FarageWith an official US debt default growing closer by the hour, Jim Sinclair has sent yet another email alert to subscribers warning them to hold on to their gold bullion, and to get out of the banking system NOW.
Sinclair states that gold is a unique currency that becomes money when fiat money fails, and that hyperinflation is a currency event (based on a sudden lack of confidence in a currency), and not an economic event.
Sinclair urges precious metals investors to hold onto their gold, get out of the system, and scramble to the high-ground of physical gold to avoid the coming global financial tsunami.
Sinclair’s full MUST READ alert is below:

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Gold Maple
From Jim Sinclair:

Gold is a unique currency.
Gold becomes money when money fails.
Gold is competition with fiat currency.
Gold is not a commodity
Gold is a barometer of fear.
Attempts to break the barometer in order to avoid fear are futile both in trying to hold the value of gold down as well as preventing fear.
Gold is a barometer of confidence in government’s functionality
Gold is insurance. Trading your insurance is dangerous because when you need your insurance it will out-price itself immediately by hundreds or thousands of other currency units.

 

Inflation equals money squared. Hyperinflation is a currency event, not an economic event.

 

Gold is the financial high-ground when a Global Tsunami hits, such as sovereign default or the real threat thereof.

 

Gold in your hand eliminates counter-party risks.
Gold in hand removes financial agents between you and your assets.
Gold ETFs defeat the definition and purpose of gold and are therefore poor choices for the gold investor.

 

Claims on paper gold by ETFs far exceed anything that the true cash physical spot market could EVER provide.

 

Velocity of money represents attitude of all consumer types from business to household.
Velocity of money would spike when confidence in a currency is lost in terms of that currency.

 

There is no practical way to drain debt from the fragile economic recovery therefore QE must go to infinity.

 

Margin in gold is a financial death wish.

 

A weak currency is a symptom of Inflation in Monetary Aggregates.

 

The price of gold has many enemies, but the most seditionist are those who claim to be friends of gold – the majority of those authorities that write on gold.

 

Hold your gold and get out of the system.

 

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    • Yes, NO DEFAULT. No way, no how, NOT FROM THIS! 
      A Crash will default the U$D, but not this silly political theater.
      The Repubix know “O” is full of donkey-doo-doo, and they are right about this one. 
      Blind Hog / Acorn Conundrum…

    • If the US Gov were to default in 2013, it would not be the first time that this has happened.  If the dollar collapses, well, it won’t be the first time for that either!  Nothing new here, folks.  Nothing to see.  Move along… move along.
       

    • @ed_b If the US would default in 2013 it would be new, because it would be the first time they did so willingly. The previous times they had to because they were on a gold standard. Now it’s pure fiat so they can technically not default if they decide not to. I hate the likes of Mike Norman, but he’s right about that even though (I think) he’s wrong about the consequences of endless printing.

    • @widget
       
      According to info I found on the web, the US has defaulted on its debt twice in its history.  Once in 1790 and again in 1933.  See the following URL for additional info:
       

      http://usgovinfo.about.com/od/moneymatters/a/Has-US-Ever-Defaulted-On-Its-Debt.htm

       
      Yes, they can zap fresh currency up out of thin air these days but the beauty of the gold standard was that it inhibited government from spending more than it had on a routine basis.  Fiat currency not only does not inhibit that tendency, it promotes it… as we’ve seen.
       
      Endless printing WILL be a severe problem.  It has been in every other place that has tried it and the US is not immune to the consequences of poor fiscal and monetary policy.  What some people miss is that the US economy is so large that bad policies can be papered over and delayed for years before the effects of those policies become obvious.  Like any other problem that is deferred until a future date, it only tends to get bigger and more difficult to solve.
       

    • @ed_b Thanks for the link. I did not say the US has not defaulted. I said it were not able to pay back the debt in monopoly money previously so they had to. The dollar was backed by something both in 1790 and 1933. It defaulted in 1971 too. The 1790 debt was payed back by the way, “only” at a later time.
      Now it can issue debt and pay the coupon into infinity, so if they default now it will be simply because they chose to. It cannot be forced. In that sense it would be a first. You know what I’m saying. I’m saying those who claim that the US MUST default “soon” or “some time” are technically wrong.
       
      Of course it will cause severe problems anyway… it will destroy the value of the currency. We all agree on that (well, perhaps not Mike Norman, and even if he does he still claims it is GREAT, causing the people to be WEALTHIER because they are owed more money(!) and that it will cause production/services to grow with it)

      EDIT: I’m also not saying that the US wont default. It can if it wants.

    • “The 1790 debt was payed back by the way, “only” at a later time.”
       
