATIONAL Balance Sheet of the USA.

Putting the Numbers Into The Equation:

$3,125,000,000,000 / 260,272,000 ounces of gold = $12,006.67 per ounce of gold.

In the early 70s I put an advertisement in Barrons predicting gold would rise to $900. When it got near that level, I left for 21 years.

I reappeared officially when Forbes published an article on my career December 10th of 2001.

Click here to view the Forbes article…
http://www.forbes.com/forbes/2001/1210/190.html

The mathematics behind the $900 number came from the following equation plus reasonable trend estimates on the number going into the future.

You will note the number today fits in nicely with Alf’s high levels.

Major ONE up from $256 to $1,015 (actually 4 times the $255 low);
Major TWO down from $1015 to $699, say $700 (a decline of 31%);
Major THREE up from $700 to $3,500 (a Fibonacci 5 times the $500 low);
Major FOUR down from $3,500 to $2,500 (a 29% decline);
Major FIVE up from $2,500 to $10,000 (also a 4 fold increase, same as ONE)
I would not have revealed this unless a recognized expert who has a 100% track record such as Alf Fields predicted it first.

I did not wish to yell "fire in the theatre."

It certainly make the Comex manipulators, who could easily be stopped, look long-term silly today.

Jim
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Rasta
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Re: Jim Sinclair

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JsMineset: The Terminal Beginning Of The Western Financial World

My Dear Extended Family,

The real terminal beginning of the Western Financial world was this week.

Kicking the can down the road is limited by the practical viability of the US dollar and US Treasury Securities market.

QE will go to infinity because there simply is no other tool that can create the amounts of liquidity required instantly by the destruction of the Western world financial system. This destruction was delivered to us via those that have securitized everything.

When you add to this that no default will be declared a default by the International Swaps and Derivative Association you have a guarantee that QE will go to infinity at the cost of the US currency market first and the US bond market second. I put this epic event in the year 2015. I give the US dollar no longer than June of 2012 before the cracks in its armor are visible to all.

The deal that set this in place happened in December when the Fed was confirmed as the lender of last resort to the entire Western financial world when it granted in excess of $500 billion in US dollar swaps to the European Central Bank. The ECB then in turn lent those funds to its member banks to buy European debt in order to paint the auctions of the European debt as viable.

At the same time the Chinese have agreed to be a port in the storm to the euro itself, explaining why it is trading above 1.30 when in truth it should be trading below 1.20 under present circumstances.

The IMF did its part in planning a large rescue package should Greek debt be haircut to 30% of its issued value. The IMF bailout fund will be dollar financed by the Federal Reserve and China. When push comes to shove the IMF bailout funds will benefit to a degree from Chinese dollars as an outsider lender that the IMF, which has already laid the ground, work for.

What will have to be rescued is the banking a system of Euroland and elsewhere holding the debt of Greece. However, what makes you think that other European nations will not demand some degree of equal treatment as the US credit rating agencies continue to downgrade European sovereign debt and the debt of their banking system.

Clearly the International Swaps and Derivatives association will see no default in the Greek credit event because it is voluntary. To declare this as such is the final can kick because it will be met by a demand for equal treatment and that will require infinite QE to hold up the world banking system. This begins a march towards 2015 when gold has a cyclical chance of being full-valued for the time being. A march has begun towards the virtual reserve currency that will have a connection to gold. This march will be toward an equilibrium price of gold and will not repeat the 1980 fall in price.

It is the funds necessary to cover the euro debt haircuts for the banks holding this debt internationally plus the ISAD Credit Event and Determination Committee non-declaration of default that guarantees QE to infinity.

The US dollar may have until June of 2012 before it replaces the euro as the currency of deep concern. Gold can continue for a period of time being played by the hedge funds but its next test is not at $1500 but rather at $2111.

The ISDA is the vehicle that will necessitate QE to infinity by its non-declaration of what is clearly default.

