Bernanke is in no position to announce another round of QE

Politically Bernanke is in no position to announce another round of QE. If he were to try this route once again, a route which has obviously been an abject failure considering that between QE1 and QE2 over $2.5 TRILLION was spent with nothing to show for it except a collapsing Dollar and rampant inflation in energy and food prices, he would unleash a firestorm of protest here in the US and certainly abroad by our largest creditors, China in particular.

- Trade Dan

Mining Share Ratio To Gold Back At Pre-QE1 Levels

Gold’s move to a new high today above $1764 has not happened for technical reasons. There are fundamental problems in the entire Western World Finance that lack solution.

Gold is heading exponentially beyond any expectations of the short of gold share hedge funds.

Weakness in gold shares is manic at this point, and the shorts will not see the top in gold they expected now or for years to come.

Respectfully,

Jim Sinclair of JSMineSet.com

The World's Debt has Grown Unsustainable!

- Picture via JSMineSet.com

Jim Sinclair interviewed by James Turk

James Turk, Director of The GoldMoney Foundation, talks to Jim Sinclair, host of http://www.jsmineset.com/, about his successful gold price predictions, US debt problems, how to ride the trend and the second phase of the gold bull. It's a gear change from arithmetic to exponential growth as public perceptions about the safety of the US dollar changes. The debt ceiling debate is a wake up call for people all over the world. The video was recorded on August 5 2011 at the GATA conference in London.

Jim Sinclair on CNN Your Money

Jim Sinclair on CNN Your Money. Note their reaction to his prediction of gold $1650. Funny times.

The Cat is Out of the Bag, Gold to Soar, Dollar to Crash

There is no functional hedge against the downgrade of US Treasuries that is sure to come with or without a default except gold.

The cat is out of the bag. The political opposition can back the present administration into a corner on the most important issue, debt.

If that is the case with debt, then what else could they do it with?

To assume there will be a default is extreme, however within a week we will know. There are those in the political opposition that might go to any length to cripple the present administration.

The only conclusion that I can come to is that you should NOT take your gold hedges off. At $1764 a runaway gold bull market becomes an exponential run away gold bull market.

After $1754 Alf and Armstrong become the predictors of note for Gold at $3000 to $12,500.

Respectfully,
Jim Sinclair of JSMineSet.com

The Die is Cast

My Dear Friends,

Have you thought about all the dramatics now taking center stage in the media? What compromise will be adopted that will allow for the US to avoid default by raising the debt ceiling?

Raising the debt ceiling is the problem and not by at means a solution. The race between dropping revenues and increasing costs will not be settled by politicians that do not even understand the problem.

The resignations of key economic personalities in the present Administration is systematic of the solid nature of the downward spiral that has gripped Western finances since the failure of OTC derivatives turned a normal recession into a long term depression.

There is no event that will turn the tide of the ramifications for poor economic management. Nothing can stop Gold, Silver, the Swiss and the Cando now.

The present drama of tax increases and spending cuts, like the release of oil, means nothing whatsoever even in the medium term.

The damage is done as the damage is cumulative. Day to day events are irrelevant. Day to day market activity is interesting but meaningless.

The die is cast. All we can hope is that gold is not headed to $12,500.

Regards,
Jim Sinclair

The Ceiling of US Debt!

- Picture via JSMineset.com

Sinclair - You’re Out of Your Mind If You Sell Gold Assets Now

You don’t need one more thing to happen, you don’t need any more problems, you don’t need any more degrees of problems.  You’re in a situation right now where if confidence is to be lost, be it by the equity market taking an outrageous header, the price of gold will not only go to $1,650, $3,000, $5,000, but has the possibility of going into five figures based on just what we have here and now.  That’s what you need to understand.  That’s why if you let go of any of your (quality) gold shares, you let go of your gold, you let go of your coins, you are out of your mind.

