The Fourth Day Of The World Economic Forum In DavosLegendary gold trader Jim Sinclair has sent another email alert to subscribers this weekend, warning that the economy is decelerating throughout the entire Western world, and that the Obama administration attempting to send Summers to the rescue is inflationary, and the result will be gold trading at and above $3,500/oz!
Sinclair’s full alert is below:

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From JS Mineset:


The “Accelator Law of Economics” is if an economy is not accelerating at an accelerating rate, that economy is really decelerating. This is the case in the entire Western World.


The Administration is sending Summers to the rescue, and it is inflationary.


The “Great Rotation” mentioned here is what we know will be the “Great Leveling.”


Gold will trade at and above $3500.


BofA: If The American Economy Doesn’t Accelerate Soon, It NEVER Will 

Matthew Boesler Sep. 13, 2013, 9:20 AM


BofA Merrill Lynch chief investment strategist Michael Hartnett – the one who coined the term “Great Rotation” – takes a gloomy view of the future in his latest note to clients:


The Next 5 Years: Curb Your Enthusiasm


Significant monetary stimulus, the end of fiscal austerity, a booming housing market, a cheap dollar, record corporate cash balances…if the US economy does not significantly accelerate in coming quarters, it never will. We assume it will, and favor assets (e.g. equities), sectors (e.g. banks) and markets (e.g. Europe) that have lagged in the “High Liquidity-Low Growth” world of recent years.


Asset price will not do as well in the next 5 years, no matter what the “nouveau bulls” say. Central banks will be less generous, corporations less selfish. And when excess liquidity is removed it will get “CRASHy”. The dollar and (temporarily) volatility will be the last assets to surge as Deleveraging ends and an era of Normalization begins.


In short, don’t expect stocks to go on an awesome tear over the next few years as they have in the past few years, beware of a market crash, and watch developments in the U.S. economy closely.



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  1. Essentially, any central banker is going to be inflationary.  Central Bankers don’t eliminate money.  They print it, pure and simple.  Sinclair is right, though.  Summers would be about as inflationary as they come.  Obama and Summers will be printing up wars and health care like there’s no tomorrow.  Summers is an even bigger moron than Bernanke. 

    • Summers will have to do something completely different to create inflation, the current QE programs around the globe for the past 5 years have NOT created any real inflation, printing more money isn’t going to create inflation, and Sinclair said this 4-5 weeks ago.
      The only thing that creates inflation is when the velocity of money increases, today the velocity of money is very slow.
      I have my doubts about Summers ability to create any velocity, he can’t force banks to extend credit, he can’t force Congress to do more stimulus, he can’t force tax cuts in this enviornment.

    • Actually zman, money supply + increasing velocity of money = inflation. We have the first half of that equation in spades, those who hold metals simply await the other shoe to drop. I wonder, since you are so sure these QE schemes are not inflationary, why have you invested in metals (as you’ve previously claimed)? Why follow these headlines, while proclaiming there’s been no real inflation in recent years? And IF there’s been no real inflation, why in the world does our government go to such extraordinary lengths to HIDE inflation via creative accounting practices (better known as “cooking the books” in other crime syndicates)?

    • Junkhead, I have admitted that I was wrong, I really thought trillions of newly created currency units around the world would be inflationary, thus far (5 years), no real inflation.
      Jim Sinclair admitted that he was wrong 4-5 weeks ago, he always stated that QE would lead to inflation, but now he states that the current QE program is not inflationary and that the velocity of money must increase, he is right.
      There is a big difference between “individual” inflation, and “business” inflation.  They try to hide Joe-Six Packs real inflation, becasue there is inflation for the drones, but there really isn’t any inflation for SP 500 companies, that is what matters most.
      There is NO velocity of money taking place today, Sinclair said it must increase for inflation to arrive, that’s a fact.
      Sinclair has no idea how Summers can get the velocity of money to increase, either do it, I don’t think it will happen.

    • Hey listen, Mack; if inflating energy prices doesn’t affect the big money S&P 500 businesses, do tell, what planet are they buying their fuel from to continue shipping goods and doing business here on Earth?

    • Oil was higher in 2007, natural gas is down -75%.  Wages are not moving higher, productivity is increasing, that is why the Dow is hitting all-time highs.
      If inflation hurts the big companies, then you have something, but it hasn’t happened yet.  
      Again, there is a big difference between individual and SP 500 inflation, big money doesn’t care about Joe Six-Pack, they only care about the bottom line for shareholdres, thus far, the bottom line is NOT being hurt from inflation.

    • You can keep saying these things over and over again if you wish. I don’t buy the phony accounting practices of the BLSBS. In fact I would argue that that nonsense is partially what keeps the inflation hidden; for now. It will not stay this way, and to illustrate this point, I would highlight the recent fast food workers’ revolts; and demands for increased wages. These people know they’re getting the shaft, and there’s only so far people will bend before the tension causes something to break. Oil was about 40 dollars more before the meltdown in ’08, that said, it is about 10 to 15 dollars HIGHER now than its peak in ’07; so I would have to flatly disagree with your statement there. But all this brings me back full circle to my original questions for you: why continue to follow these headlines? If you believe the meme you seem keen to spew, why are you still following PMs so closely, instead of moving on to the greener pastures of the stock markets?