The clock is ticking and Alf’s numbers are in the crosshairs of the gold price. Let us hope that things do not get that bad and gold does its natural task and tries to balance the international balance sheet of the USA. That would speak very poorly for the quality of life the Banksters have planned for our grandchildren.

Gold is going to and maybe beyond Alf’s numbers. Gold shares with real growing extractable ounces will perform as they did in 1979 and 1980.

“Non carborundum est.” Don’t let the bashers get you down. They are so wrong at exactly the wrong time.

Respectfully,
Jim
Eventually there will be an awakening, a balancing of the scales and a bill to be paid, and for that I hold gold - Jim Sinclair
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Boefke
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Re: Jim Sinclair

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Same thinking as LEAP2020. Who see a massive devaluation of the $ by 30%.

Don't know whether this really will occur as this would really harm European exports.....the heat is on!
Last edited by Boefke on 12 Feb 2012, 19:53, edited 1 time in total.
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Re: Jim Sinclair

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Boefke wrote:Same thinking as LEP2020. Who see a massive devaluation of the $ by 30%.

Don't know whether this really will occur as this would really harm European exports.....the heat is on!
Not if all currencies devalue against gold at the same time ....the dollar a bit more, the euro a bit less. ;)
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Re: Jim Sinclair

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Indiana Jones wrote:
Boefke wrote:Same thinking as LEP2020. Who see a massive devaluation of the $ by 30%.

Don't know whether this really will occur as this would really harm European exports.....the heat is on!
Not if all currencies devalue against gold at the same time ....the dollar a bit more, the euro a bit less. ;)
Uhm, actually that devaluation against gold doesn't say anything about the exchange rate between the $ and the €. So I stay to my first post, it will harm the European exports.
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Indiana Jones
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Re: Jim Sinclair

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Boefke wrote:
Indiana Jones wrote:
Boefke wrote:Same thinking as LEP2020. Who see a massive devaluation of the $ by 30%.

Don't know whether this really will occur as this would really harm European exports.....the heat is on!
Not if all currencies devalue against gold at the same time ....the dollar a bit more, the euro a bit less. ;)
Uhm, actually that devaluation against gold doesn't say anything about the exchange rate between the $ and the €. So I stay to my first post, it will harm the European exports.
Yes it does .... ;)


As you might know the famous USDX (US dollar index) components are:
CHF 3.6%
SEK 4.2%
CAD 9.1%
GBP 11.9%
JPY 13.6%
EUR 57.6%

When someone thinks the dollar is going to devalue 30% he says what ?
He actually says that the USD is falling 30% against all USDX index currencies together i.e. NOT 30% against the Euro only, but half of the 30%. If the dollar devalues against gold and the euro devalues against gold (what is already happening because the dollar AND the euro are both declining against gold), the eur/usd pair won't be harmed so much in favor of the euro.

It really is the stupid currency game they are plaing right now that makes you think that the dollar will devalue against any other currency, but it actually won't because the USD is the world trade & reserve currency. It is that shear automatic $IMFS system that could actually make the Greek Drachme (if it still existed) rise into the clouds while its country is dead broke.

No worry, that won't happen to the Euro because you can't play fool with the real markets.
But it will increase the goldprice in both USD and EUR .... :D
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Re: Jim Sinclair

Post by Boefke »

Was Leap2020 talking about the USDX than?

When that's the case you're right. Besides, very well explained Indy!

But my guess was that they we're talking about the exchange rate against the €.

While we're talking about this I think it is more plausible that it indeed was the USDX........as this would enhance a much wider concept as the exchange rate in particular.

Got me ;)
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Re: Jim Sinclair

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JsMinset: The Lonely Road We Take Together

My Dear Extended Family,

The replacement of lost liquidity is NOT arithmetic. Booms, like busts, turn geometric on their liquidity effect because of the impact of mass financial psychology. Management of Perspective Economics primarily operated by mainstream media can make the gestation period of this event long, but it cannot reverse the underlying process.

