Monday , 17 June 2024

Jim Sinclair: Gold & Gold Share Bearishness a Contrarian’s Dream

Follow the munKNEEvia twitter & Facebook

Gold will not be confiscated because it becomes a major asset of the insiders. Gold producing companies with low cost operation will enjoy the leverage common to that industry in what is about occur. The amount of bearishness now developing in gold and certainly in good gold shares is the ultimate contrarian’s dream about to come true. Words: 968

So writes Jim Sinclair ( in excerpts from his commentary* entitled The Bright Future of Gold: The Final Solution of the 2008 Monetary Crisis which is quoted below.

This article is presented by (A site for sore eyes and inquisitive minds) and (Your Key to Making Money!) and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The author’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article. Please note that this paragraph must be included in any article re-posting to avoid copyright infringement. 

“Dear CIGAs,

Let’s keep things very simple:

1. The future of gold will not be determined by the USA.

2. The present manipulation in gold is purely Western, and any other thought is rank nonsense. This event is both short term and very short sighted in terms of people’s published analysis.

3. The triumvirate of Euroland, Russia and China will determine the future of gold as financial power has shifted from the West towards the East.

4. The strategy of the flushing of Lehman Brothers was to initiate a transfer of failed and to fail debt and debit, producing obligations in all forms from the balance sheets of international banks and investment banks onto the only entity that could mechanically accept them in infinite amounts, the balance sheet of Western central banks. To avoid a total and terminal collapse of Western finance, the US Fed had to take the entirety of the problem onto its balance sheet in exchange for newly created electronic bank wired funds.

5. This cash then simply filled an empty hole that was not visible to a general public because of the willingness of FASB to allow these institutions to call what was worthless as full value.

6. The means of the transfer is presently and was QE.

7. QE was a total success in stopping an absolute economic collapse of the West in an unprecedented economic proportion.

8. QE was for the banks and not for anything else. It filled a black hole made invisible by FASB capitulation to political pressure allowing fraudulent computer valuations. This gave birth to the large equity rally off the bottom in early 2009 within two weeks of the FASB’s capitulation.

9. Because of the nature of QE, the only real economic stimulant was the wealth effect of a roaring equity market. That left Main Street totally out of the equation and did nothing to reverse the long term bull trend in unemployment.

10. Any consideration of an exit formula for the Fed to reduce the size of its balance sheet must take into consideration the quality of the assets that QE has purchased, which is known to have a strong emphasis on paper that truly has and will never have a market. For those assets that do have a market, sales of the dimension of the purchase would certainly impact interest rates in a most alarming way because of the lack of international buying of US Federal debt. All debt markets affect all other debt markets from the loan shark to the US treasury.

11. So there must be a way of doing the necessary in order to compensate for the weak asset expansion of the balance sheet of the Fed and other central banks because there is no exit strategy despite the over-educated academics that would try and convince you otherwise.

12. I am the most practical market related writer in this field. I assure you all talk of an exit program is based on a full recovery to opulent economic times that QE is not designed to produce, nor can.

13. Because the problem at the time of Lehman Brothers was so great, there wasn’t even a good estimate of its size so that QE had to be to infinity. I stated that many years before Bloomberg.

14. Therefore the solution to the present problem that must take place before there is any chance of real economic recovery is that central banks must balance their balance sheet in an economic condition as present and predicted here to remain about the same or worse that permits absolutely no exit strategy.

15. That means that the price of gold as the other central bank asset must rise in the free market significantly so that the balance sheets of the Western world central banks begins to heal and maybe even balance. [Arnold Bock, and then James Rickards, made similar assertions approximately a year ago in articles Governments Will Want – Will NEED – Much Higher Gold Prices! Here’s Why and Rickards: Gold May Super Spike as We See the End of the Dollar and now Stephen Leeb]

16. The mathematics of the price of gold are well in excess of the two magnets now functioning at $2111 and revolving around $4000. [Read: Alf Field: Gold Going to $4,500/ozt. in Next Wave Towards Parabolic Peak]

17. Marry this concept to the recent memo of CIGA Belgian [see here] and you have the total solution to the present problem that no other mechanism can produce. This will be initiated not by the USA, but by Euroland, Russia and China.

Now add the text of the discussion of earlier this week on the ascendancy of the euro as we enter the final chapter of the Monetary Crisis of 2008 caused by the fraud of OTC derivatives, a crime with many millions of victims and potentially a lost generation. Not one of the major perpetrators suffered corporal repercussions….


