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Thread: Gold: Jim Sinclair - 2nd Phase of Gold rise coming by mid-2013

   
   
       
  1. #1
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    Gold: Jim Sinclair - 2nd Phase of Gold rise coming by mid-2013

    The Entrance To The Second Phase Of The Gold Market Ascendancy


    January 22, 2013, at 4:33 pm
    by Jim Sinclair in the category General Editorial | Print This Post | Email This Post


    My Dear Extended Family,

    Hyperinflation in the US dollar is considered impossible by some.

    Some of this opinion is motivated by the concepts and implications of the reserve currency facing such a challenge. Others deny that historical experiences of hyperinflation has causes, which dismisses the present problems of the US dollar as possible contribution to a hyper-inflationary experience.

    The first opinion seems a product of misplaced patriotism rather than hard analysis. This because hyperinflation in a reserve currency, even if reserve by default, has implications to the fiat monetary system that most analysts consider too extreme to even consider. That is the US smack of flag waving over logic.

    The second opinion would eliminate the Weimar experience because many see that as a direct product of war reparations Germany had agreed to. The common belief is that it was the war reparations that caused the hyperinflation, which is totally wrong, as presented. It was not the reparations, but the desire and decision to attempt to water the currency down to reduce the reparation costs that lead to the hyperinflation which followed.

    The Weimar experience could have been different if the financial decision makers had been willing to suffer the pain of repayment over time and the attendant weight it would have placed on the economy. The decision to avoid the immediate pain of the cost of reparation via debasement of the currency is why the Weimar experience went into runaway hyperinflation.

    In my opinion the decision in the Weimar experience was to debase the currency in order to offset reparations which then caused hyperinflation, not the reparations themselves. I believe it is exactly the same in modern times as the US financial decision makers adopted QE when Lehman Brothers failed in order to not face the consequences of that failure which was then the fraudulent mountain of OTC derivatives.

    It is reasonable to assume that by midyear of 2013 the US Federal Reserve will have to make a decision in order to keep the US bond market which is US interest rates at the low levels that have been promised until employment has made a sustained recovery. I believe that the recent actions on the Fiscal Cliff and the Debt Ceiling would indicate the US Fed will increase the non-economic purchases (another definition of QE) of whatever amount of treasuries are offered for sale from any entity, sovereign or private.

    This will be the entrance to the second phase of the gold market ascendancy. Gold got to $1900 on threatened systemic failure. Gold will go to $3500 and above on pure monetary fiat currency concerns. The actions of the Federal Reserve in order to maintain the extreme health of the US bond market are no different in their implications that Weimar financial moves were to avoid the economic pain of reparations or for that matter Zimbabwe’s constant Federal borrowing.

    The Fed’s defense of the US bond market is demanded by the huge pile of original and old OTC derivatives that still haunt the monetary system as specific performance contracts with any financing floating in cyber space. This could drop the US dollar below .7200 to .5600 on the USDX in a short period of time. Because the dollar is a reserve currency by default (which means they have it already and are presently in position by historical acts) the potential snowball effect could ignite an inflation that will later be known as currency induced cost push inflation, which is a derivative of hyperinflation.

    I anticipate that this is exactly what will happen propelling gold to new record heights starting no later than midyear this year and running into 2017. I am sure that this operation to keep a lid on gold is based on those that know what herein is outlined. The second phase of the long term bull market in gold should move faster and higher than any previous experience.
    Sincerely,
    Jim
    py

  2. #2
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    January 26, 2013, at 9:58 pm

    y Dear Extended Family,Think of the value of the gold reserves of the euro with their gold marked to market by the ECB. Think of the percentage then that their gold reserves would be as a percentage of fiat currency held in reserve. Think then of the primary market in gold by default moving into the cash market as the criminal paper gold market is disgraced via delivery failures. In my early life both my wife and I were Comex members. Who else commenting about gold has that real time experience of how you play markets? Who commenting out there would have the slightest idea of how one goes about making a cash market in gold as was made with Sinclair Global Arbitrage.The dollar and the euro have been at war since the day the euro rose above par to the dollar. Now look at the euro chart in terms of dollars. View the transition of the euro to a bull market and the transition of the modest recovery in the dollar re-entering into a decade long major bear market. This is the foundation set in steel that will launch the next major bull phase in the gold price very soon.When you look back at this multi-month gold market operation you will know what it was all about. Gold mining is a terrific business, truth be known, now being condemned by all the merchants of bullion in the gold community. Who needs enemies when you have such friends right within the community? Bullion is clearly a risk only to price but condemning gold shares is total nonsense utilized by PM scoundrels to market other gold products.Euro/US Dollar (FOREX:EURUSD)
    1.3460 0.0000 (0.00%)
    2013-01-26 18:37:57, 0 min delay
    Now look at the Trade weighted US Dollar Index:2013-01-16: 98.670 Index January 1997=100 Last 5 Observations
    Weekly, Ending Wednesday, Not Seasonally Adjusted, Updated: 2013-01-22 3:32 PM CST
    The next phase of the Gold Market will be driven monetarily. This phase will take gold to the point whereby marking the gold reserves of the deficit nations to the market move towards balance and balance will be struck.Every problem we have from national to private is a balance sheet problem. As QE is the only tool to feign solvency, Gold is the only tool to accomplish solvency. Convertibility of fiat paper to gold will not re-occur, but currencies will cease their death rattle as national balance sheets are in fact balanced.Sincerely,
    Jim
    py

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