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Jim Sinclair Reveals How the Gold Reset Will Occur

by Jim Sinclair, via Silver Doctors:

QE to Infinity, followed by Gold balancing the balance sheets of the sovereign balance sheet disasters. Just as there is no tool other than QE to feign financial solvency, there is no tool to balance the balance sheet of the offending entities other than Gold. It is just that simple. –Jim Sinclair

Dear Jim,

Due to its criminal hyper-manipulation, golds price has become a paradox.
Paper gold’s weakness actually reflects the forthcoming strength of the physical gold market. I feel this statement, as paradoxical as it seems, hits the nail on the head.

Best regards,
CIGA GG

Dear GG,

Contained in this statement is the basis for my conclusion and the formation of long term plan since gold made its high in it last bull run from 1968 to 1980.
Those that read my writings have heard the plan at least once a year since my exit from the paper gold business in 1980.

In the period of 1968 to March 1980 it was rumored that I was the largest volume gold trader in the world. If there was someone larger I never met them.
In 1980 the Wall Street Journal ran an article “Bull Takes off his Horns,” which I hold as a reminder of that period.

The statement that GG points out in the opening note to me finds its roots in the school of “Free Gold.” This group of thinkers is absolutely correct on its main subject, gold itself. Like any other group there are offshoots that hold various views that can cloud the main thesis.

In my opinion, their foundation is the only correct answer to what gold is, how gold functions in the economic system, why the paper gold market was started, by whom it was started and for what purpose the paper gold market actually exists. This school of thought goes on to predict that the future of gold’s value is not as an alternative currency for the exchange of good and services but as a storehouse of value for holders both public and private.

In March of 1980, which was the end of the 1968 gold bull market, a client of one of my firms came to visit. He was extremely happy for the experience and came to thank me. I told him that he was thanking the wrong person. His great success was based on his courage and understanding that made him so successful. The client was Carl Seaman of Seaman’s furniture in the New York metropolitan area. Carl had made himself one of the first 1% due to inherently knowing Jesse Livermore’s discipline that major fortunes are when you are right and do not deviate.

He was one of the world’s greatest traders.

I asked Carl if he would wait for me for a few moments. I called the accounting department on the 8th floor requesting a check for the collective balance in all of Carl’s accounts. That check was indeed a hum dinger. I held it and asked how many feet away was the revolving door to my firm’s main office. He replied about 20 feet. I handed Carl his checks and asked him never to come back again, to call me only as a friend.

We will never do this again in the way we did based on paper gold.
I told him I anticipated a bear market in gold of no less than 15 years and that I was in the process of selling all my firms and then I would walk out the same door.

The next fortune in gold will be made via long physical gold margin free in an enormous way. Due to the volatility of the price of gold there can be no margin involved nor paper gold derivatives.

The formula is simple to expound but very hard to exercise. It called for full utilization of our capital individually to identify a huge deposit of gold relatively inexpensive to mine. The key is NOT to sell the gold produced but to get your leverage from bullion refiners, not banks, that loan to producers as part and parcel of their business.

The strategy is to own a gold mine that mined its product, paid the host government their royalty and other charges, then use the production as the basis to borrow funds required for operations at an inexpensive rate. We then put all our funds in US 10yr. T Bonds yielding almost 15%.

What I proposed was a public mining company that held all it’s gold refined and above ground not in a bank, but in a non-financial company, in a refinery that is not in North America and does make loans to its clients based on refined to market product. The price that I envisioned the entity might be worth is many billions assuming my final prediction is correct.

The fight to build this has been enormous. It has required close to everything I have and 19 years of life.

The strategy has required 100% dedication of my time and finance to fight in many instances attempts at the largest claim jump in history by the Chinese, using every modern method known to financial engineers.
They have not succeeded. There is much more to be done and risk therein, but survival has been the key so far in this field while awaiting the next bull leg in the final gold bull market.

A recent NI 43-101 for the first time has hinted at the developing size of this strategy that I believe will write history because of the basic tenets of “Free Gold” in a somewhat different way that “Free Gold” anticipates.
In 2013 CIGA Belgium wrote the following letter that I feel you should read and re-read now. If you do you will be one of the very few that really understands all about gold and its outrageous future. You will understand the huge selling into the paper market and why it is limited in time by its own construction.

CIGA Belgium has permitted me posting excerpts as long as his identity is confidential.

Dear Jim, (written to me on February 18th 2013)

We are only just now arriving at a time period that will bring about “The Currency Wars”. Everything prior to this was only a preparation period to build an alternative currency. The years spent traveling this road were done to prepare the world for an escape medium when the dollar finally began it’s “price” hyper-inflation stage.

Few investors can “grasp” that in reality, our dollar has already been hyper inflated, but without the higher price effects. Years of deficit spending, over borrowing, debt expansion have created an illusion that the dollar was immune to price inflation. This illusion is evident in our massive trade deficit as it carries on with no negative effects on dollar exchange rates. Clearly other investors, outside the Central Banks were helping in the dollar support process without knowing they were buying into a dying currency system.

The only thing that kept this process from showing up in the prices of everyday goods was the support other Central Banks showed for our currency through exchange intervention. As I pointed out in my other writings, this support was convoluted at best and done over 15 to 20 years. Still, it’s been done with a purpose all this time. That purpose was to maintain the dollar for world economic trade, without which we would all sink into depression. Indeed, the mainstay of this support required an ever expanding world dollar base. There is simply no way the old dollar debts along with the new ones could have been serviced without this money expansion.

The entire long term process is/was very clear to a few major financial players as they prepared for the dollar’s retirement as a reserve. Their main strategy for dealing with this was found in several positions. One was a long term buying of real physical gold. The other was the acceptance that all trade and investments would eventually transition away from dollar use. To combat this they began to denominate their paper assets and business transactions in other currencies (now the Euro holds the main transition flow). This was done because, as the dollar prices of real things first show real signs of rising, all forms of dollar derivative contracts would begin to unravel.

Better said, the process of dollar contract failure would show up in the form of discounts on these derivatives from par value. Because most of our “end time” dollar world has built itself into a huge derivative game, this discounting will occur across the board in almost everything we deal in. Not just gold.

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