Sobering Words from Jim Sinclair
March 26, 2009
– Comments (24)
"The dollar does not have a future" ... he really needs to stop beating around the bush.
Seriously, though, he's right, and this move by China, Russia, India, Brazil, South Korea, and others to replace the USD as the world's reserve currency is al the writing on the wall a Fool needs to know this currency has just been deep fried in $13 trillion worth of saturated fat.
I just drafted an article about this development, examining the proposal to use SDRs as the new reserve currency. Guess what, their use would be predicated upon yet another new global market in over-the-counter derivatives. Now does that sound like a recipe for success?
I will post the article to the blog when it's out, likely tomorrow.
By the way, when Sinclair refers to Alf Field's numbers in the discussion below, he refers to a future gold price in the many thousands of dollars. Ultimately, when the global fiat money system prives unable to absorb this great unwinding, the global balance of accounts must be priced in gold.
http://www.jsmineset.com/
Professor James Galbraith was interviewed early this morning on the Geithner plan for the purchase of toxic assets. This interview focused on the very subject that constitutes my most serious concerns. It was on Bloomberg TV, but I see no review of it on their website.
His analysis would confirm what I have been told concerning the condition of the paper held by many financial institutions.
His review confirms my belief that there is no alternative but to bail out every financial institution in amounts that can’t now, due to the opaque nature of the miscreant paper, be evaluated. What you can be sure of is that the number is enormous. Yes, larger than anything we have seen yet.
This financial situation is totally out of control. Government financial leaders are flailing in the wind, trying every remedy ever heard of while inventing new measures, all of it in total futility.
Major Banks will be nationalized. Smaller institutions will be rolled into nationalized banks.
The Dollar does not have a future. Gold is your only refuge asset.
To allow yourself to be run out of anything gold by the COMEX manipulators is to sacrifice your financial lifeline. It is just that bad.
The price of gold will attain Alf Field’s objectives. There is no question about this conclusion as this problem cannot remain hidden. The unavoidable financial consequences are already raising their ugly heads and the curtain is coming up on the degree of this total disaster.
New financial oversight regulations of hedge funds and the OTC derivative market are so late all they really will amount to are meaningless public relations. The damage is done and cannot be undone by spin.
Galbraith this morning voiced his concern that the paper held in the banking system is “permanently impaired.” That means this paper is to a large degree the left over partial contracts of the creation of the securitized OTC derivative paper sold everywhere to everyone without offset and is therefore valueless.
Galbraith alluded to a fractional reserve approach towards mortgage securitization by intent of error whereby the same mortgages were securitized more than one time.
Galbraith spoke of obscuration in terms of a planned cover-up of details of the asset’s condition. He also discussed the need for clean audits that will only be available on the true valuation of that which is worthless and those with partial valuation. He indicated the conditions are so dire that only nationalization will permit clean audits.
Your future depends on gold as there is no piece of paper or SDR package of various paper that can protect you.
Gold is no longer investment, it is your lifeline. It is that serious.
About that there is no question.
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