Wednesday, June 30, 2010


Gotta Love Rick, He speaks the Truth.

And as a side note, is the only reason to watch CNBC anymore.

Feel for yah...

"Personally, I'm not too optimistic. I still have a bad feeling about the economy. I feel there's a lot of BS in the air. If the Dow Industrials and Transports drop below their May 7th lows, the next drop could be a long one. I pray for anyone still in the stock market. I'm concerned for my fellow baby-boomers who are hoping the market goes up in price so that they can retire."

- Robert Kiyosaki

S&P 500 Support Broken, Get Ready for a Slippery Slope!

1,040 taken out. 865 next stop. Get Ready for a Volatile Summer, probably won't bottom until October of this year. Ouch.

Tuesday, June 29, 2010

Dear Comrades In Golden Arms,

Dear Comrades In Golden Arms,

Equity markets are sharply lower, the Euro is sharply lower, commodities are under significant pressure. Gold opens lower and recovers $16 from the low to be up on the day.

1. The type on inflation being discounted by Gold requires business activity to be putrid.
2. This type of inflation is hyperinflation, which is a currency event, not an economic demand phenomenon.
3. Rather than a singular currency loss of confidence igniting hyperinflation, it will be all Western currencies moving against each other with intolerable to business volatility.
4. All Western governments will practice QE to infinity, as we return to credit market problems. The statement of the G20 and Prince Charles cutting down on caterers is all smoke and MOPE.
5. Gold is NOT a commodity.
6. Gold is a currency
7. Gold is the currency of choice.
8. Gold is going to becoming the reserve asset of choice by central banks
9. Ownership of gold means you are your own central bank.


The arguments between inflation and deflation revealed itself today to be purely semantical.

Gold is headed in this move to $1650 with its normal drama.

- Jim Sinclair

Thursday, June 24, 2010

G20 Script

The G20 script caste against present circumstances.

1. EC members terrified by the power of OTC derivatives to destroy national bond markets are running scared. The strategy is twofold. Intervention at $1.19 to $1.20 in the euro and massive PR concerning strong currency initiatives weakened the dollar from its highs and took the euro so far into its $1.24-$1.25 key resistance.

2. Bernanke as a student of the Great Depression organizes a strong argument for continued coordinated monetary expansion with the US Treasury.

3. Monetarism fails miserably when applied in an open system. That is its major weakness. Bernanke’s thesis demands the entire Western World be on the same page of Monetarism for without it new lows in the history of this period will be established. A return to locked credit markets is a reasonable assumption

4. Media seems to have slowed down on its revelations of EU weak states.

5. There seems to be a slight pickup in media discussion of the dire condition of US states heading towards bankruptcy.

Keep in mind that in this new global economy a problem anywhere is a problem everywhere. As any currency in the Western World comes under attack, Gold has become the asset of choice.

Be ready for more violence in the USD/EU equation. Violence regardless of direction will be gold positive. This move is to $1650 and beyond.

- Jim Sinclair

1930's and Now

The 1930's and now are looking more and more similar, The Gulf Oil spill, The Dust Bowl? Different yet the same, Think about it.

Wednesday, June 23, 2010

The International Forecaster - 6/19/2010

"Remember what JP Morgan himself said: "Gold is money, period." And soon it will be the only money that has any value, period. Gold, silver and their related shares are the only place to be. Stay clear of paper gold and silver and buy physical only and take possession. These paper gold and silver Ponzi schemes, like GLD, SLV, OTC derivatives and mint certificates are going to be exposed soon. Very shortly, JP Morgan will be sued in class actions by big players that have been criminally screwed in the silver markets, and this could be the catalyst that finally blows the whole precious metals fraud wide open. So load up!"

- Bob Chapman

Monday, June 21, 2010

Gold at new record high after Saudi reserves double

Gold prices hit on Monday a fresh record high of almost $1,265 a troy ounce following the revelation that Saudi Arabia, the world’s largest oil exporter, is sitting on more than twice as much gold as previously thought, according to new estimates.

The disclosure points to the revival of bullion as part of emerging economies’ official reserves and comes as investors pour money into the yellow metal.

The weakness of the dollar following China’s decision to make the yuan more flexible, gave bullion further momentum, analysts said. A stronger yuan makes the cost of gold for Chinese buyer cheaper, potentially increasing demand. China is the world’s second largest gold consumer, after India. It is also the largest producer.

In early trade in London, spot gold surged to $1,264.9 an ounce, up 0.7 per cent from Friday’s last quote in New York. It later pared gains to trade at $1,258. Adjusted for inflation, however, bullion is still below its all-time high of more than $2,300 set in 1980.

Traders and bankers said hedge funds remain extremely bullish on gold because they believe that, sooner or later, the central bank’s recent massive monetary expansion would translate into inflation. Some hedge funds have internal forecasts above $1,300-$1,500 for the end of the year, bankers said.

Friday, June 18, 2010

Hip Hip Hooray?!?

"Do not confuse a rising stock market environment as an indication of economic stability or improvement. The Weimar Republic model illustrates how financial and social pain can be associated with a rising stock environment."