  2. No real inflation? ZMAN I suggest you go to shadow stats and get an education. You must live somewhere where education, medical care, food and fuel are declining in price. It sure ain’t happenin in my neck of the woods.

  3. For us, the great unwashed, inflation is the price of groceries, gas, rent, electric and gas bills, insurance, taxes, medical bills and gubmint fees going up.
    They are.
    This doesn’t register in the core CPI because the bankers deliberately omit these things.
    “Economists focus on two CPI numbers. One is the overall CPI and the other is the core CPI, which is the overall number minus vital products such as oil and food products, which are excluded because of their price volatility.”

    Rich bankers couldn’t care less about the price of soap.  That’s why it costs so much, and we’re called ‘unwashed’.

    • “Economists focus on two CPI numbers. One is the overall CPI and the other is the core CPI, which is the overall number minus vital products such as oil and food products, which are excluded because of their price volatility.”
      Yes, that is what they do but it is also completely indefensible to anyone who knows even a little mathematics.  One does not omit data because it does not fit their model neatly.  If they wanted to include this data AND reduce the price volatility, they could always use what is called a “rolling average”.  This would average down the volatility aspect while still including VITAL data in their number compilations.  The simple fact is, however, that they do not want to included these numbers at all, volatile or not.  These tend to be the things that are inflating the fastest and that absorb a good chunk of the average citizen’s disposable income.  If one is engaging in a deliberate program to misinform and delude the American populace about how much inflation is occurring, this IS an excellent way to do it.
      As to economists… I do not hold them in high regard and it is pulling shenanigans like this that causes me to do this.  Most of these people work for banks, brokerages, universities, or various levels of government, so they have a significant vested interest in maintaining the status quo.  They don’t rock the boat with truth because if they do they will be fired and black-balled to the extent that they will never work as economists again.
      John Williams of is a notable exception to my general rule on the value of economists.  He does an excellent job specifically because he does not work for those who are engaged in deliberate deceit.  His clients want to know the TRUTH about what is happening in our economy because they will be making important business decisions involving millions and perhaps even billions of dollars.  There is a lot riding on John’s analyses, so he has a vested interest in making his reports as truthful and as meaningful as he can.  This is vastly different from what the usual economists do and the difference in value is staggering.
      I enjoy watching the TV show, Doomsday Preppers.  But I just hate it when people say that they are preparing for an economic collapse and the people running the show bring up “economists don’t believe that the US economy will collapse any time soon”… or words very much to that effect.  Asking an economist to violate the status quo by agreeing that a collapse is not only possible but inevitable is like asking a banker if s/he thinks that bank bail outs are the right thing to do. Of course they will agree with that, not because it is correct but because of who and what they are.

  4. Inflation is the expansion of money and credit.  High prices is the effect of velocity.  We are in massively inflationary times, with very low velocity.  The inflation is so strong in fact, that prices are still rising, even with velocity at massive lows.  Prices are going absolutely apeshit when velocity finally starts to pick up.

    • What, in your opinion, will cause the velocity of money to increase?
      I wish that I could say that the US and world economies were improving with time but I just don’t see it happening.  A lot of wealth is being moved around in various ways but I don’t see a lot being created these days.  Autos seem to be selling well but that is likely due to the facts that the US auto fleet was about as old as it ever has been and virtually anyone can get an auto loan at low rates these days.

  5. Well, Jim seems to have been totally unaware that Larry would withdraw today …
    Which argues that Jim is a sincere guy, and not a programmer.
    The confusing thing is that ZH is now referring to Larry as a hawk!!!!???? … And now that he’s out of the race, we will have alot of money printing!!? While at the same time, they are referring to the September taper!!? This is bizarre, and seems to be a part of the initiative to demonstrate political confusion. Remember, that for OWG to be achieved the twin towers of politics and finance must be brought down, and this fits with the Obama / Putin show over Syria (all actors in a Hollywood production). Gonna be a crazy week, methinks.

  6. what is worse that the blantant lies about inflation, their calculations are based on hedonics, the artful lie of replacing one good for a less expensive good to show, in the case of inflation, how the replacement of one good or service can show a lower rate of inflation.  And then there is the chained inflation rate, as much as 20% lower than the BLSBS and Fed speak inflation  In 2013 recipients of social security and veterans beneits were adjusted by this doublly fraudulent means to determining the rate of increase in these payments.  2013 was 1.7%
    TOTAL BULLSHIT.  the food inflation in 2012 and 2013  has been, depending on the commodity between 5 and 15% roughly.  1.7% is ALPO dog food hedonic adjustments, just like the same hedonics that were used in the 1970s. 

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