Jim Sinclair has sent subscribers another alert this afternoon regarding the delay in the implementation of the Basel III requirements, which were set to make gold a Tier I asset- making the metal equal with cash or treasury bonds for capital liquidity requirements. 

Sinclair states that the entire reason that Basel III has been delayed is because the Western financial system simply does not have the ability in terms of real liquidity to meet the new requirementsSinclair states that the Western financial system cannot meet the requirements now, they will not be able to in 2 years, and that his conclusion regarding Obama’s appointment of Citi derivative dealer to the position of Secretary of the Treasury isFather forgive them because they (our esteemed leaders) really do not know what they have gone and done.

Sinclair’s full alert is below:

tier1.gifOur friend Eric Sprott has released his latest Markets At a Glance newsletter titled Gold: Solution to the Banking Crisis.

If the Basel Committee decides to grant gold a favourable liquidity profile under its proposed Basel III framework, it will open the door for gold to compete with cash and government bonds on bank balance sheets – and provide banks with an asset that actually has the chance to appreciate. Given that US Treasury bonds pay little to no yield today, if offered the choice between the “liquidity trifecta” of cash, government bonds or gold to meet Basel III liquidity requirements, why wouldn’t a bank choose gold? From a purely ‘opportunity cost’ perspective, it makes much more sense for a bank to improve its balance sheet liquidity profile through the addition of gold than it does by holding more cash or government bondsif the banks are given the freedom to choose.

Sprott’s Full Letter Below:

The Fed issued a statement Friday morning that they are delaying the implementation of the Basel III capital rules which were to go into effect January 1st. 
Apparently JPM and Goldman whined that they were not ready for the implementation of the new rules, so they have been postponed indefinitely.  Is anyone surprised?

Full Federal Reserve statement below:

U.S. regulators on Friday delayed the effective date of a global agreement on greater bank capital buffers reached in response to the financial crisis of 2008.