Dear Mr. Sinclair,

You stated clearly this afternoon that today’s gold breakout is not a cause for celebration.  I concur completely with this statement as what we are witnessing is nothing short of the failure of confidence in US debt instruments and subsequently the common denominator of that debt, the US dollar. 

It is clear from my vantage point in the trenches that business is again decelerating at an accelerating pace.  Many of the contractors we have sold goods to for decades are unable to find new business.  What I am hearing is downright frightening and I know that your message, not to view the gold breakout in a celebratory manner, is because you care for those of us who are reliant on stable society and exchange for our livelihood. 

Nonetheless what is coming at us is inevitable and appears to be bearing down like a freight train.  You have provided us with the tools and continue to keep us informed and we are forever indebted as your CIGA’s standing by your side.

A quick question, this morning I came across an article that eluded to the fact that Iran might be pushing the gold price up in an effort of retaliation against US calls for sanctions.  This certainly seems plausible and led me to think about the subject further.  We know the Chinese are in this market providing support, that has been clearly established over the past few weeks.  Is it possible that in some form countries such as Russia who have clear discontent toward the US as well as other nations which may have been slighted over forms of forced IMF loans, etc. that damaged their economies are now utilizing this situation to inflict a more rapid and effectual amount of damage on our economy via the creation of a currency crisis?  Are they preempting the Chinese move in 33 days?

Best Regards,

Your friend,
CIGA Marc

Dear Marc,

I am so glad that you understood what I was trying to say.

I was in no way insulting anyone’s intelligence. The subject we deal in is clearly not one that would pass the litmus test of positivity except when viewed from our own survival.

Regards,
Jim

Jim,

Is this not another nail in the coffin for the US dollar and assures its descent into the carry trade cellar of death?

CIGA BJS

Dear BJS,

The carry trade’s selection of the US dollar as the currency of choice under present circumstances is the nail and the coffin.

Regards,
Jim

Australia central bank raises rates, more expected
Tue Oct 6, 2009 2:45am EDT
By Wayne Cole

SYDNEY (Reuters) – Australia’s central bank raised its key cash rate by 25 basis points to 3.25 percent on Tuesday and heralded more to come, saying it was safe to row-back on stimulus now that the worst danger for the economy had passed.

The Australian dollar jumped to a 14-month high and interbank futures slid as investors rushed to price in at least one more hike by Christmas, and rates above 4 percent in a year.

Markets elsewhere in Asia also moved to factor in expectations for more hawkish central banks.

The Reserve Bank of Australia’s (RBA) decision made it the first of the Group of 20 central banks to hike as the global financial crisis eases and came as a surprise to many analysts.

Markets, however, had been abuzz with speculation about a move given the strength of recent economic data.

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