Gold guru Jim Sinclair sees November crisis for US dollar
Posted on 14 July 2009 with no comments from readers
This is a rare interview on South African television yesterday featuring the gold uber-guru Jim Sinclair who is offering a $1 million bet that gold will reach $1,650 by January 14th 2011.
Here he explains the reason for his confidence in making this wager. He also predicts that November 4-27th this year will bring a severe challenge for the US dollar. Gold is a perfect currency and the safest of safe havens with no liability or nationality, he suggests.
Mr Sinclair could well be proven right again in his November dollar crisis prediction. This TV interview does not go into his reasoning so we can only speculate on his logic. However, let us say that the US stock market is being set up for another October crash with too much optimism about the non-recovery.
When that crash happens the dollar will have a final rally as stocks are cashed out and bond prices will rise. But what happens then? Surely the next call for traders will be to exit bonds and the US dollar which will have peaked, and be very vulnerable to inflation and devaluation from emergency stimulus packages.
And where will investors then put their money? Precious metals will be the only store of value left as a safe haven. That could well drive gold to $1,650 by 2011 and substantially higher by the current year-end.
no Comments posted by readers:
I do take the point but think that owning GOLD will be a CRIME by that time in MANY COUNTRIES! IT has happened BEFORE & will be REPEATED AGAIN UNFORTUNATELY, I can’t see MANY SAFE HEAVEN for GOLD ie where to keep ONECE bought.
We are nearing a breakdown in the US dollar with a target towards and under .7200. That means we are nearing the visible result of a currency event in terms of prices in general commodities.
The CIT failure means without any doubt upwards pressure on short term interest rates. The Fed will cave into Administration pressure, increasing Quantitative Easing to a level best described as infinite.
Gold will take out $1000 on this try with a very temporary retreat before it moves fully through. Gold will move to and through $1224 with a temporary battle. Gold will move toward $1650 but meet serious temporary opposition in the $1400 area.
All of this will occur starting quite soon. Hold on tight to all that is precious metals.
Stay the course.
Respectfully yours,
Jim in Dubai
Here is something to think about: You speak of how to store the gold you buy…Of more concern is how in the world do you sell this gold/silver bar that you have hidden when the time comes to cash in on all the profit you see on paper? There’s no ’store’ on the corner that will cash you out. You bring it down to Kroger and they will give you a blank stare. Here you have this valuable 1 oz bar of silver or gold, easily worth a big paycheck, but how do you cash it so you can buy food to put on the table?
I’ve asked this question to numerous gold-mouths, but I have yet to receive an answer. It appears to be: Buy it from me, but don’t ask how to cash it in when the crisis time comes, if it does come? Just buy and hold. I read where you can trade it to so many people who have what you want.. Where are you going to find these traders in your home town in a crisis? Stand on a street corner and hold up the gold/silver bar and ask “Any buyers out there”. If things get really bad, would you survive standing there for 5 minutes before you are robbed? How do you trade in your gold/silver bar and make that profit that is so evident on the charts? Please someone, tell me exactly how do I dispose of that gold/silver bar valued at $2000-10,000 when the $ is worth 52 cents? I live in an ordinary town in an ordinary state. If gas is $15 a gallon by that time, I won’t even be able to afford to drive to the grocery store much less drive to another state where someone is willing to buy that bar on the hush/hush. You can be sure his profit will be ‘out of sight’ when you do cash in…like 50%? Anyone care to clarify this for me?
Ed Note: in Dubai we have the world’s largest gold souk and any quantity of gold can be sold at anytime.
Peter, your Editor’s note on Frances’s post was disingenuous, and not a reply to her question. She is in the States; her dollars have inflated down to 50 cents or whatever; she needs cash; are you seriously suggesting she gets on a plane with her gold bar and flies to Dubai in order to cash it in?
Ed Note: The point is that gold keeps its value and can be exchanged like any other currency – besides I do not think the very extreme conditions are likely to arise. The world seems remarkably quiet for all the financial distress of the past year – we could well be in for a further devaluation or high inflation, not necessarily the end of life as we know it!
I am so sick of these “doom & gloom” people who claim that gold is going to $10,000 an ounce and that the U.S. Dollar will literally become worthless. What fantasy world are these people living in? The U.S. will survive. We always survive.
Hello,
I have two questions:
1. How close are we from the Amero?
2. Saving options: I have some CDs at the bank for retirement purpose and kids collage money (they are now 9 and 5 y/o). I thought that using CDs to buy physical gold or other precious metal to make more profit was a better strategy. But with your posting, now I’m not sure…What would you suggest? What mean gold will not be a good ROI? preserve capital? What options should I consider?
From Jim S. comment:
“Do not think you will make a huge ROI on gold and silver. Gold and silver will be so ridiculously high, because the dollar will be crushed, never to return to its value of today. It will throw all the global fiat currencies of the world on edge.
The rules of investing are totally different than they have been the last 25 years. This is a world wide currency crisis, a systematic breakdown. Your focus is to PRESERVE capital, especially if your investments are in US Dollars. I can not stress this point enough.”
Ed Note: 1. Five years 2. Only the short term is a worry with gold so buy for long term preservation of value.
hi i have been following up on these economic trends since i read harry schultz’s books: stock market crashes and panics, and bear market investment strategies early this year. my question is this : what advice can you give to those of us in the third world like me whose economies are primarily oil driven and dollar dependent, who want to be prepared before the storm blows. i dont know how to buy good delivery bars . how do i get about it?
Ed Note: Have a look at the Perth Mint website.
Question: WHY is gold so valuable, and why does it hold its value so well?
And silver?
Ed Note: rarity and immutability.