      So, would you consider that as a default?  Comments I have heard on TV & radio and read on-line seem to go both ways on this.  One comment was that it was “technically” a default, so apparently that person thought that it could go both ways at the same time.  I’m thinking that a delay in payment is a default.  It’s good that the debt was eventually paid but people who were counting on receiving a timely repayment on the debt could be damaged, such as by not being able to fulfill any contractual agreements they might have made by assuming that they would have X amount of money on a certain date, by not receiving their payments on time and in full.
       
      “Now it can issue debt and pay the coupon into infinity, so if they default now it will be simply because they chose to.”
       
      I understand your reasoning and mostly agree.  Yes, they can issue more debt but that does not guarantee that they will find anyone to buy it.  The Fed has been buying a lot of the recent debt issued by the US Gov, basically as a buyer of last resort.  This does not bode well for the US in the longer term.  What would bode well for the US would be having a Gov that can live within its income and even pay down its debt on a schedule over time.  It could take 50 years or more to do this but it won’t happen as long as people fail to understand money, debt, and interest rates to the extent that they do.
       
      Mike Norman is an interesting fellow.  He will say things that make perfect sense and then comes something that is so far off the wall that it is difficult to believe that it was said by the same person.  Maybe he needs to start taking lithium?
       
      “Of course it will cause severe problems anyway… it will destroy the value of the currency. We all agree on that…”
       
      Indeed it will.  All of us who understand money, debt, banking, and interest rates recognize runaway spending and the debt that results as a primary cause of currency over-printing, loss of faith in a currency, and its eventual collapse.  Zimbabwe still prints their dollar and it has a technical equivalence with US dollars at about a 3600:1 exchange rate, IIRC.  Thing is, despite the exchange rate, almost no one, even in Zimbabwe, uses their currency.  I’ve read a lot of comments from people who have been there or know someone who has and they all say the same thing about it:  US dollars, EU euros, and gold are all that anyone accepts there for payment.  I don’t know about silver.  That might be acceptable as well but I haven’t read any comments to that effect.
       
      Thanks for the link to the ZH article.  I tried to read that but my browser came back with a “this web site is not available” error message.  I will try again later.  I have a lot of respect for Jim Grant.  He’s a very smart guy who must be absolutely horrified and disgusted by the DC financial and economic circus that is playing out these days. 
       

  1. Guys… look at the daily close price of silver from September 17th. Does it not look weirdly centered around 21.75? Smash premonition?
    EDIT: Last year they turned on the bashing algo on October 11-12th. Repeat this year?

  2. Gold becomes money when money fails.
    Gold is competition with fiat currency.
    I always thought Gold was money, not becomes. The 2nd line should read, fiat currency tries  to compete with Gold. Lol Keep Stacking

    • The 2nd line should read, fiat currency tries  to compete with Gold.”
       
      Yep… and we can add to that, “…and it fails miserably every single time“.  ;-)

    • Nice! 
      Kerry is a dumb@$$ loser, POS politician and traitor. 
      Too bad those POS gun grabbers will not be going house 
      to house to get the guns they want, but will try and recruit 
      young men to do the dirty work, and get shot at, etc. Grrr

    • That guy shouldn’t hold back like that.  He ought to cut loose and tell us how he REALLY feels!  lol
       

      @AGXIIK

      Forget the avatar, AG, upgrade your rifles! That was a sweet mag burn. One can only imagine the damage on the receiving end of that. :-)

    • Holy Shiite! If this guy is even mildly representative of the views of the armed American people, then they are going to have to rethink their game plan! Geeeeeeeeeeeeeeeeeeeeezus! Tell me where this guy lives so I don’t go there by mistake!

  3. The article was sent to subsribers days ago.  It is my hope that all SilverDoctors patrons are subscribers to JSMineset.  It does not cost anything.  Now, this site is losing relevance.  Everything that Mr Sinclair is doing now actually is meant to help those that have some assets.  Most of us have very little assets or if we do have a little it is already invested in silver or gold.  Mr Sinclair no longer sings from the roof tops that gold will rise to 3500.  Why?  Cause he is wrong for doing so.  He has no idea when this will happen.  It could be years from now.  The whole damn subject now is just trying to decide on a strategy for preserving what we already have.  Mr Sinclair has hurt many.  Many like myself listened to him and invested savings in gold and silver only to see the value of the assets sink to unheard of levels.  I haven’t heard him admit that he has caused damage.  He has.  Mr Sinclair has a huge ego.  He now continues to try and do damage control with his new project of Get of the System talk.  In the long run he may be right.  For now he has been a failure.  I believe that Mr Sinclair is a good man.  He knows that he is losing for the time being and he has really cause a lot of damage with a lot of good people.  Hopefully he will be right in the long run.

