Gold heading into the $2,000s says Jim Sinclair
Posted on 02 November 2011 with 3 comments from readers
Jim Sinclair is the gold superbug because he got gold and silver so right in the 1970s and has been spectacularly right in predicting the return of the bull market for precious metals since 2000. Here are his latest thoughts on where gold is going now:
Gold is headed into the $2000s. The mess in Europe is incurable and can only be damage controlled by QE.
MF Global got busted because credit default swaps did not work. MF Global had their Greek and Euro bond position covered by credit default swaps that they thought would protect them. SURPRISE!
No default!
They did not work because the Greek situation of a 50% haircut was given another name than ‘default’ by a select group of Banksters and related parties.
97% of all credit default swaps written are carried by the major US banks. That means 97% of all the credit default swaps are the US usual Bankster suspects that swore to be more conservative in their ways.
If the Greek referendum is determined to represent a Greek default, major US banks will return to public insolvency and be bailed out yet another time because of the fraudulent nature OTC derivatives.
You think that game was rigged? China is coming to the rescue of no one. China specializes in picking up the pieces from troubled areas, not being troubled by troubled areas.
After Europe comes the US as media has been successful in keeping the focus of the problems off the US dollar. The only problem with gold shares is the hedge fund wild men and women that will in the end fail to stop the super bull market that is sure to come.
Gloom and doom
What is good for gold (QE) is also good for general equities so be careful on those that see doom everywhere.
Playing any one currency today is hard. Better hold a spread and seek to maintain buying power only. Competitive forced devaluation is the tool of strong currencies making it hard for exports in that currency. This is another example of making the Western world economic problems worse by curing the strong currency using liquidity to weaken it.
What today’s economic managers don’t know is Titanic in nature. There is no practical solution to the economic problems of today making gold in all forms desirable long term.
3 Comments posted by readers:
Gold at USD 2000 is a certainty……I would say 2200 is achievable.
Jim Sinclair is right!
BUY !!!
One would have thought that Weimar Germany’s hyperinflation was Titanic in nature, but it wasn’t.
In November 1923, the same month as Hitler’s failed beer-hall putsch in Munich, there was a change of central bank governor. He proceeded to right the Titanic so that it floated again.
He did this by changing the Mark to the Rentenmark, which was based, not on gold, but on the value of land. This brought inflation under control so that in 1926, I think it was, the Reichsmark replaced the Rentenmark.
From this moment onwards until the US Stock Market collapse, the Titanic was not only floating but was moving through the waters of economic activity at a satisfactory pace.
The German Titanic did not begin to sink until after 1929 and, even then, it managed to raise itself on to a level keel and move off again once Hitler started to grab the wealth of other countries such as Austria, Czechoslovaki and Poland, and reduce public expenditure by filling his concentration camps.
My point is that the Titanic never sinks! And maybe today’s economic managers know this!
They will ensure that higher inflation will keep the Titanic afloat and, if hyperinflation forces them to introduce the dollar equivalent of the Rentenmark, they will do this and eliminate hyperinflation.
The cruelty of the Titanic being unsinkable is that thousands and millions of people fall overboard because their savings have gone, their employment is no longer required and they can no longer buy the food that comes in from the countryside. They are ruined and destitute as Titanic sails proudly away.
What will the ruined and destitute do? They will resort to violence in their fury and anger at the untouched politicians, bankers and speculators. There will be skirmishes and clashes, civil disobedience and riots and, if Iran is looking on, an upgrade of all this to something more global.
For those of us who “speculate” that goldmoney and silvermoney will save our savings, then we will survive. We should not, however, boast about our wisdom amongst the totally dispossessed, who will class all types of speculators as the enemy.
The operative phrase for 2011 – 2012:
“Competitive, forced devaluation . . . This is another example of making the Western world economic problems worse by curing the strong currency using liquidity to weaken it.”
Well said, Ed.
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