Jim Sinclair: The Federal Reserve Has No Practical Option To End QE Without Collapsing Financial System

The legendary Jim Sinclair has sent another email alert to subscribers regarding the take-down in the gold and silver markets Thursday on the release of the December Fed minutes.
Sinclair states that contrary to the Fed’s MOPE attempting to convince the market that QE will be phased out in 2013 as the economy recovers, There is no practical way that QE can cease here or in Euroland without a total and final collapse of the financial system.

Sinclair points out that the entire derivatives market hinges on the Fed’s unceasing QE, as the moment QE ceases, the US bond market collapses and the Fed must debt monetize all required debt, which means if QE stops, it starts up again immediately and in a crisis mode.

Sinclair states that QE cannot stop or the world as we know it instantly ends, and that the implications to what the Fed has done cannot be talked or manipulated away.  The consequences are coming.

Full alert below:

 

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From Jim Sinclair:

Such an announcement has been part of QE either from MSM or some Fed board member since it began. The implication of stopping QE is so dire to the economy that it is in a practical sense impossible. When gold was being sold by central banks during the 1970s market announcements were made constantly with the bias to depress metals.

 

There is no way that the implications and consequences of what has been done up to now can be talked or manipulated away. There is no practical way that QE can cease here or in Euroland without a total and final collapse of the financial system. Just go back to the IMF report on OTC derivatives I posted this morning. If QE ceases, the US bond market collapses and the Fed must debt monetize all required debt, which means if QE stops, it starts up again immediately and in a crisis mode.

 

I have to admit that if you have been a reader here for any length of time you should know this without asking me. The pressure that people unload on me during any gold reaction is downright mean.

 

The statement that QE can stop is simply MOPE. QE cannot stop or the world ends as you know it.

 

Please print this out and post it on your computer because every time the long cycle guy repeats his year old bear gold price prediction or the Fed says anything about stopping QE, you all go wild. It is embarrassing really.

 

If you do not understand what you are in, why are you in it?

 

Truman said it all when he said if you can’t stand the heat, get out of the kitchen.

 

The Federal Reserve has no practical option to end QE without ending the economic world for decades to come. Should that actually occur in some parallel universe, only gold will protect those citizens from the collapse of the by-default reserve currency. I am sure i have written this at least 200 times.

 

SD Bullion

Comments

  1. i stacked the smack today, thanks cartel for this new years present.

  2. These People are attempting a “legal means” approach through the U.C.C.   Whether it sparks something or not the Regular World is fiction in it self so read it  http://www.scribd.com/doc/118062106/Official-Announcement-From-The-One-People-s-Public-Trust-12-26-2012

  3. I find it funny that the Fed is just now starting to worry about the effects of QE4.  I read about it on DSN and it just made me laugh since people on this site have been talking about its ill effects since before it even occurred.
     
    On another note, it appears that some Senate republicans are taking the position that a partial government shutdown might be necessary to restore fiscal sanity, credit rating and the start of financial ruin be damned. 

  4. Jim Say’s
    If you do not understand what you are in, why are you in it?
     
    LMAO I love it Well Done Jim Your A True Stacker. LMAO
    Just Had To Post This Again. Fits In Well.




     
     

    • You need some silver nail polish! I needed a good laugh. You, AGXllK, Mammoth, Mary, and several others on this site are what makes this place as good as it is and as a ‘must go to’ destination each day. Not to leave out Doc, who keeps us informed when we don’t have time to do the research. Thanks to all, even to those that hate me, snowrider. Happy stacking.

    • Thanks for the laugh.  I’m still stacking every time they smash it down.  The only reason to be concerned would be if you needed to SELL all of your silver RIGHT NOW.  I won’t sell any Ag until the market realizes the true value of FRN’s and the true value of Ag.  If I needed any money (fake money that is) desperately I’d sell some Au but not any of the Ag.  Not until the silver/gold ratio drops below 10:1.

    • I don’t offer that much. The occasional one liner that hits hard.

    • This video forced me to make an account here… So Funny, so True! STACK THE BLOODY SILVER!

  5. Doc  I think Charlie’s rant is worthy of placement in the SD Hall of Fame.   Like the great poem Invictus, by William Earnest Henley, Charlie’s video should have a place, so that we can remind ourselves why we are in this fight.

  6. I still think we should be cautious of Jim Sinclair.

    • Almost every figurehead in the gold & silver scene has been corrupt at some point in time. They all have their history. Jim Rickards was general counsel for LTCM when they got bailed out in the late 90s. Bill Grant had his issues with the law in the past. Max Keiser openly admits he ripped off his clients back in the 80s, now he gets to spend his money running around Europe making videos. The only reason these people understand the scams is because they used to run them.

    • Jim Sinclair is one of the few people I trust.
       