With there being no question whatsoever that a credit event is on the near horizon for Greece, there is no avoidance of a further haircut in the valuation of Greek debt held by international banks, primarily Euroland institutions. What you take away with one hand you must provide with another if the banking system of Euroland is to remain viable. As you haircut (reduce in value for balance sheet considerations) Greek debt you reduce the value of that debt held as assets of financial institutions, therein reducing their viability to borrow in order to conduct their banking activities. This mark down is in full gear as speculation advertises to the world that the next step in this Greek tragedy is a haircut of value to just 30%.

How is it possible for the Euro wizards of words to punish Greek debt severely but not hammer others equally now under assault both by mainstream media as well as the undertakers of bond ratings in the USA?

The argument takes a position that the International Swaps and Derivative Association, which is made up of the manufacturers of these devices, will not self immolate by declaring credit events to be credit defaults. This is the ultimate irreversible can kick directly into the dead end sign at the end of the road of postponement to perdition.

Financial currency inflated hell by global debt monetization is the condition from which there is no escape, except though burning down the old system and making a new one. This is the dead end sign at the end of the road for can kicking. It is the condition of financial perdition. It is not something coming in a distant future. It is here and now, clear and present, if you have the eyes to see.

The means to this end is the combination of sick sovereign debt, risk insurance issued against the default of debt without sufficient liquid capital to do so, and the fact that those entities who issued this insurance are themselves and in truth illiquid under strain thanks to the capitulation of FASB on true market value of their legacy and other assets. This is the construction of the house of financial cards that will not survive intact during the period of 2012 to 2015. This is what gold at $1700 is indicating to those unfortunate enough to understand the practical workings of a system whose life force has been stolen to a degree that can only be deemed epic.

Never in written history has anything this size occurred where trillions has been bled away from an economic system with impunity. In all history when this has occurred the then monetary system imploded, to be replaced always by a commodity based money. That is what the Retenmark was in the Weimar experience. This is what the virtual reserve currency will be that replaces the US dollar in the next three years. The commodity currency definition will be derived by a connection to the gold held by the central banks of all the currencies that make up the Western world averaged virtual currency. This virtual currency will be a computer based settlement mechanism that cannot be traded in by other than central banks on behalf of trade settlement. Each contributing nation will also contribute to a universal M3 that will be the percentage measure of gold’s value to determined percentage-wise appreciation of depreciation, constituting value of the position held by each central bank in gold. Few if any central banks need to make transactions to adjust value as the squids of the world will invent derivatives upon which to speculate on the value of gold as a product of the growth or contraction of the western world M3.

This is not by any means a gold convertible system. This is not by any means a perfect system. There will be automaticity in this system but an agreement only by members to perform as above. However this system will work the same as the Rentenmark worked. When the need becomes so great to believe in something solid anything that sounds solid has and will again work.

Only a resurgence of business based on solid foundations of equity and not debt can do the final clean up and provide a door to a better future.

No politician anywhere can do the necessary without causing the explosion of the results being heard almost as a new big bang. We are going to inflate this debt away or those in power will be swept away by the violence inherent in the suffering citizen.

Gold and only those things gold will provide the bridge to maintaining a lifestyle, maintain some freedom of choice and most importantly give you options you would not otherwise have. This has been as it always has been and will continue so. The drama of the market is nothing but that – sound and fury presaging but not defining change.

Do not allow anything to deter you from holding that which will build your bridge to tomorrow safely.

I am personally 100% in. It is my intention to hold as much gold as possible lending to me leverage without borrowing or margin. What was done in the 70s cannot be done now because we are only on the cusp of the volatility in the price of gold and it is already impossible to carry leverage except in the manner I have devised for myself participated in by others. I invite you to join with me.

This is a lonely road we are on where its direction does not tend to make friends. The road to freedom of any kind never does.

Stay focused. “Non Carborumdum Est,” do not let the hateful, vengeful bashers get you down.

