The following is a missive that we received from Jim Sinclair this morning, who is the host of a web site called Jim Sinclair's MineSet. He sums up the situation much better than we can so its well worth the time spent on reading what he has to say. The above link will take to his site and his updates via email are free, so you have nothing to lose by signing up for them.
Here we go:
My Dear Extended Family,
In his last report, John Williams expects hyperinflation by the end of 2014. He has advised (in an interview separate from his most recent report) that when this happens, the purchasing power of the US Dollar will collapse and in about six months a new currency will be issued. All of this leads to a lower US dollar in an intact trend channel that goes to and below .5600 on the meaningless USDX index.
You've talked about a new, two-tiered currency regime (if I understand correctly) that will consist of a basket-type currency traded among central banks and national or multinational-basket currencies used by the rest of us.
My question is, after the new currency regime is created, what will happen to transfer-payment programs like SS, unemployment comp and the like? Will these payments resume in whatever currency the US uses next? How about public-sector employees? They, effectively, receive transfer payments too. Will they still be paid? I know the private sector will be FUBARed because it's subject to market forces.
Don't laugh at this next question: can this be handled seamlessly or should we assume Petunia is taking flying lessons?
Think of it as a virtual reserve currency only available to central banks to trade in. Think of it as the same currency system we have now with very different currency cross rate values. Think of it as the euro, ruble, rupee and yuan as a currency trading block, not a unified currency.
This is how you reduce international dollar debt and insular dollar entitlement payments to almost meaningless levels, all in one great arm wave on a singular day. It will also cure the health cost problem by removing the most sickly from the equation, the pensioner, by accelerated attrition. Timing is a question of when our masters via GS decide to pull the plug on confidence in the US dollar as there is no other practical solution in the minds of our masters.
The Euro at $1.5O and maybe much higher, which by the way makes my Swiss Franc and Canadian dollar inventory look quite good. I wager you never expected the Swiss Franc being bound to the euro at a cross rate of 1.20 was going to be outrageously bullish for the Swissy? We did here.
Regarding Petunia, could it be otherwise? She is a Sinclair, and presently there are 4 pilots in the family. No one lives in Alaska now. The only real question is rotorcraft or fixed wing? Dogs (which she is not too fond of) can drive. Why should Miss Petunia remain Earthbound?
Jim Sinclair's Commentary
What is being made obvious by the servants of our masters in MSM is being done so for a reason. Judging from 1979, I think we are there.
Reply: Everything Is Manipulated-Gold-Oil-Libor-Electricity
With his commentary this week Chris Martenson of Real Prosperity became the latest financial writer to earn his tinfoil hat.
"Once upon a time," Martenson writes, perhaps with a weary glance at GATA, "it would have been considered in bad taste to suggest that the world was being centrally managed in secret by a smallish cabal of bankers whose actions served to either prop up the excessive spending habits of the very governments that conferred upon them the power to print money or to bolster the health and profits of the banks they mainly serve. That was then. Today you can just read about it in the Wall Street Journal."
Martenson then cites a report from Wednesday's Wall Street Journal about central bankers having lovely dinners at private meetings at the Bank for International Settlements in Basel, Switzerland, during which they secretly experiment with and decide the fate of the world --
Turning to gold, Martenson writes:
"I don't really think that gold's current market price or recent behavior have anything useful to do with gold's value here. ... Some entity has been selling literally thousands and thousands of gold contracts into the thinly traded overnight markets so rapidly that we have to use millisecond charting to see it for what it is. Again, there is no other legitimate explanation for this activity of which I am aware besides having an intent of pushing the price down.
"Whether there is some motivation for this activity besides 'making money,' I remain convinced that the gold market, like many others, is no longer sending useful price signals. Instead it is telling us that some entity has found it useful to sell thousands of gold contracts all at once.
"The interesting part of this story is that this has been the most sustained, intensive, and yet ineffective gold selling that I have yet seen. In the past, such bear raids, as they are called, would have resulted in a sharply lower gold price. Right now that has not yet really happened.
"I am wondering if a big up move is not right around the corner for gold. I can tell you that if even one fourth of the recent quantitative easing effort was announced five years ago, markets would have exploded and gold would have absolutely launched."
The point is that QE is here and alive and well and gold has not responded which we find worrisome to say the least.
Regarding www.skoptionstrading.com. A number of trades have been closed so we will update the stats shortly.
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