Jimmy,

You undoubtedly already know this but could you reword the COMEX warehouse article to state that the sum total of gold for delivery at the Comex is the registered number and not the eligible number? 4,135,714 ounces eligible gold can be gold held by customers that will not be tendered…

Your pal,
Dan

Dear Dan,

This makes the paper gold market foundation “SET IN SAND” if any of today’s super wealthy financial international Muktars decided to break the bank at the Comex.

Regards,
Jim

Jim,

I hope I didn’t sound too negative in that last e-mail about keeping short term thoughts close to the vest for fear of sending signals to those who want to hurt us.

I am just totally burnt out with all of this today.

I thought that after 30+ years at this game I would have been a lot smarter, but I have been proven wrong once again and I guess it hurts a bit (actually hurts a lot).

I’m hanging in there, but emotionally I’m a little bit strung out.

Keep the faith, even if I might not be doing so well at it.
CIGA Buz

Dear Buz,

Every market is under world class manipulation as we approach election day in the midst of possibly the worst financial crisis in world history. This situation is killing us all.

It also makes us ask ourselves does crime pay? It certainly seems so. However, what goes around comes around so I prefer to hack it out without karmic debt.

Look at it this way, pain is the experience between two pleasures.

Regards,
Jim

Hi Jim,

I have been a faithful follower for over 3 years and appreciate your view on gold and the dollar.

I know you are busy but I have a question that I would appreciate you answering on your website.

Since the USDX is comprised of over 57% euros, how will the dollar reach .52 with the European economy so weak?

I know you have the answer, plus I wouldn’t know who else to ask.

Again thanks for all you do. I am in for the long haul.

Regards,
CIGA Ron

Ron,

The dollar, due to the creation of mountains of derivatives and now the bailing out the world, might just be in worse shape. The Weimar mark didn’t do so well.

Jim

Dear Mr. Sinclair,

I see the Paul Volcker (highly regarded by yourself) is becoming more closely involved with the Obama campaign. Could this affect the outcome of gold’s price rise if Volcker was to gain persuasive, policy changing sway with Obama?

Best Regards,
CIGA Marc Da

Volcker Makes a Comeback as Part of Obama Brain Trust
By Monica Langley
Tuesday, October 21, 2008

NEW YORK — At 81 years old, former Federal Reserve chairman Paul Volcker is getting a second chance to shape his legacy with a presidential hopeful more than 30 years his junior.

Mr. Volcker has emerged as a top economic adviser to Sen. Barack Obama during a presidential campaign dominated by a global financial crisis. Their growing bond is paying dividends for each man.

Mr. Volcker delivers gravitas and credibility to Sen. Obama, people in the Obama camp say, as well as ideas and approaches to the economic crisis. “Volcker whispering in Obama’s ear will make even Republicans comfortable, because he’s a hero of the right and a supporter of a strong dollar,” says John Tamny, a supply-side economist and Republican.

On Tuesday, Mr. Volcker is scheduled to appear on the campaign trail with Sen. Obama for the first time. At a round-table discussion with voters in Lake Worth, Fla., he’ll “give his view on the state of the economy and the credit markets, and what needs to be done to fix them,” says one campaign adviser.

More…

Dear Marc,

The Mother of All Crisis (Volcker’s statement) cannot stand the previous Volcker approach without a total planetary implosion from which there would be no recovery for generations to come. A socially sensitive president would never support an old Volcker approach.

A Chairman of the Fed must have the full support of the sitting administration to put in place extreme policy reversals in the midst of a total financial meltdown. This is especially true when the meltdowns are barely held together by wide open electronic printing presses and prolific spin.

Jim

Jim,

The following story illustrates that the US mint is having a hard time meeting coin demand. However in the years leading up to Y2K the mint cranked out many more bullion coins than this year by multiples of two or three. So, is physical gold hard to come by? What is the real reason that the US mint is not producing product? If this is unprecedented (the mints were not cleaned out in the 1970’s), maybe we are seeing the real big money going for the gold?

Like everything else that has happened so far, it looks like another sign that “This is it.”

CIGA Ken

Examining the “Unprecedented Demand” for Gold Eagle Coins
by: Michael Zielinski October 09, 2008

Earlier this week, the United States Mint took further actions to meet the increased demand for gold and silver bullion coins. This included production halts for certain bullion offerings and the continued allocation for one ounce Gold and Silver American Eagle coins.

Within the memorandum sent to authorized bullion purchasers, the US Mint specifically stated, “gold and silver demand is unprecedented.” Throughout the course of this year, the Mint has provided similar explanations each time a new suspension or allocation program went into effect. While sales of Silver Eagle coins are higher than any other year in history, the sales of Gold Eagle coins are far below their peak.

More…

Dear Mr. Sinclair,

I found today’s missive coupled with yesterdays FYI bullet points truly fascinating. Your depth of knowledge is constantly surpassing itself.

From my interpretation I found myself hinged on one primary aspect of the missive. You note the “possibility” of default due to the amount of COMEX reserves vs. the perpetuation and sheer size of the US dollar markets, however you note that during silver’s meteoric rise default was not necessary, only the “theory” or “noise” that the Hunt’s were going to take delivery of more silver than was available. We know the coin markets are already being cleaned out. Is all we need merely the perception of a run on COMEX by Asia?

Best Regards,
CIGA Marc Da

Dear Marc,

You are quite correct from a price impact perspective.

Regards,
Jim