A nice summary of Jim Sinclair's interview with Ellis Martin from TFMetalsreport Trublu:

Jim Sinclair predicts that the ISDA (controlled by the 5 largest banks) will state tomorrow that the Greece bankruptcy is not a default event, even though the creditors are being forced to take a 70% haircut. The reason the ISDA will declare this credit event not to be a default is because the 5 largest banks underwrote the credit default swaps (i.e., an insurance policy that pays when there is a default) that insured others in the event of a default. If the ISDA were to declare a default, then the 5 largest banks would be forced to pay 97% of the obligations on the credit default swaps for Euro debt and it woud bankrupt the banks.

The other side of the equation is that those who have taken major long Euro currency positions or invested in the debt of certain countries such as Greece (as MF Global did), are counting on the credit default swaps (insurance policies) to protect them in case the Euro fails (or goes down significantly).

This creates a monetary standoff because you have a pro forma default where a true default has occurred and there are heavy losses by companies relying on the credit default swaps as an insurance safety net; however, there is an intentional failure by the ISDA to call it a default event and trigger the insurance coverage because then the 5 largest banks would then implode in paying out the heavy losses.

The solution is to create liquidity in the system that falsely supports the Euro, Greece, etc, so that the companies that purchased the credit default swap insurance do not have heavy losses as the liquidity basically "floats" the currency. In this way, the banks don't lose implode and we do not have many more MF Global's imploding either due to taking heavy currency hits. Everyone is happy with this false sense of security.

Sinclair's bottom line is that the forced liquidity to keep the Euro afloat (and the 5 largest banks and other large entities with hedged currency trades), will create QE to infinity and take equities and metals with it for the upward ride.

It is really a very basic equation that only a few have focused on and Sinclair is laying it all out for us (Thank you, Jim!). It certainly makes sense.

I'm all in for the PM ride.