    • Sinclair has hurt no one.  You made the decisions to do what you wanted to do.  Quit whinning and blaming others for a decision you made for yourself.  Besides, unless you sell your PMs at a loss, you have not taken a loss.  Do you think you would be better off with fiat?

    • All sinclair did was call the gold price 10 years in advance. There are lots of prognosticators out there and you pay your money and take your chances. In Sinclairs case you paid nothing. I agree with hromano, quit your whinning. Lots of things have caved in value which sinclair had nothing to do with…..perhaps like most he was somewhat naive in what this sick system was/is capable of, as they are not done yet by a long shot….other than that, Man Up dude and live with the cards dealt you, like we are all doing…..

    • Sinclair called $1650, when nobody was in this sector. You are wrong that he has “hurt people” in any way. If people haven’t sold, they have not lost a dime. Don’t confuse price vs value. Gold and silver are hugely undervalued right now. They will have their day in the sun.
       
      So cost average in, keep stacking or get out and find something else to invest or save in. Good luck to you.

    • @Pollokeeper
       
      I’m sorry that you have “lost money” in your gold and / or silver purchases.  But I have to agree with the sentiment here that this was your decision to make, you made it, and now need to make the best of it.  
       
      Investing has a number of basic rules and you violated some of them.  One of the biggies is to diversify your holdings.  Another is to dollar cost average into a position over time.  You seem not to have done either of these.  These rules can always be violated but we then must pay the consequences of that violation.  
       
      Like others, I bought silver when it was higher in price than it is now.  I am unconcerned about this, however, and continue to buy as I can.  My average price per ounce is declining as more cheap silver is added to the stack.  I just got word that my most recent order of 250 silver Maples has shipped, so should arrive in 2-3 days.  I got these at $24.04 each, which is comfortably below my former average cost of about $30 an oz.  I have no plans to sell my silver or gold any time soon.  These are financial insurance.  These are money.  These are a long-term store of value.  These are not a trade.  These are not my only savings.  I am diversified in other assets.  
       
      Having cash is a good thing, as it serves as a cushion against having to sell PMs when their prices are down.  If also gives me the chance to stack more.  I truly feel for those who went “all in” with their retirement money when PM prices were higher and now have to sell some of their stash at today’s low prices to pay their retirement living expenses.  This is a hard lesson but it is one that is not unknown.
       
      I am sometimes ridiculed for my stance on investing and owning mere “paper” but that does not concern me.  I have made a considerable amount of money via paper, mostly via long-term investments but also some via trading.  I much prefer investing to trading but it is possible to make money with both.  I do what I believe is right for me and use my money to do it.  Others may or may not make similar choices and that is their decision to make.  All I know is that the methods I use have worked very well in the past and may or may not work well in the future.  If they do, then they will continue to produce income for me.  If not, well, that’s why I have about 8% of my money in PMs.  I am raising this over time but it is a slow process.  I am withdrawing additional IRA money each year in an effort to build a larger stack while not getting gang-raped by the IRS, as would happen if I were to withdraw all of it quickly.  In January, I can take another $30k withdrawal for additional PM purchases.  These will be spread out over time, as usual.
       
       

    • @Pollokeeper I’m with. Funny how some (many) refuse to make admit failure. The excuses simply do not hold up to scrutiny. I’m not going to get into the details and logical fallacies because those concerned simply wont hear it (if they where willing they would have figured it out by now even without assistance for that matter). I’m beginning to think the “truth movement” is suffering from as much confirmation bias as for example Paul Krugman.
       
      Maybe Sinclair believed in what he said. Maybe he was just trying to pump his failing company like so many other King World News “prognosticators”. Maybe both.
      But frankly I don’t care if Sinclair believes in his own words or not. He still gave VERY poor advice shouting from the roof-tops to “get out of the system” (which for everyone who says “you should not have put all your money in gold” I just want to state that Sinclair made it very clear that that’s what he meant by it) and called the bottom at $1600 claiming it would never ever be seen below that again.
       
      Lastly, I’m writing this for the people who have an open mind and want to be in touch with reality (and show you’re not alone), not to those who will say nothing they have done could possibly have been sub-optimal even in hindsight. All we (I and @pollokeeper) ask is for people like Sinclair to be honest (like saying up front and in advance that he based his bottom call this spring ON HIS FUCKING BIRTHDAY DATE) and show some empathy when those who followed his advice got squashed.

    • To profit one must be correct on the move AND correct on the timing.  Very difficult to nail them both.  Thus, Jesse Livermore’s axiom, “Be right and sit tight.”  You know you’re right.  Fiat currency is nothing but a pyramid scheme on the cusp of collapse.  The math demands it.  So, kick back and sit tight.  Enjoy.  You’re success is a lock.