You have all the mechanical parts of the solution to the problem. The progress toward resolving this mess will again make huge profits for the “Good ole boys club,” particularly the Yalies.

Gold will move up in the free market and that is what this reaction is all about. The Canadian Dollar, Swiss and Euro will all benefit. Gold will not be confiscated because it becomes a major asset of the insiders. Gold producing companies with low cost operation will enjoy the leverage common to that industry in what is about occur. The amount of bearishness now developing in gold and certainly in good gold shares is the ultimate contrarian’s dream about to come true.

This is the golden stage. It is so simple it is almost silly, but few if any, really get it.




Sign up HERE to receive’s unique newsletter, Your Daily Intelligence Report

  1. FREE
  2. The “best of the best” financial, economic and investment articles to be found on the internet
  3. An “edited excerpts” format to provide brevity & clarity to ensure a fast & easy read
  4. Don’t waste time searching for articles worth reading. We do it for you!
  5. Sign up HERE and begin receiving your newsletter starting tomorrow
  6. You can also “follow the munKNEE” via twitter & Facebook

Related Articles:

1. Governments Will Want – Will NEED – Much Higher Gold Prices! Here’s Why


That governments will want – and will NEED – much, much higher gold and silver prices in the future is counter intuitive, given that they have done everything within their power to throttle back and to keep a lid on bullion prices. Let me explain why. Words: 1300

2. Bock and Rickards Agree: Governments Want Gold to Go Higher!

James G. Rickards, author of the current best seller Currency Wars, is so informed and articulate that he is almost scary in his clarity. He is the only person who essentially says what I have been saying about the “hidden” intent of the US Treasury and Central Bank – to deliberately weaken the US dollar and to cause price inflation, all in the interests of improving US competitiveness and to pay debt through financial repression. Ergo…they indirectly want and will cause the price of precious metals to escalate. Words: 398

3. Rickards: Gold May Super Spike as We See the End of the Dollar

They (the Fed) really want to trash the dollar. Contrary to what a lot of people think, the Fed wants gold to go higher. They just want it to go up in a controlled way, they don’t want to see a super-spike. We may get a super-spike anyway just because of panic buying.

4. Alf Field: Gold Going to $4,500/ozt. in Next Wave Towards Parabolic Peak


Once this present correction in gold has been completed it should [undergo] the largest and strongest wave in the entire gold bull market…to around $4,500 with only two 13% corrections along the way. [Let me explain how I came to that conclusion.] Words: 1900

5. America’s Derivative Market is Unbelievably Huge & Totally Unregulated  – Take a Look at Which Banks Own How Much

Derivatives #2

The derivative market has blown a galactic bubble…and since there is literally no economist in the world who knows exactly how the derivative money flows or how the system works,…we really don’t know what will trigger the crash, or when it will happen, but considering the global financial crisis this system is in for tough times. [If, and when, it happens it] will be catastrophic for the world financial system. If you ever wanted a tool to help yourself or others visualize the staggering magnitude of US debt and derivatives, the infographic below is a good one to share. It visualizes who those 9 too-big-fail banks are, what their derivative exposures are, and what scandals they’ve been lately involved in. Words: 1915

6. Derivatives: Their Origin, Evolvement and Eventual Corruption (Got Gold!)

The term “derivative” has become a dirty, if not evil word. So much of what ails our global financial system has been laid-at-the-feet of this misunderstood, mischaracterized term – derivatives. The purpose of this paper is to outline the origin, growth and ultimately the corruption of the derivatives market – and explain how something originally designed to provide economic utility has morphed into a tool of abusive, manipulative economic tyranny. Words: 3355

7. Alf Field: Will Derivative Losses Be Black Swan Event Propelling Gold to $4,500?


To achieve the EW target of $4,500/ozt. on the next upward move [in gold that I laid out in my article Alf Field: Correction in Gold is OVER and on Way to $4,500+!] will require something to trigger substantial new buying of gold. What could that event be? By definition, it will be a surprise to all market participants, a “black swan” event. That doesn’t prevent us from making a guess [and] one likely area from which problems could emerge…[would be] derivatives. [Let me explain why that might well be the case.] Words: 591

One comment

  1. Lorimer,

    Stephen Leeb (see here) has just articulated on King World News my point that gold will rise because governments which own it (in his example it is the Chinese) will want higher PM prices for the metal for reasons cited but not well developed.

    That now makes James Rickards and Stephen Leeb in my court on this issue of certain governments wanting higher gold prices in the future rather than trying to keep tamping those prices down.