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Dear CIGAs,

If you ever consider any of my opinions please consider the following as it is a key constituent in what you read here

I feel so frustrated that people associate hyperinflation as a demand pull phenomenon when it is always a currency event!

Hyperinflation and inflation of prices are two different categories, causative of the same basic result, one more serious and currency related.

Hyperinflation will be delivered to the US by the dollar vigilantes via the instrument of currency OTC derivatives prior to January 14th, 2011. If you doubt my date then take Armstrong’s June of 2011.

In a play on words, mark my opinion.

Dear Jim:,

I got the idea but please note that before the Weimar hyperinflation of 1923, the economy was doing pretty well. So the strategy of the Weimar short sellers made sense at that time as they could find a higher rate on the marketplace than their borrowing rate.

But you tell us that today hyperinflation will happen even in a recession. Is that because of peak oil or food supply problems?

Thank you very much.

Best regards,
CIGA Christopher:

Dear Christopher,

Please be cautioned that when you read economic statistic like personal income that income for those few that had jobs skyrocketed as the Weimar Mark tanked. Take caution when you see consumerism because as the axe was falling those that had eyes to see bought anything with Weimar marks they needed or they felt would hold buying power value in exchange, like breeding chickens.

If you read page 10 through page 16 of the following book, which is online, you will see that things were awful under the Treaty of Versailles and a direct comparison between the consumer of that period and the central bank type activities of the financial mechanism and the US Fed and Treasury right now.

Economics and politics in the Weimar Republic, by Theo Balderston,

I assure you that all hyperinflations take place in dire business and political conditions.

I feel so frustrated that people associate hyperinflation as a demand pull phenomenon when it is a currency event always!

Hyperinflation and inflation of price are two different categories of the same result, one more serious and currency related.

Hyperinflation will be delivered to the US by the dollar vigilantes via the instrument of currency OTC derivatives prior to January 14th, 2011.

As I explained to you before, as the money supply exploded in the republic you borrowed Weimar marks and sold them short in the then market, making delivery and in effect being short to the bank at the rate at which you borrowed plus interest.

Respectfully,
Jim

Jim Sinclair’s Commentary

The Gold Council seems like they will never change. The Gold Council, which is a mouthpiece for the major producers, reflects the degree of understanding of what gold is that the management of the majors ascribe to. Remember it was the majors that lost their rears betting against gold through their short of gold OTC derivatives, making the richest corporation in the world one of the major gold holders as the buy side of ALL those short.

The figure on China’s gold demand does not jive, and the Chinese central bank buying was NOT all from their in-country mining activities.

Gold is the primary currency when other currencies fail. Trinket gold only counts when the dollar is in a long term bull market.

Gold buying in Asia is not for the purpose of toe rings. It is the Asian personal central bank.

Gold jewellery is bought and sold by weight and little if any value is given for artistry. The artists work for peanuts there anyway.

An old friend I believe is holding a primary position there. Frank, you know I am right. When will you and the Gold Council get on the right page with gold?

Jim,

I’m sure you have already seen the article below. What I find quite interesting is the World Gold Council’s analysis for China consumers in the first quarter 2009.

“Gold demand in China in the first quarter rose to 114 tons, up 2 percent over the same period last year, solely boosted by an increase in jewellery demand," according to the latest Gold Demand Trends report for the first quarter of 2009 published by the World Gold Council”.

The others interviewed in the article seems to be at odds with the WGC’s findings. Even the picture in the article seems to omit one piece of jewellery.

Best,
CIGA Bernie

Gold fever grips Chinese investors
By Wang Ying (China Daily)
Updated: 2009-05-29 09:38

Bitten by the gold bug, Chinese investors are now rushing to hoard the yellow metal as fears over the global recession deepen.

The increased sales of gold bars and gold jewelry in Shanghai, Beijing, Guangzhou and other large cities are reflected in the precious metal’s price surge on the Shanghai Gold Exchange (SGE), which trades in gold contracts for forward deliveries. Gold prices quoted on the SGE have increased by an average 6.74 percent in the past month to the current level of about 209 yuan a gram.

"Gold demand in China in the first quarter rose to 114 tons, up 2 percent over the same period last year, solely boosted by an increase in jewelry demand," according to the latest Gold Demand Trends report for the first quarter of 2009 published by the World Gold Council.

More…

Jim,

The recent home and real estate reports reflect a continuation of already dismal trends. These trends should temper the “green shoots” rhetoric. The real estate malaise is merely a symptom of large problems frequently discussed on jsmineset.com.

New Home Sales:
http://www.facebook.com/photo.php?pid=1715088&l=d546c108e1&id=557304509

Real Median Home Price:
http://www.facebook.com/hoto.php?pid=1715089&l=c0ab73878c&id=557304509

Building Permits:
http://www.facebook.com/photo.php?pid=1715086&l=1100583cfb&id=557304509

Median Home Price per Months Supply:
http://www.facebook.com/photo.php?pid=1715087&l=fff9df401b&id=557304509

CIGA Eric