Last Thursday I attended Jim Sinclair's "private meeting". Here's a photo of about half the audience taken from my position in the Q&A line. I'd guess there were about 2,000 in attendance.

Here's the outline of what happened from my view point:
- Meeting was scheduled from 2:00PM to 5:00PM.
- I arrived at 1:30PM. Sinclair was in sitting the front with a microphone. 20 people were lined up waiting their turn to ask a question.
- The guy sitting next to me said this started at 12:30 and had been going non-stop.
- No change and no breaks until after I got my question in right at 5:00PM (after waiting in line an hour) and nearly missing my train home.
- Who knows how long it continued after I headed for the train station.
- It only cost $40. I'm convinced the guy is quite sincere in his statements that the purpose for his web site and one of the main activities of his life is to help his readers and stockholders.
I came away with no revelations, but with some real clarifications of how Mr. Sinclair sees things. What follows is my topical synthesis of the individual Q & A notes I took. These are paraphrases of what I heard, not verbatim quotes based on transcribed recordings. In the 10 minutes it takes you to read this you can glean nearly all I got from a 18 hour investment of time. I'm going to put in bold print anything significant that I had not previously gotten from reading Sinclair's web site.
THE SYSTEM:
Q: Who are these people who you describe controlling things and making the decisions about the end-game and manipulating interest rates and prices and the system? Are they shadowy people or groups behind the scenes or the big names you see in the headlines?
A: Its the big names you see in the headlines, Goldman Sachs people, J.P. Morgan...
Q: Is the entire system a ponzi scheme?
A: Its like Sodom and Gomorrah but Sodom and Gomorrah were a lot more fun.
We've fallen deeply as far as morality is concerned. Its unsustainable. There will eventually be a move back to morality. Finance today is a criminal enterprise. I'd be horrified if one of my children were to go into finance.
Q: Will the gap between the rich and the middle-class narrow?
A: The wealth of these insiders is humonguous. I know these people and was their partner. I wouldn't want to be them. They won't stop till they die.
Q: How do we get rid of the banksters?
A: The only way to do this is to shrink their profit margins, but its not going to happen. We are stuck with these guys until they die. You have to protect yourself until then.
Q: The Bankers control the federal reserve. Now they are trying to control China. When are they ever going to lose their grip?
A: They are becoming fat and lazy and although they are geniuses, subsequent generations revert to the mean. They wanted to be billionaires and find they are trillionaires. The Chinese and the Russians won't let them take over their countries. The BRICs will take over. The BRICs execute bankers. What they are doing is unsustainable. They'll never get the one, universal-currency under their control that they seek.
NOTE: Over the counter derivatives cannot be cleared because each contract is different.
GEOPOLITICAL:
Q: Is the Bankster controlled west going to attack Iran?
A: War costs big money. Without a real recovery its too hard to do an Iran attack. Its not attractive to them today.
Q: Why is China buying so much gold (100 tonnes/month)?
A: Because they are going to be the ones making the rules.
Q: Saudi Arabia?
A: Its waning. All they do is buy people off.
QE:
NOTE: There is no other tool that QE, so it will continue to be used.
Q: With their currently policies they are risking the entire
Federal Reserve system which is the basis for all their influence. Why
are they risking it?
A: They (especially Bernanke) don't think QE
will go to infinity. The expect a large, sustained increase in business
activity that will allow the economy to grow its way out of QE and the
rising debt. They (he) are surprised there has not been a robust
recovery, but Sinclair does not expect one.
Q: The financial press is talking about the timing for when QE will be rolled back. If they "printed money" has already been blown onf welfare and defnese, how will they pull the money back?
A: Its either more QE or a large, sustained increase in business activity.
Q: QE has been supporting the bond market. When will the bond market break?
A: Its not going to break because QE is going to infinity. You can only break the bond market when its major buyer, the Federal Reserve, stops buying. You can watch the bond market for clues to when QE is waxing and waning.
US DOLLAR:
Q: You've called for the US Dollar to fall but its been rising.
A: The Euro will out-perform the US Dollar because they are already biting the bullet and doing austerity while the USA has gotten close to starting austerity.
Q: How long can the US keep a monopoly with the USD as the means of setting the price of commodities.
A: This is already change and its very important. The monoploy the US dollar has as the means of settling international transactions is crucial to the support and the major fundamental factor for a dropping US dollar is the falling market share it has for the settlement of international transactions.
China plans a century ahead. They aren't going to stop buying gold. They are going from gold being 2% of foreign reserves to 15% of foreign reserves although part of this increase will be due to a rise in the price of gold.
END-GAME:
NOTE: Gold will balance the central bank balance sheet. To balance the current balance sheet would be a very large number, but before that time liabilities will be written off.
NOTE: The end of this is in the 2020 to 2021 timeframe.
Q: When is the tipping point to the end-game?
A: We have already tipped, but don't stop your life. Instead, be ready to duck. The hyperinflation/collapse is a 3 month event.
Q: Why is the veolcity of money not rising?