      I trust him implicitly.

      I also pay heed to what Eric Sprott and John Embry say. Jim Rickards knows what he is talking about. His ego won’t let him be wrong, so he’s telling the truth. Michael Pento talks a lot of sense, and so does Doug Noland, IMHO.

  7. I agree with Sinclair that the Fed is in no position to stop the laundering of fraudulent mortgages or giving the financial sector their hillbilly heroin. Also the concept that they will be able to unwind their position is no doubt a big stretch. I don’t know how one could argue that.
     
    The unfortunate part for all of us, as I’ve said before, is that the market can remain irrational for way way longer than it should. Even some of the big guns are expressing dismay that the wheels have stayed on this long.

  8. CDL  I think we are going to be the fortunate few who will have the patience and assets to see an end to this irrational market. 
    It’s likely to have a ‘use by’ date, possibly 2015.  We will be vindicated due to our personal commitments and our investments in tangible assets.  I have been on the irrational side of the market way too many times and the losses were very painful. Lessons learned, this time my studies’ve extended over two years before I committed to the precious metals investments. 
    I’m more confident now that the markets will suffer a calamitous crash, not because of some optimism bias but because the markets,  deprived of,   or may due to,  their irrationality must collapse.  Given the simple fact that no matter how much FIAT they print; how much debt they create and maybe most importantly, no matter how much MOPE, disinformation  and how many restictive regulations imposed, OUR human will is going to prevail. Irrationality does have an end to its eccentic nature.  It is an outlier in the long run because a better human nature will prevail.  Of that course, I am very optimistic.
     Markets do right themselves eventually.  This gives me great optimism that we are on the side of the right, just, honest, informed and maybe heavenly choices. While I have little knowledge of religions, I think that being on the honorable and ethical sde of the issue will prevail in due course.  My optimism of human nature is pretty strong in that, even if a painful reset is needed to get our better natures realigned, it will place.
      The legion of financial problems faced worldwide will come to a head. It’s been brewing for the last 40 years and even longer, back to the foundation of the Fed.   The consequences of these actions must be faced.  Debt unwind this time around will be considerably different and and possibly more painful than previous epochs, due to derivatives, FIAT printing,  coupled with debt to GDP ratios in most of the countries well in excess of 100%. This is a global mess which make it nearly  unprecedented.  The central banks and governments will have a day of reckoning.  It is possible we may have a few more years of this suffering,  or not.  Silver and gold shortages are no myth. These shortages will show themselves even more prominently in 2013.  The potential price increases may have nothing to do with the world wide debt/derivative reset.  These commodities have a life of their own and despite all the news about price supression and manipulation, that particular segment of the Irrational Markets will come to an end but not by its own doing.  Supply issuesmay very well be the consummating force that will make possible the breaking of this festering boil. 
    Things move slowly until they start moving very fast.

    • Amen to that, brother AG!  Been a while since I’ve had time to kick around these parts (work and life have been CRAAAAAAZY, in a good way) but always nice to drop in an see voices of reason (you, Marchas and others). 
       
      Oh, and my stack, she still grows… these fire sales of late have sure been nice!  I’m in for the long haul baby… but then, I know why I made the decision to stack after several years of reading and searching for what was “wrong” with the system, and nothing has changed with any of the fundamentals that led to my choice.  :)

    • Those of us who are honest about silver and don’t try to hide behind paper charts to make a point will come out on top in the end. Paper markets are headed for a crash sooner or later, especially as supplies of phyz dry up. Soon as the comex or London market fail to deliver a large order on time things will start to unravel. The paper boys can’t hold prices down indefinitely, especially if the fed is going to try to wean the government off Qfinity.
       
      Hopefully next month I can start stacking more seriously, this month is finishing up my lead supply, found a crate of 7.62x54r today and my gun guy has 250 rounds of 9mm waiting for me.

  9. @ich1baN: I read your post about him and many thanks for that, another piece of the puzzle to put “advisors” in their proper context. I assume anyone allowed to develop any following is, at the very least, somehow associated with our overlords, tasked with keeping us running around in circles. I’m perfectly happy to scan (hiding in plain “site”) Sinclair’s “insider” info, having always assumed his nefarious connections, but, given your more complete outing, will spend a little more time trying to analyze what direction his spin is attempting to push us.
     

  10. @Chrissy, thank you for the accolade but I am quite undeserving of mention.
    I am just an addict searching for my next ‘fix’ of Junk Silver.
     

  11. Each member of the FMOC is aware of the fact that the Fed must buy bonds.  They’re aware of the fact that the Fed bought over 60% of the Treasury issuance in 2012 and this year will likely require even more bond buying to prevent a failed bond auction (their #1 nightmare).

