Yesterday appears to be the inflection point that told the markets loud and clear, those in charge are incapable or unwilling to address the worsening American economic and financial crises. If they can't look after their own domestic issues then how could any sane person expect them to address the wider global issues? At any rate whether this is just the beginning of a massive loss of confidence worldwide has yet to be seen but it certainly looks that way in the past 24 hours.

I believe Jim Sinclair's standing thesis on how the various markets will react in the absence of adequate stimulation and widespread loss of confidence is valid, and provides a reasonable roadmap on how all this market uncertainty will unfold. Admittedly his timing on when the markets would begin unravelling was off a bit as he originally thought this would begin at the end of QE3 (July.) So keep this in mind when reading his piece from June 08 plus the fact his call for $1650 Gold was spot on except a bit later than the date he had marked.

Thus if Sinclair's prediction is correct PMs will only react modestly for a short while, before leaping ahead multiples of this reaction. And bear in mind the reaction in Gold so far is no different then we've seen through this period of violent chopping. Also the timing of this correction couldn't be better as the Gold cycles are about to turn positive in a matter of a few weeks anyways.

http://www.jsmineset.com/2011/06/08/jim-sinclair-gold-to-exceed-12500-to-balance-us-debt/

"“Quantitive easing is the only tool that the Fed has had available to them. The Fed has pumped in trillions of dollars and the result of that pump-priming in the monetary sense has been only at best a modest recovery, and certainly making trillionaires out of some bankers, billionaires out of many of them.

We’ve come to a point now where if QE were to be stopped, you would see an implosion in the general equity markets…And yes gold would go down, the market would go down hard. The dollar would go up slightly to begin, but then fall back down again as the management of the economy was seen to have been ineffective and inefficient.

Gold would then start moving back up again and I think if QE was to cease, the recovery on gold from a modest reaction would be multiples upon multiples of that reaction and would lead the way to Harry’s $2,400, to Alf’s $3,000 to $6,000"