Respectfully,
Jim

*** Still sounds to me Jim is allowing the currency to valued through Mark-to-Market mechanism ***
Eventually there will be an awakening, a balancing of the scales and a bill to be paid, and for that I hold gold - Jim Sinclair
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Re: Jim Sinclair

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http://www.jsmineset.com/2012/02/14/gol ... -not-away/

Dear Extended Family,

The Gold Aficionado’s greatest fear is totally without basis. The price of gold will not fall significantly from its points of true standard valuation and the introduction of a new currency system.

Gold is heading back towards a monetary system and not away from it. The producing gold company of the future is the new utility as it dividends a majority of its profits to its shareholders.

The fact that gold is money and not a commodity is the safety latch that opens on its own when all other forms of money close. Gresham’s Law is human nature seeking a standard when all other forms of exchange have mutated to casino chips with national flags on them. Increasing world liquidity multiplies itself in increasing volatility of all things traded until an epic moment when over the top volatility convinces even the most economically ignorant that only a standard that cannot be multiplied by an instant Bernanke helicopter unlimited electronic monetary liquidity system is honest money.

It is the flight from the burning values in terms of purchasing power of the casino chips called fiat currency towards a standard that proves Professor Gresham’s Law. It is a study of history that repeatedly shows his thesis that good money, honest money, forces out bad money.

Between now and 2015 gold will meet and, like all markets, exceed its value as a standard of measure. However there will be no repeat of the 1980 to 2001 price adjustment. Of course gold will meet and exceed a number, but its return to that full valuation will be a modest percentage of the total value. Gold is headed to a pendulum point at the introduction of the new virtual Western World Reserve unit for trade settlement.

I see the new system utilizing a Western World M3, which all member governments will agree to as 100 on the Index of Standard Currency Equilibrium. As this measure rises and falls, governments will agree that the value of their Treasury gold will move in the same direction and percentage according to their GDP ranking.

What will of course happen is the Squids of the Western world, the investment banks, will invent derivatives to speculate on member’s gold value requirements, which will change the price of gold in the marketplace and therefore remove the necessity of doing anything from the central banks. Once again the airwaves of the financial world will hang on the weekly announcement of the M figures, but this time it will be for a Global Western M3 tallied by the historical lender of last resort, The US Federal Reserve Bank.

There will be many variations and tweaks to this concept, but once again a new Rentenmark will be invented as a virtual reserve currency unit tied to a standard (gold) with a shadow of control on Western global money supply. A function of control will be by exposure (M3), but not convertibility.
Like the Rentenmark it will be a bit of a farce, but it will work due to the demand for a fix that sits in the shadow of gold but is not convertible.

This new Rentenmark will not be tradable by general business but rather be the virtual Standard Reserve Currency Unit (SRCU) available only to the central banks of the Global Western Monetary Association. All the present fiat currencies, the casino chips with national flags on them called things like the dollar and euro, will still be around and serving a purpose valued against the virtual Standard Reserve Currency.

The survivor will be gold. Its volatility will subside as it trades around a pendulum point that will be the price of gold on the day of agreement to the setting of the Index of Standard Currency Equilibrium (ISCE).

Assuming Alf Fields has called the number at $4500, then gold would trade in a range around $4500, say by $500, as the derivatives created to speculate on the Global Western world M3 changes via gold’s value.

What would not remain is the purchasing power of each casino chip with a flag on it, fiat currency. That would have fallen victim to currency induced cost push inflation, which now permeates the Western world’s financial system yet to be properly defined.

In conclusion, gold will not fall significantly in value after finding its full valuation as a standard. It will mutate into a currency form the same way German real estate gave the Rentenmark its value when Germany did not own all that much real estate.

The producing gold companies will now return to what they were in the 1940s and 1950s, the utility sector of the equity market as the best and certain yielders.

This is why I do what I do every day. Rather than in the 70s when I carried 22,000 long Comex gold contracts, I am building an entity to carry as many ounces of mineable gold as I possibly can assemble to become a utility equity of the future via outright ownership and royalty. That is done through TRX on the NYSE and TNX on the senior Toronto Stock Exchange.

Regards,
Jim
Everything that needs to be said has already been said.
But since no one was listening, everything must be said again.
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