A: Confidence in a currency is tied to the value of the currency. When confidence is lost you inflation and a rising velocity of money.
Q: What are the ultimate numbers for gold?
A: Anything above $4500/oz given current debt levels, etc. has gold overvalued and gold is a sale at such a price. Anything under $3100 leaves gold undervalued and a buy.
NOTE: In my life, I have one job left to do. That is notifying CIGAs (my readers) when gold becomes overvalued.
CONFISCACTION:
Q: What about another round of confiscation of gold:
A: Confiscation happen in the 1930s so that they could do QE. They needed the gold and the ability tos et the price of gold to increase the money supply. Today they don't need to confiscate gold to do QE.
Q: What about punitive windfall taxes on gold profits.
A: I can say about taxes because they are taxing everyone.
PAPER VS PHYSICAL GOLD:
NOTE: The change in the paper gold price over the last two weeks (when gold stopped falling) was driven by the physical market.
NOTE: As long as the price of gold is made in the paper markets the supply is unlimited. You can't corner a paper market.
SILVER:
NOTE: Silver will rise, but it isn't a monetary metal.
Q: What will the ultimate gold/silver ratio be?
A: The gold/siver ratio is not predictive. Silver above $50/oz makes me uneasy. I was there when they took down the Hunt brothers, remember?
PHYSICAL GOLD:
NOTE: The managers of storage companies are not saints and the temptation is great. The gold community will see great scandals in the area of physical storage wrong-doing.
Q: Is PSLV (Sprott's Physical Gold Trust) as safe as gold in a safe-deposit box.
A: No. Sprott won't steal it, but no security is as safe as holding physical.
Q: What's your favorite security as a means of holding gold?
A: Central fund of Canada.
Q: What do you make of the Perth Mint for gold storage?
A: The cost of going from unallocated to allocated gold is too high.
Q: Gata claims that the US treasury and too-big-to-fail banks are tyring to suppress the price of gold.
A: Yes, that's their job. Proof of this is huge price drops during times of low liquidity. But the physical market trumps this manipulation. The transition from a manipulatable paper market to the physical market setting the price is underway. The Russian buying of physical gold has and will increase because to the Cyprus situation. Sprott has proved that thhe treasury does not have all its gold.
THE BOTTOM TO RECENTLY FALLING GOLD PRICE:
Q: What's the trigger for the next big up-move for gold?
A: A close about $1613.20.
NOTE: The hedge funds were informed that the fix was in to steal deposits as a way of phasing out QE. The events in Cyprus nullify that. QE is the only tool and gold will rise. Yes, its that simple.
Q: What happened when gold recently rose to $1764 and then fell off down into the $1500s?
A: That was when the funds were gold that the bail outs would go to bail-ins where depositor money would be confiscated as a way of avoiding further QE. That game is over now.
NOTE: If Sinclair goes completely silent... That means something big has happened and its time to sell.
GOLD MINING STOCKS:
Q: Do you like the miners?
A: Yes, they are just so oversold and so undervalued. Sinclair especially likes and admires Rob McEwan partly because so much of his personal wealth is invested in his company.
Q: Won't gold mining companies be nationalized?
A: Only if companies are greedy and don't share with governments.
Q: Precious metal stocks... In 2006 Newmonth was a 40$ stock that earned $1.20/share. Now its a 40$ stock that earns 4$ / share. Why has the price moved up with earnings?
A:
- Newmont should double its dividend and slash its expenses.
- There's been a huge headwind of hedge funds shorting gold miners with the expectiona that costs will rise faster than the price of gold.
- The management of gold companies is completely self-serving. They should be serving the share holder.Management of gold stocks stink.
- Mining is hard, ghosh darn it. Only people who like pain would do it.
TRADING:
- Sell Gold when you see a Rhino horn on the weekly chart. Buy gold when you see a fishing line on the weekly chart.
- Cycles - Sinclair doesn't buy exact cycle theories, but uses them to detect divergences of a market from ordinary seasonal variation as a clue to trend changes.
IRAS:
You must have an exit-plan for 2015. With IRAs you have 3 years at the most, maybe 2 years.
Q: I'm a 59 year old guy. Should I take the tax hit that comes with taking my money out of an IRA, even a physical gold IRA.
A: Sinclair's answer is basically, yes... take the tax hit.
NOTE: Should the government stop being able to do QE, that's when they'll confiscate IRAs, pensions and other retirement savings.
TANZANIAN ROYALTY:
NOTE: I wanted the most gold I could get with no change of a margin call. That's whhy I go into a mining exploartion company. I've got my gold out of North America in Africa. I've helped out the Tanazanian government enough and have shaped the deal with generous sharing of the governement so I don't expect any kind of mine nationalization as there has never been a profitable nationalized mine.
Tanzanian Royalty has four surface project ready to go that are too valuable to give away. Sinclair is striving to get them into production as soon as possible using contract miners. He won't dilute the stock but will find a way to finance the projects using a portion of the produced gold.
Hope you found this helpful,
MontyHigh, www.worldofwallstreet.us
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