    THEREFORE:  It’s my view that each of these stooges making mention of cutting the bond buying program timeframe short are flapping their lips strictly for public propaganda and market management reasons.  Either that, or they don’t know what the heck is going on, which is not likely.

    • When the Fed is forced to buy bonds because few others will, I submit that their auction has already failed.  Last I read was that the Fed had to buy more than 70% of the bonds offered in the final 2012 auction.  There are just too many investors who recognize this drek for what it truly is… the sovereign debt of a deadbeat country and an investment that pays LESS than inflation; a guaranteed money loser that has phantom profits that are then taxed as if they were real. It would be difficult to find a worse investment.
       

  12. @Flying Wombat – you’re quite right mate – those FOMC members are just covering their arses. They expressed verbal reservations, which are recorded and minuted in writing (arse covering), but they voted (because there’s no other alternative) to carry on with QE.
     
    If QE stops, the Treasury will have to rely on the market (instead of the Fed which buys 60% of Treasuries now at 2.5% interest) to buy 20 year Treasuries. The market won’t want only 2.5% because inflation will kill the value of a Treasury in 20 year’s time. That means Government  interest rates must rise if QE stops – and then you will see the US budet deficit really explode. There is no way the Government can afford higher interest rates, so there’s no way they can allow QE to stop. In short, they’ve painted themselves into a corner. So, those sly arse covering FOMC members are speaking out of the sides of their mouths.
     
    No wonder Jim Sinclair gets frustrated with panic attacks by those who can’t see the reality of the big interest rate affordability picture.
     
    As far as Jim Sinclair’s agenda goes, it seems to me he has only one, and that’s to promote his belief in gold/sliver as a long term investment, a belief held by all the stackers on this website. If you question Sinclair’s agenda, then you must also question the agenda of the stackers.
     
    If you read Sinclair’s Mineset website carefully you’ll see a kind and compassionate man, with free PM education generously given to those who wish to learn. He has more experience in PMs than probably all of us combined, and over multiple decades (go read his amazing CV). He does have a somewhat excentric nature, and sometimes expresses himself in a cryptic and unorthadox way, but that does’nt detract from his remarkably forthright and intelectually sound opinions.
     
    A good New Year to all stackers, and may 2013 be bountiful to us.

    • @AndyZ

      “If you read Sinclair’s Mineset website carefully you’ll see a kind and compassionate man, with free PM education generously given to those who wish to learn. He has more experience in PMs than probably all of us combined, and over multiple decades (go read his amazing CV). He does have a somewhat excentric nature, and sometimes expresses himself in a cryptic and unorthadox way, but that does’nt detract from his remarkably forthright and intelectually sound opinions.”

      Well said. This is exactly how I see him. And this is why I trust him. He is a good man. An altruist.

  13. aragornsos.  It sound like ilife is treating you well if you can stack.  It’s been a while  Did you row across the Pacific or something, out of computer and sat phone range?  I am trying to recall if you are situated in Spain or South America.  My recollecting is not the best.  Keep in touch and let us know how things are doing in your country.  It’s interesting to note how we are viewed from other lands.
    I share the same sense about Sinclair.  He seems a decent sort who wants to get the information out to silver seekers.  I don’t sense any real animus in him  He also seems surprised as the venom he receives from those who disagree with him. I like his information. It’s broad spectrum and his analysis in various subjects seems to tied together.  Not too many fault lines in his thinking. But thats just my opinion.

  14. A little off topic but important news nevertheless:
     
    “Vaccine Industry In a Panic…

    Over Pending UN Removal of Mercury in Vaccine Action…

    Opinion by Consumer Advocate  Tim Bolen

    Monday, December 17th,  2012″
     
    As David Morgan has said, “Wishing you health above wealth and wisdom beyond knowledge…”.

  15. If the FED did try to end QE one would think that we would get some advance notice about it.  I mean they really are trying to help lower unemployment and grow GDP.  They wouldn’t leave US investors out of the loop if the decided to stop it…or delay it.  Would they?  just kidding.  

  16. Plebian  What are the details about this uproar over vaccines.  I am opposed to any adulterants in vaccines and even have concern about some of the value in these potions.  The flu vaccine seems suspect too

  17. vaccines ….. bad science, limited proof of efficacy, doctored data, incomplete collation of adverse events … many vaccines of little value and linked to a number of emerging diseases since the 1960′s…

  18. As long as the FED can print their bank notes ($100 bills) for less than $.10 a piece you can rest assure they will still be buying gold at $1.60/oz. If buying gold is a major agenda of the FED, eventually the time will come when their accumulation will position them to control the financial world even after the collapse of our currency. In fact, the destruction of the dollar may be exactly what they have in store for the world. They have played this game too long to not have a backup plan to continue their hellish ways.

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