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Dear CIGAs,
Somebody is watching over us.
Gold to hit $1650 by late 2010, early 2011, but estimate could be low – Jim Sinclair
As a contra to the dollar the outlook for the yellow metal remains strong
Author: Geoff Candy
Posted: Sunday , 22 Nov 2009
JOHANNESBURG –
The poor outlook for the dollar continues to provide good prospects for the price of gold.
According to Jim Sinclair, chairman at Tanzanian Royalty Exploration, the price of the yellow metal could reach as high as $1650 by the end of 2010 and moving into the beginning of 2011. But, the man admits that, given recent happenings, this could be a bit of a low estimate.
“My thesis is that gold is a contra to the US dollar and recent statements out of the Federal Reserve that interest rates will remain extremely low until 2012 is really a go ahead single for gold to continue to perform as it has until at least 2012.
Speaking to Mineweb Radio, Sinclair explained his reasoning: “If you look at the way US foreign debt is just about touching $3 trillion and our economy is not responding as China has, we have very serious systemic problems that have resulted in high levels of unemployment and I can’t buy on to a new normal economic recovery devoid of hiring people.”
He adds that the US is now beginning to apply fiscal stimulus, which has “a habit of sucking inflation out of monetary expansion”.
“I do think we are going to see the currency influenced inflation event that is hard for people to understand given the in a difficult conditions in the job market and with the only booming business being Wall street.”
Given his view of gold’s relationship to the dollar, Sinclair was asked about the dollar’s continued status as the reserve currency.
“We can clearly see the dollar is no longer the universal reserve currency it was back in 2000; currency values come from momentum so you don’t need heavy selling of a currency for it to decline you just need less buying.
” I would think that the dollar will always be around at whatever value the market makes for it and it will always be part of reserves but it won’t be the universal reserve currency. You have a super sovereign currency unit, which is really like the dollar index that will be part and parcel of the IMF which I believe is becoming the central bank.”
He adds that, national strength and influence socially and politically has always followed the strength of currencies and it is very clear Wall Street is no longer the financial centre of the world, Asia is rising very sharply and nations that can produce gold at reasonable prices will find out that they are actually mining money.
Jim Sinclair’s Commentary
All fall down, run away, bury your weapons and join the march of the refugees.
After the Surge, dig up your weapons and return to hit and run tactics.
When will the West realize this is the centuries old battle plan faced in Afghanistan and Iraq? The strategy is to bleed your enemy to death.
Regrouping Taliban May Widen War as Pakistan Pays Economic Toll
By James Rupert
Nov. 23 (Bloomberg) — Taliban fleeing a Pakistani offensive are regrouping in the country’s northwest, threatening to spread and prolong a conflict that has strained the nation’s economy and may hamper efforts to attract foreign investment.
While Pakistan says its month-old offensive in South Waziristan has destroyed the largest Taliban sanctuary, some militants are falling back to Orakzai, a mountain region less than 16 kilometers (10 miles) south of Peshawar, the capital of North West Frontier Province, said Talat Masood, an independent military analyst in Islamabad.
Rising violence in the region last year prompted London- based Tullow Oil Plc to give up operational control of drilling operations near Orakzai. A wider conflict may make it harder to attract companies like Mol Nyrt., Hungary’s largest oil refiner, which this month started natural gas production in the province.
“Naturally, this violence is not good for the investment climate, but the government’s decision this year to tackle the Taliban is a good one for the long term,” said Habib-ur-Rehman, who manages $48 million of stocks and bonds at Karachi-based Atlas Asset Management Ltd.
Peshawar, Pakistan’s eighth-largest city, suffered 11 major terrorist attacks this year, including a Nov. 19 suicide bombing at the main courthouse that killed 18 people. The city has a U.S. consulate and straddles the truck route for supplies from the port of Karachi to U.S. troops in landlocked Afghanistan.
Jim Sinclair’s Commentary
Please take note of the beginning of the formation of a common market on the African Continent.
I predict that after Jakaya Kikwete, the President of Tanzania, completes his terms, this shining star of Africa will lead a Euroland formation on the African continent.
His leadership will propel the African Continent into a position of wealth and respect never anticipated in the West. China knows this and are there. The West does not and is not there.
President Kikwete is the Jack Kennedy of the African Continent.
At last, Common Market becomes reality
By CATHERINE RIUNGU
Posted Monday, November 23 2009 at 00:00
The East African Community officially ushered in a common market on Friday amid renewed commitment by the region’s Heads of State to expedite the envisaged political federation by 2015.
The Common Market Protocol was finally signed in Arusha, Tanzania, bringing to an end months of waiting and anxiety.
Contentious issues nearly derailed the negotiations and the signing was pushed to this month from April.
At a colourful ceremony to mark the bloc’s 10th anniversary which coincided with the bloc’s Common Market deal, the chair of the EAC Council of Ministers, Monique Mukaruliza, urged partner states to expedite its ratification at national level by the scheduled July 1, 2010 date.
Presidents Paul Kagame of Rwanda, Mwai Kibaki (Kenya), Yoweri Museveni (Uganda), Pierre Nkurunziza (Burundi), Jakaya Kikwete (Tanzania) and Abeid Amani Karume (Zanzibar) nodded as Ms Mukaruliza said the ball was now in the nations’ court.
Jim Sinclair’s Commentary
This is what I have been telling you. The Fed capitulates to infinite Quantitive Easing or the Fed looses its grip on monetary policy.