- Jim Sinclair, as interviewed by King World News

Read the full article here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/6/16_Sinclair_-_Youre_Out_of_Your_Mind_If_You_Sell_Gold_Assets_Now.html

Gold to Exceed $12,500

"...A cessation of quantitive easing could open up the black hole of Calcutta for the general equities markets in a way that very few really understand.  You could see thousands of points taken off that market in a very short period of time.

The only way to overcome that would be by whatever name you called it to start the QE again.  That would be indicative of a total loss of control.  So the question is what would the price of gold be if it became publicly undeniable that control of the economic functions for the believers no longer resided in Federal Reserves and central banks? 

The answer is gold would do what it historically attempts to do and that is to balance the balance sheet of the United States of America’s external foreign debt...and when we do the calculations we come up with a figure that is in excess of $12,500.”

- Jim Sinclair via a King World News Interview

China SAFE Reports Monetary Gold Holdings Increased By $11 Billion, Or 30%, In 2010, As Gross Foreign Financial Assets Pass $4 Trillion

China's State Administration of Foreign Exchange (SAFE) has released its breakdown of 2010 international investments. In summary: financial assets abroad rose 19% last year to $4.126 trillion from $3.457 trillion. That includes the country's $2.914 trillion of foreign reserves at the end of 2010 as well as other assets such as direct investments, securities, and gold. As for gold, it increased by $11 billion from $37.1 billion to $48.1 billion, or a 29.6% increase (it is unclear if this number is at a fixed gold price or accounts for MTM). On the liabilities side, which increased from $1.946 trillion to $2.335 trillion, the biggest change was as a result of a surge in Foreign Direct Investment into China which increased by $162 billion to $1.476 trillion. Netting liabilities against assets leads to a net position of $1.79 trillion in external net assets.

- Read the full story at Zero Hedge, Here:


http://www.zerohedge.com/article/china-safe-reports-monetary-gold-holdings-increased-11-billion-or-30-2010-gross-foreign-fina

The Mathematics Of Gold

Assumption:

Because gold is held by many central banks, once as a reserve currency but now as an inventory currency, it functions as a swing asset to balance the International Balance sheet of the US.

Central banks are sellers of dollars but still hold, by default, large dollar inventories.

China has hedged its dollar position 50% through commitments to long term dollar commercial agreements, pay in, mineral, and energy deals internationally. That is an act of pure genius.

We can assume other central banks still hold 90% of their reported dollar positions, on average unhedged by commercial obligation positions.

In crisis times, the US dollar price of gold ALWAYS seeks to balance the International Balance Sheet of the USA.

Therefore:

Take 90% of international US dollar debt less China and then add 50% of the US debt owned by China. Then divide that number by the ounces supposed to be owned by the US Treasury. The result is where gold wants to go.

In 1974 this gave me $900 gold. Now you do your homework, and submit your analysis to me. Do this, and I will give you Angels going to that price by a little known technique of Jesse Livermore that only works on gold after it has broken to a new high above all resistance.

Little by little I am passing on all that I have learned from Jesse through Bert to those that read every day in thanks for your support of me and mine.

- Jim Sinclair of JSMineSet.com

Don't Trade Gold. Accumulate it.

"Too many people who are new to the precious metals markets attempt to trade them.  Non-professionals are attracted to trading like moths to a flame and both are very dangerous.  The bottom line is to focus on accumulating physical gold and silver because at the end of this bull market what will matter is not how many dollars you have, but how many ounces of gold and silver you own.”

- James Turk, KWN Interview

What Destroyed Rome Was Its Unfunded Government Employee Pensions

China Is Now Top Gold Bug

Chinese investors are snapping up gold bars and coins, buying more than ever before in the first quarter of 2011 and overtaking Indian buyers as the world's biggest purchasers of the metal.

China's investment demand for gold more than doubled to 90.9 metric tons in the first three months of the year, outpacing India's modest rise to 85.6 tons, the World Gold Council said in its quarterly report on Thursday. China now accounts for 25% of gold investment demand, compared with India's 23%.

- Wall Street Journal