Legendary gold expert Jim Sinclair sent an email alert to subscribers late Monday regarding the MSM’s MOPE that the economy is in a recovery, and that real interest rates are set to rise, resulting in a bear market in gold.
Sinclair states an emphatic NO to both presumptions that the economy is recovering or that real interest rates are set to rise. Sinclair urges readers who are concerned that gold (or silver) are set to decline do so based on a fundamental basis, rather than relying on emotions.
QE is going to Infinity…AND BEYOND!!
Sinclair’s full alert is below:
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From Jim Sinclair:
Here is the bear case in gold in the actual words of an establishment analyst.
In reviewing this the question is simple. There are two premises stated in the positive – real rates and business activity. Do you agree or disagree with those two premises?
This is the Establishment, MSM and MOPE consensus?
“With a recovering global economy, and prospect for real interest rates increasing, gold should lag.”
1. Is there a solid recovery in the global economy? Yes or No?
2. Will the Fed reduce or cancel their QE program? Yes or No?
My answer is a simple: No on both counts. If you disagree with me do so on a fundamental basis. That is certainly more acceptable than relying on your emotions, or being influenced by the brute forces in markets common today.
You don’t need to be a brain surgeon, economist or monetary scientist because the above quote is the fundamental argument underlying markets right now, both in the dollar and gold.
This should explain to you why a firm dollar and weak gold is being preached by the establishment banking firms and their voices on the air waves.
Respectfully,
Jim
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Tell ya what I like about Jim Sinclair–he gets it. He understands. He knows the most basic and simple truth of all—That dogs are people too.
Question 1 – No
Question 2 – No
Keep stacking…
I thought that was a great picture of budder in the dryer. Yawn.
Not seeing any signs the economy is improving. People are still having a very difficult time finding a job OR are worried about losing theirs. At the holiday get-togethers last month, a common topic of conversation was how prices for everything keep going up, yet nobody is getting a pay raise.
And I can not see how the interest rates can rise without bankrupting the .gov.
Yet – last month – out of the blue – I received TWO job offers from recruiters.
Thus, IMHO the economy is on the mend.
Not!
OK, that is right…for now. There is a reason why Bernanke and Geitner are leaving. Not only have Ben and Timothy, respectively done their jobs, rose to the occasion, and performed their functions, the changing of the guard will also herald in new directions. I say they do raise interest rates to bring back dollars into Treasuries as Volcker did.
How will high interest rates affect the price of Gold?
High interest rates should be bearish for precious metals, but the concept of raising interests rates in an orderly fashion in the US to me seem as likely as waking up next to bigfoot and noticing I’ve grown a 3rd and 4th nipple. Impossible.
the sh!t would hit the fan on many levels if rates went up and if they do, it won’t be in an orderly fashion. Then, I’ll take my PMs.
The government says inflation is 2%. Why would they increase interest rates? Right now, the gov has everything under control they believe. No reason for them to change course. They have made our bed. We all have to lie in it. They cannot stop the plan they have instituted unless they are ready for a systemic collapse. We will stay the course until thier grand plan fails.
indeed. all roads lead to the same place. all politicians will keep the lie in play until the truth cannot be denied any more.
I said before, theoretically we don’t NEED a collapse to have the price of silver explode. BUT… thanks to the powers that be, that is what it will take because they will refuse to give up their games until the collapse.
There has been so much price manipulation in gold and silver over the past few years I doubt any fundamentals such as supply and demand or inflation of the money supply really matter. The amount of money available to create and cover paper shorts and the ability to knock down the prices seem endless. I’m not saying quit the stacking, but I am saying we better be patient if we want to see some better prices.