Jim Sinclair is as good a source of the market fundamentals as anybody out there. Some of his comments can be a bit confusing, though, but that usually is the result of his attempt to economize words. I don’t intend to be negative, but sometimes Jim leaves things vague enough that it can be interpreted in more than one way. Let’s take a look at some important comments that Jim has made recently.

Stocks are up. Bonds are expensive. Dollar cash is unlikely to preserve purchasing power in an environment of negative real rates. Diversifying to a basket of hard currencies might help to mitigate some of the risks out there. It clearly adds currency risk but in an environment where there may not be such a thing as a risk free asset, it might be a risk worth pursuing...

Precious metal miners operate in a large variety of countries and our interest in these mining companies on the one hand and country risk exposure on the other led us to compile a comprehensive list of jurisdictions of concern to precious metal investors....[numbering 47 in total. All 47 countries are ranked below].

Charts provide certainty, for they are absolute and the final word at the end of day, week, month, etc. There can be no dispute over a bar’s high, low and close, plus the volume, for whatever the time period under consideration. There is a high degree of logic within them and, while there can be differences of opinion over their interpretation, establishing a fixed set of parameters can mitigate most any potential dispute. So just what are the charts saying about the current trend in gold and silver? Let's take a look.

The Tokyo Nikkei Average rose +82% in just six months in a parabolic move that was doomed from the start. They almost always are. When a parabolic move breaks, as it did in May, the speed of the decline can be catastrophic and has fallen 22% to date. The downside expectation is for prices to return to the level of the basing pattern that preceded it. In this case between 8300 to 9100. That is not a prediction, just the level we at which we might expect to start looking for a tradable bottom.

The U.S. government is in what is known as a "debt death spiral". They must borrow money to repay prior debts. It is as if they are using their Visa Card to make an American Express payment. The rate of new debt additions dwarf any rate of growth the economy can possibly achieve. The end is certain, only its timing is unknown, and, once interest rates begin to rise, and they will, it's game over.

The euphoria phase of the bull market that I warned about months ago is now beginning its final parabolic phase. I'm guessing we still have another 1 to 1.5 months before this runaway move finally ends.

There are two market warning signs which have just recently been triggered and which have gotten a lot of press attention due to their catchy names - the Titanic Syndrome and the Hindenburg Omen - both of which are giving a “preliminary sell signal” based on analyses of 52-week New Lows (NL) in relation to New Highs (NH) on the NYSE within a specific period of time.

The annual survey American Community Survey by the Census Bureau collects much more detailed information than the decennial census, [and the data from the latest survey is depicted in maps, of which 5 are provided here on America's economic divide and] are relevant for thinking about communities most in need of investment.

Penny stock volume as a percentage of Nasdaq volume became a very large percentage (3.2%) back in the dotcom bubble peak in February of 2000, reflecting that a high level of speculative trading was taking place. In the next few years the Nasdaq 100 lost over 80% of its value! Recently such penny stock volume has risen to a record high of 4.5%! Will it be different this time?