    • The ONLY real problems anyone can have (AFAIK) with buying PMs is to invest up to a point that 
      one’s personal finances are affected, and then need to liquidate at a loss… I pity anyone in that situation, 
      but the key is to invest only what can be comfortably set aside, or soon replaced. It is my humble hope and 
      prayer that 3 things happen (or do not happen, be as it may!) 
      1. That Silver does not go below my average purchase price (probably around $17-18/oz) I DCA’ed all the way up to $40 though!
      2. I do not fall upon hard times and need to liquidate, especially below a critical level. ($30?) 
      3. The system holds out long enough for me to achieve my stacking goals  ;)

  4. I wish SD would get some stories about BRICS and any alliances with (formerly 3rd world) “non aligned nations.” The whole Basel 3 story is hard to track as well. There are many “leaders” going to many conferences right now and I want to hear what goes on. The talked about global reset is rumor. But certain currencies may rise while some will fall. Golden $100 bills mean nothing to me unless there is an asset behind it besides my sweat. If the Yuan becomes the de facto reserve currency then dollar wise the PMs will rise. Yet if certain currencies rise and many fall what will Silver be denominated in? Silver never really changes its value. Currencies change. So with buddy Sinclair saying it will be worth such and such, what will the such and suches be? Manipulation on the part of China has never been examined. Much can be reported upon outside of our favorite authors. The Yellowstone piece particularily galled me. Rumor mill news has lots of goodies I am sure but I want to hear not just about U.S. silver I want to hear about World Wide Silver and world wide players.

    • I agree.  It would be good to get more international news items, although I can also understand the difficulty inherent in getting such information and verifying it.  The info that SD members and contributors bring us is excellent.  The bank closure in Panama was something that concerned many of us, so it was good to get a “man on the street” look at it from Pollokeeper.  We still may not have the full story on all that was in this, as it may time some time to sort out, but it is good to know what the people in Panama were talking about and doing.
       
      Asia is a raging PM market, so one would think that news from Singapore, Hong Kong, Japan, and Australia would be really good to have.  We do see stories from these places occasionally but given the amount of PM buying and selling in Asia, one would think that there would be a HUGE amount of news about it in their local newspapers.  Any of them that are printed on-line in English would be good to follow, if they report such things over there.
       

  5. And hey… http://www.theguardian.com/business/2013/oct/08/new-100-dollar-bill-design-security-forge
    Wasn’t this new 100 bill supposed to be backed by gold? Wasn’t the whole monetary system going to change to a new gold standard with this release? Ooops… I guess Jim Willie was wrong. I AM SURE he will come right out and say this in his next newsletter, along all the rest of the crazy crap he makes up that never materialize. Because all he cares about is your financial health, right?

    • You may very well be right. I have a tendency to mix up Jim, Bix and Turd. Don’t they usually tout each others stuff?
      I have a really hard time with all these “secret sources”.

    • Crazy crap? You obviously haven’t read Willie for very long. Not perfect by any means but he has nailed a lot of big stories over the years.
       
      What have you done to inform and help others Mr. Bigshot?

    • @bay-of-pigs I recommended a dear friend to “stack gold” at $1750 for one. Feel truly horrible about that. Luckily nobody else has followed my advice. Almost sold my boss 100 oz silver at $40 (just when it was about to explode to the moooon).
      I admit I do not read Jim Willie, but I listen to his appearances now and then. Like I said, I may have confused him with someone else.

  6. Sorry Charlie is  Marchas 45, the director and producer of the Silver Recline Report. You  can usually catch him on this channel, attires  in Tam, red fright wig, sitting back in his recliner, opining on the situation re silver and repeating the mantra, stack it

  7. 62 grain 5.56 green tip penetrators  Got Hillbilly Cialis
    M4   3 of them—one with slide stock   Got
    80 mags for same  Got
    WASR 7.62  Got  
    60 mags for same   Got
    SKS Paratrooper D   Got
    3 mags for same—-aw crap   dont gots enuf
    Off to the gun  show Saturday to git more   Any excuse to go to the gun show whoo hoo
    Has anyone seen the new Tavor 5.56 Bullpup?
      Israeli made 
    (Hear that Proverbs 1616 —git you one—(THAT’S AN ORDER!!)
    I don’t gots no ATF approved   full auto weaponry cuz’ the party animal* bureaucraZy has too many rules. The Slide Stock is nearly as good.  One 30 round  mag full of 223  goes down range in 2.5 second. Modulation is possible with practice
    *ATF Alcohol Tobacco and Firearms. If that isn’t a party to all ya’ll, ya’ll ain’t got no sense of humor. So fukitall it.
     

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