The legendary Jim Sinclair has just sent the following email alert to subscribers stating that we are currently witnessing the death throes of all fiat currencies, and that gold seems to recognize the fact.
Sinclair states that the sentiment on the Euro is now so overcrowded to the bearish side that it might as well be one-sided, and that the US dollar’s problems will overshadow those of the Euro in the not too distant future- much to the surprise of the ‘professionals’, but not to SD readers.
From Jim Sinclair:
Majority Opinion Is Not Always Correct
One thing I am sure of is that the majority opinion on the destiny of the euro is wrong. The bear position is so crowded it may as well be one sided.
Sure, that type of trading will continue to put pressure on but it all will go splat after the fact. Yes that type of position reflects its mirror image on the dollar and could make the present bullish near term price objective real, but for a moment only.
Gold seems to recognize that we are witnessing the death throes of all fiat currencies inherent in this transition of the euro.
The unexpected is in fact happening. Sovereign insolvency resulting in debt repudiation was thought to be a part of history in Zimbabwe only. It is not.
It is a clear and present danger to the largest debtor nation on the planet, the US dollar. The problems with the dollar will make Greece look like child’s play.
Once the euro circus, which seems traditional, comes to its dead end a change will occur. At or slightly ahead of that time the short of the euro is going to get crushed. The firm dollar is no longer a factor in the gold price as the death of fiat currency overcomes the temporary mirror image of the euro the dollar is.
I feel from the time of the event we will see a much higher euro and weaker dollar that may well prevail for years.
Stay the course. We are totally correct.
Enjoy your weekend.