This is the Oval Office versus Wall Street. With all power being vested in the Oval office, I would wager on the Oval Office winning.
The Fed Backed Itself into a Corner
November 22, 2009
Tim Duy
Over the years, I have warned a seemingly countless number of undergraduates that Fed’s hold on monetary independence was tenuous at best. Independence is not guaranteed by the Constitution. Congress made the Fed, and Congress can unmake the Fed. The Fed could only maintain the privilege of independence if policymakers pursued policy paths that fostered maximum, sustainable growth. Deviating from such paths would have consequences.
The Fed is quickly learning the extent of those consequences, as Congress launches an assault on the Fed’s independence.
Some find the loss of support for the Fed puzzling. Brad DeLong, for example, notes that Bernanke & Co. are doing exactly what they should have done:
First of all, from the day after the collapse of Lehman Brothers, the policies followed by the U.S. Treasury and the U.S. Federal Reserve and the U.S. administrations have been very helpful. They have been good ones. The alternative–standing back and watching the markets deal with the situation–would have gotten us a much higher unemployment rate than we have now. Credit easing by the Fed and support of the banking system by the Fed and the Treasury have significantly helped the economy: have kept things from getting much worse.
The Fed earns accolades from academics for its handling of the crisis, in particular since the Lehman failure. Fair enough; I have few quibbles with policy since last fall. But what about the years before Lehman, when the crisis was building? Where was the Fed then? Did they abdicate regulatory responsibility? How did banks develop such incredible exposure to off-balance sheet SIV’s? How could the Fed ignore increasingly predatory lending in the mortgage market? What exactly was Timothy Geithner, then president of the all important New York Fed, regulating and supervising? Clearly not Citibank (C).
Jim Sinclair’s Commentary
The Green Hornet says maybe a small fire has become a blaze?
Analysis: Fed under fire as public anger mounts
By TOM RAUM (AP)
WASHINGTON — Suddenly the Federal Reserve is everybody’s punching bag.
Strip the Fed of its bank regulation powers, some in Congress are demanding. Get probing audits of its behind-the-scenes operations, others say.
The chairman of the Federal Reserve Board is always fair game for criticism and second-guessing, usually over interest rate actions.. But this year the criticism is much broader as Congress responds to widespread public anger that the Fed bailed out Wall Street but not ordinary Americans, and with unemployment in double digits.
Former Fed Chairman William McChesney Martin Jr. famously said that the central bank’s job was to yank away the punchbowl just when everybody is starting to party. And while Fed Chairman Ben Bernanke has signaled the Fed will keep interest rates low for now, a round of higher rates inevitably will come.
The Fed finds itself both the punchbowl keeper and the punching bag.. Imagine the outcry when it does begin to crank up rates — perhaps just ahead of next year’s midterm elections.
Jim Sinclair’s Commentary
This is quite a statement as Israel and Iran tensions rise.
Iran launches war games to protect nuclear sites
Sun Nov 22, 2009 10:24am EST
TEHRAN (Reuters) – Iran’s armed forces launched large-scale air defense war games on Sunday to show off the country’s deterrence capabilities in the face of pressure from the West over its nuclear program.
The display of military muscle comes at a time of rising tension between Iran and six major powers, which fear Tehran’s nuclear program is aimed at producing nuclear weapons. Tehran denies this is the program’s purpose.
Iran’s elite Revolutionary Guards and military forces jointly started five days of maneuvers in various parts of the Islamic state, Brigadier General Ahmad Mighani said, according to state television.
“It is the biggest war game, which takes place over an area 600,000 sq km (230,000 sq miles). The aim of this war game is to promote military power of the armed forces against any attack,” the television quoted Mighani as saying.
The United States and Israel, which Iran does not recognize, say they want a diplomatic solution to the nuclear standoff, but refuse to rule out military action if diplomacy fails.
Jim Sinclair’s Commentary
Saturday in Pakistan
Pakistan publishes beneficiaries of graft amnesty
ISLAMABAD — Pakistan on Saturday published the names of thousands of people, including President Asif Zardari, who are protected from old corruption charges by an amnesty which could formally expire next week.
Former military ruler Pervez Musharraf promulgated a National Reconciliation Ordinance, commonly known as NRO, in October 2007.
Musharraf’s decree quashed corruption charges against former prime minister Benazir Bhutto, who was assassinated two months later, her husband Zardari and other politicians in an apparent gesture of reconciliation to prolong his rule.
“A total of 8,041 people benefitted from NRO, including President Zardari,” minister of state for law, Afzal Sindhu, told a news conference.
3 Suspected Militants Blow Themselves Up in Pakistani Kashmir
By SAHAR HABIB GHAZI
Published: November 21, 2009
ISLAMABAD, Pakistan — Three suspected militants blew themselves up on Saturday as police officers chased them in Pakistani-administered Kashmir, government officials said.
The police launched a hunt in Muzaffarabad, the capital of Pakistan-controlled Kashmir, after residents reported that three men had dumped a bag of weapons on a road, said a senior government official, Imtiaz Ahmed.
“As our men chased them, the suspects ran towards the mountains,” he said.
Sardar Ilyas, a senior police official, said, “They blew themselves up as we got close.”
Militants have carried out a series of bomb attacks across Pakistan in recent weeks, killing more than 300 people.
