I stayed thru Jim's opening remarks (at least half an hour) and the pitch from the gold bullion sales-man. I did not stay for the Q&A. Jim looked healthy. The crowd was good (at least 200 probably more), upbeat, all white and mostly middle aged. Nobody was angry. There were a few way-out-of-the mainstream folks pitching their own ideological, political efforts.
These notes are only slightly better organized than when I took them. They are not verbatim but are pretty much thought-for-thought.
A 40-yar cycle is coming up for the US. Its band for the dollar, even this month, as international acceptance of the dollar wanes. A Chinese offician recently called for a global Deamericanization. Chinese officials do not make off-hand remarkes. What the Chinese are talking about is the dollar as the predominent reserve currency. The gold and silver markets are small enough to be manipulated by the Bullion-Banks and the G-Man pals, but the currency markets are a different matter. From now on its all about the dollar. They will not be able to maintain, internationally, the "everything is ok" perception. There is an unwind of the dollar coming.
The recent gold take down (presumably into the $1200s) was different in that this time it was bought. As long as the Chinese like the price of gold it will be supported. The current price of gold is about the price where the Chinese were shut-out and the IMF sold its gold to India.
Deamericanization means a fully convertible Chinese currency (remimbi) in less than five years. Petroleum will no longer be sold just in dollars. Soon (my notes say 2 years, but I'm not sure about that), petroleum will be sold in whatever regional currency is convenient, unlike the current Petro-Dollar situation where it was only sold in US dollars (in fact nearly all international contract payments were denominated in US dollars. The Chinese recently bought to JP Morgan building to hedge out their dollar holdings. The Chinese are not trapped into the dollar. They are not locked into their dollar position.
The 40-year cycle says a definitive change is coming. Something new is the US government inability to govern. Ungovernable means no compromise or middle ground. Riots in the street have not yet occurred in the USA, but they soon might. Its telling that the adminstration will negotiate with Iran but not with the Republicans. The recent government shutdown was the Tea-Party's last chance to negotiate and its not over yet.
From a European or Asian perspective, this in ability to govern and the repeated threatened and actual shutdowns results in a loss of confidence.
Draghi recently spoke about gold indicating its not something you sell. Its protection against violent movements in the dollar he intimated. The US dollar risk of significant volatility and gold itself has just suffered its first big volatility movement.
Side note: We are in dictatorial markets. You cannot win trading gold without being an insider. Back in the 70s the big boys who owned the futures market definitely manipulated them and Sinclair did it himself in the gold market. But the Morgans and Goldman Sachs of today are worse. They ones who run these institutions are totally selfish. They don't even care about the firms they work for. All that matters who can be the biggest gamer and extract the most loot out of the suckers. That's what leads to advancement in the firms.
Deamericanization is the most important thing that has changed recently. This week (after the government shutdown ended) the dollar went down. It "should" have gone up, but it didn't that the key data point showing that things have changed.
Side Note: John William's shadowstats show current government statistics are just a big distortion to help out the status quo. There has been at best a bottoming since the global financial crisis with just an incremental move off the bottom.
Side Note: There is no debt ceiling. Instead the government can borrow as much as it wants up until a Feb 7, 2014 deadline.
GET OUT OF THE SYSTEM NOW:
There's a bill, HR4646, where all banking transactions will be taxed 1%. This is the first step towards a wealth tax. Christine Legarde, head of the IMF, has already called for a 15% wealth tax on all bank deposits. She's the one who called for the nationalization of all Cypriot retirement funds. HR4646 also provides for all social security payments to go via direct deposit thereby requiring virtually every citizen to maintain a bank account.
In Cyprus 87% of a depositor's money was lost by the bail-in. Draghi, in the same talk mentioned above at Harvard, also called for the "postponement" of bank bail-ins. Thhe term "post-ponement" implies that its definitely coming sooner or later. A failed "stress test" will be enough to force a "bail-in" and loss of depositor money. The Cyprus depositors money was actually lost years before their bail-in. It just that the loss was realized when the bail-in happened.
