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Dear CIGAs,
The G7 has indicated that there may not be any communiqué at the end of their meeting. Could that be because when you cannot say anything good, you should say nothing at all?
Jim Sinclair’s Commentary
Gold is NOT going to ONLY $1650. Gold is going to exceed $1650 by orders of magnitude for reason that are simply shocking.
Martin Armstrong must be added to the lists of:
Faber
Rogers
Dent
Celente
and for TA on the gold price it is Alf Fields.
Armstrong:
"Welcome to 1984. It may be a little late on its timing, but it warnings which had to be read in high school English class are fairly on target. So the next Wave into 2016. It is shaping up to be something far beyond what many may think is even possible.
WATCH GOLD! For it is the canary used by coal miners as the early warning system to deadly gas."
Jim Sinclair’s Commentary
Not written exactly as I have outlined to you, but it does approach the subject from the dollar’s viewpoint which in the final analysis is correct.
Why Gold, If Deflation Is the Threat?
by Rolfe Winkler
Alice Schroeder wrote a great column for Bloomberg yesterday that I’m just getting to. The best stuff comes at the end, where she describes why some people are buying gold even though inflation doesn’t seem to be a big risk. (Apologies in advance for block-quoting lots of stuff in this post, but I think it’s worth it…)
[Gold bugs] aren’t just betting on inflation, as is the conventional wisdom. Gold has a wicked history of being an unreliable inflation hedge. It has, though, at times been a haven against sudden currency depreciation.
In all the talk of inflation because the Treasury is printing so much money versus deflation because it may not print enough, there is one type of inflation that is rarely discussed. This is the mega-inflation caused by a sudden currency…
Jim Sinclair’s Commentary
The economic argument presented yesterday in interview would sustain our position on general commodities as a product of currency depreciation, and is support by Mr. Pellegrini.
Paulson as you know favors gold.
Paulson Vet Pellegrini: Toward a Fair Economy for the Masses
October 02, 2009
TraderMark
I admit I had not heard of this fellow until I saw this interview on Zero Hedge, but apparently this is the key brain behind the massive bet against subprime mortgages that made John Paulson both famous and one of the wealthiest men on the planet.
The man who "made billions of dollars for John Paulson shorting real estate," Paolo Pellegrini of PSQR LLC, discusses his economic outlook and investment strategies.
Pellegrini, born in Milan, worked for investment bank Lazard Ltd. from 1986 to 1995, according to Paulson & Co. marketing materials. Like Paulson, he has a master’s degree in business administration from Harvard University.
Now he has moved on to his own fund. Not only is it a good interview, but I am struck that we have reached the point that a hedge fund manager has to go on Bloomberg to argue for a fair economy for the masses. Ummmm…. are there words for what has happened to the U.S. system? I never thought that in the argument of the elite versus the masses, hedge fund managers would be joining the cause of the masses AGAINST our so called "representatives" and their top donors.
All I can say is (A) it is surreal, and (B) I am glad to hear some prominent and bright minds agreeing with what we have been preaching for a few years. I used to sit alone (or with only a few others) on this park bench, in the trenchcoat, with this brown bag in hand, talking crazy. Now I see guys in $6,000 suits talking crazy like me. Welcome to the park bench fellas.
Jim Sinclair’s Commentary
This is the first sign that the market propaganda which states the US dollar is a safe haven took a body blow on Friday.
Friday FX View: Dollar Gets a Pasting
October 02, 2009
Andrew Wilkinson
Investors chose to be ‘shocked’ by Friday’s larger-than-expected rise in American workers laid off from jobs. Some 263,000 more workers were fired throughout September raising the rate of national unemployment to 9.8%. A rather nervous equity market was poised to react further to the downside, but as nerves settle in the aftermath it’s beginning to feel as though the panic has been somewhat magnified of late. Some may have feared that the next leg of the recession was just around the corner all along. Others seem to have facial smirk that says, “See. I told you the stimulus would run out of steam.” Curiously, the dollar is down on prospects for a longer monetary policy vacation, while risk aversion doesn’t necessarily feel as though it is running the roost today.
Jim Sinclair’s Commentary
No. The question is can CIT continue to serve their clients at reasonable rates in reasonable size?
CIT Group Does the Balance Sheet Shuffle
October 02, 2009
Cru Jones
TONS of new common equity – all we need to know now is how many new shares to divide by. Uh….
I’m looking for some value for common shareholders in CIT Group’s (CIT)"extra-info" documents filed a few hours ago. Common shares are up 19% or twenty cents in premarket trading, as the company does the "balance-sheet-shuffle." Not to get all crazy on ya, but there may be some common shareholder value left here…Maybe. The balance-sheet shuffle is turning debt holders into new preferred equity holders. The question remains as to what will be left for silly "common" shareholders.
Jim Sinclair’s Commentary
That is no problem. Call the IMF and they will issue you SDRs.
World Bank could run out of money ‘within 12 months’
The World Bank is close to running out of money, its president, Robert Zoellick, has disclosed.
By Edmund Conway, Economics Editor in Istanbul
Published: 8:36PM BST 02 Oct 2009
The Bank, whose job it is to support low-income countries, has had to hand out so much cash in the wake of the financial crisis that its resources could run dry within 12 months.
“By the middle of next year we will face serious constraints,” said its president Robert Zoellick, as he launched a major campaign to persuade rich nations to pour more money into the Washington-based institution.
He conceded that such a task was likely to be extremely difficult, given the difficulties facing countries in the wake of the developed world’s biggest recession since the Second World War. However, Mr Zoellick, speaking at the opening of the IMF and World Bank annual meetings in Istanbul, said the Bank needed a capital increase of as much as $11.1bn (£6.9bn) to keep functioning. He said he hoped that its shareholders, including the UK and other leading nations, would decide on resources before its spring meeting next April.
The money would be shared between the International Bank for Reconstruction and Development – the key part of the bank, which lends to poor nations – and the International Financial Corporation (IFC), which lends to companies.
Mr Zoellick said: “We recognise that all countries are under budgetary strain and it is not an easy time to be asking for these things”.
Jim Sinclair’s Commentary
Friday’s score for the FDIC. We now have credit unions being closed by other agencies.
Bank Closing Information – October 2, 2009
These links contain useful information for the customers and vendors of these closed banks.
Southern Colorado National Bank, Pueblo, CO
Jennings State Bank, Spring Grove, MN
Warren Bank, Warren, MI
Jim Sinclair’s Commentary
The International Herald Tribune just reported the following.
This is not going to make Israel happy, nor Washington’s sources look credible.
Report Says Iran Has Data to Make a Nuclear Bomb
By WILLIAM J. BROAD and DAVID E. SANGER
Senior staff members of the United Nations nuclear agency have concluded in a confidential analysis that Iran has acquired “sufficient information to be able to design and produce a workable” atom bomb.
The report by experts in the International Atomic Energy Agency stresses in its introduction that its conclusions are tentative and subject to further confirmation of the evidence, which it says came from intelligence agencies and its own investigations.
But the report’s conclusions, described by senior European officials, go well beyond the public positions taken by several governments, including the United States.
Two years ago, American intelligence agencies published a detailed report concluding that Tehran halted its efforts to design a nuclear weapon in 2003. But in recent months, Britain has joined France, Germany and Israel in disputing that conclusion, saying the work has been resumed.
A senior American official said last week that the United States was now re-evaluating its 2007 conclusions.