The Move to $1650 and what it Means for Producers

It is my feeling that gold is headed on this move to $1650 with its normal drama.

Let’s think about what this means to gold producers.

With gold valued at $1650 per ounce:

- 500,000 ounces = $825,000,000 less the cost of mining.
- 1,000,000 ounces = 1,650,000,000 less the cost of mining.
- 2,000,000 ounces = 3,300,000,000 less the cost of mining.


- Underground average costs are approximately $500-$600 (assuming no derivatives or derivatives covered as international and Canadian GAAP requires derivative losses be expensed to the specific property).
- Open cut average costs are approximately $300 (again, assuming no derivatives or derivatives covered).
- On surface average costs are approximately $22-$75 (again, assuming no derivatives or derivatives covered).

- Jim Sinclair, of

Thursday, June 10, 2010

Time to buy? Now even China is trying to talk gold down

BEIJING -- The gold market is too small, illiquid, and volatile to be suitable for asset allocation, China's State Administration of Foreign Exchange (SAFE), said in its annual report published on Thursday.

SAFE, part of the central bank, the People's Bank of China, last year revealed its gold reserves had grown to 1,054 tonnes from 600 tonnes in 2003, mainly the result of buying up local production. It has not given any update of its holdings since then.

Good old China. Remember actions speak louder than words.

Tuesday, June 8, 2010

Are Gold Prices Manipulated?

"Chris Powell Secretary/Treasurer Gold Anti-Trust Action Committee or GATA discusses the gold manipulation debate and reveals his price target for free-market gold."

BMO Has A Simple Message To Its Clients: Go To Cash Now

In a surprising development, the most bearish, and easily most comprehensive, report that we have read in a long time on the broader markets, comes from Canada of all places, via BMO's Quant/Tech desk. The report's title is simple enough: Go To Cash - In Plain English. Not much clarification needed. Here is the gist: "We advocate switching out of equity positions and going to cash. The European sovereign debt crisis appears to be nowhere near over. The global credit environment is worsening. Cost of capital is going up and availability is going down. There are large gaps between where the credit market prices risk and where the equity market is priced. Equity is lagging the deterioration in credit conditions. Moves in currency, equity and commodity markets are mirroring the moves in the credit market. Global growth, in a credit-constrained environment, will slow. Profits will be squeezed by the higher cost of capital...We advocate a zero weight toward equity, and that investors convert their equity positions to cash."

Here is a link to the original report with far more technical data.

- Tyler Durden, Zero Hedge

Saturday, June 5, 2010

Bill Laggner: Markets Vulnerable

Bill Laggner guest posts for KWN:

"The break in the Euro today coincides with the break in the S&P 500 and the support levels of the most recent months have been 1040 to 1050. Those levels now look vulnerable. As the stimulus wears off and the current administration does not have an encore performance, those levels may just give way finally.

The Euro dropped to multiyear lows as Hungary joined Greece in the global economic sovereign debt crisis. Like the Greeks, Hungary and other Eastern/Central European countries cope with economic contraction while debt servicing on both a private and public level remain insurmountable. Societe Generale (SocGen) rumors started overnight when several sources unveiled derivative impairment charges possibly linked to Hungary economic news which shouldn’t surprise anyone since SocGen has over $28 billion in Eastern/Central European debt exposure. To put things in perspective SocGens Eastern European exposure is roughly 60% of equity!

Other French banks remained quiet today as Trichet continues to monetize approximately $2-3 billion per day in Greek sovereign essentially bailing out his countryman’s finance houses while the Germans ask “where is our bailout”. According to latest ’09 filings some of the largest German banks are levered anywhere between 70-80X so a Greek bailout only partially removes some of the toxic waste from their respective balance sheets. No word on how much potential liability lies in the Eastern bloc but sources tell us the situation is dire indeed.

The ECB has elected to enter the QE road. In two weeks the central bank of the United States will meet and looking across the pond and seeing their european counterparts monetizing to the tune of $1 trillion dollars will Bernanke opt into more quantitative easing to stop asset prices from breaching their most recent lows?"

Bill Laggner

Bearing Fund

Friday, June 4, 2010

Dear Comrades In Golden Arms,

"If you do not see the hand of intervention in the gold market early this morning you are either wearing welders gear or are simply inept in this field.

Like the euro intervention being useless in the grand scheme of things, so is the gold intervention this morning.

Above $1224 the manipulators will lose their influence in the price of gold. We sure witnessed that last US night in the euro.

The real numbers now that you will not hear on F-TV are $1.19 and then $1.10, below which the euro will collapse. This will return us to the dark ages in Forex, but will be good for the business of Forex trading.

With regards to our newest sovereign problem, if you were Hungarian would you prefer to own gold or paper of any kind? That is assuming you had any money in the first place to buy gold."

- Jim Sinclair, of

Thursday, June 3, 2010

Gold Going to Grind Higher

“I expect it’s going to continue to grind higher. I mean the fact that there’s no legitimate currency left for any big deep pools of money, the currencies all seem to be flawed pieces of paper...I think you’ll see more central banks buy gold”

- Bill Fleckenstein referring to the price of Gold.