Its the same situation with the too-big-to-fail USA and European banks. Mark-to-model in 2009 did not make the losses disappear. As long as there is no run on the bank the losses need not be realized. Still, their derivative positions are humonguous and the bullion banks (JP Morgan and the like) have the biggest of these derivative positions. Derivatives are currently valued on bank balance sheets on a mark-to-delivery basis, but what if there are defaults. The counter parties have virtually no reserves set aside to cover their derivative losses.
Russia in the last month or so confiscated all retirement funds. Poland did the same and gave nothing back in return. So, it makes sense to "Get Out Of The System Now".
Most retirement accounts are based on the idea that your taxes will be lower when you take the money out of the retirement accounts. How did that work out for the French with the Hollande election. For the USA, taxes will simply have to rise because of government spending and deficits. Sinclair recommends paying taxes now, not later. At least don't add to these tax-deferred retirement savings plans.
Look at social security. The country's biggest retirement plan "has" to hold nothing but US government bonds. Mandatory government bond holdings is coming to private retirement savings as well. Its a fact that the Chinese and Japanese have reduced their US bond buying. The Chinese are not forced to buy US bonds. They (and India) are moving to consumer economies. Those billions of emerging consumers is enough to keep their economies growing. They don't require a continuous high-export growth-based economic model.
They really aren't developing nations any more. They are growing both in terms of geopolitical influence and militarily. China seeks world dominance. Not by military conquest of geography, but by ownership. Tanzania is "owned" by China.
Gold is for saving. Fiat is for financial transactions.
THE EMANCIPATION OF GOLD
Sinclair knew the Hunt brothers personally. They never intended to corner the silver market by taking delivery. They just screwed up the paper work and were 3 days late in rolling over their silver contracts so it looked like they wanted delivery. But the Comex gold vaults are getting to the point where, like if the Hunt brothers had demanded delivery, they just can't deliver. They are going to have to resort to cash or GLD share delivery. Then gold will be a cash-only market (no futures) and that kind of market can't be manipulated like a paper futures market because you have to actually deliver the physical metal. Its going to be just like the emerging Russia and Singapore gold markets that have just spot delivery. Victor Lu in Singapore is setting up that kind of market because he knows its what's going to make money next. The emancipation of physical from futures is coming. The big bullion banks are probably using the latest gold price knock downs so they can corner physical gold and so they are likely to be the big winners of the emancipation of physical.
Velocity of money - in order for there to be inflation you need increasing velocity of money which we don't have now. That's part of the reason for current gold price weakness.
But, hyperinflation is not an economic event. It a currency even where the currency loses confidence. A currency event is coming to the US dollar, but not yet.
The Plunge-Protection Team (PPT) is a reality. Just look at how stable the markets were during the government shutdown. Remember that meeting of the president with the bankers when the shutdonw was immiment. That's where they agreed upon their plan.
But its the dollar that is what really counts to maintaining the status quo. What the bankster and government status quo really care about is the dollar, specifically the petro-dollar. Look at what has happened militarily/stability-wise to oil producers moving away from selling oil in dollars: Libya, Iraq, ... But the dollar is already losing that monopoloty as the euro is now getting used for the purchase of petroleum and other international contracts. Why the euro? Its the only current dollar alternative.
The bottom for goldd was August, Sinclair thinks (not as cocky as earlier this year). Going forward we are going to have to deal with volatility. Gold is for savings. Sinclair recommend trading about 1/3 of your account and selling 1/3 whenever gold looks like a rhino horn on the monthly chart and buying whenever it looks like a fishing line on the monthly chart.
Gold mining stocks. Listen to Mike Martin (never heard of him). Good mining stocks must have cash, production or a clear path to production with a defensibly low cost of production.
Well, that's what I heard. Did I leave anything out?