jmreport,

I found Sinclair to be very blunt and straightforward in his manner of speaking, as usual. I think those of us that heard it, see the difference in the interviewer between an edited interview and a "raw" one. Poor Ellis was having a lot of trouble with Jim's concepts!!

Although I usually get Sinclair's message load and clear, even though I certainly don't understand all of his reasoning, I had an "ambiguity hangover" on one point. It sounded to me like he was saying if the ISDA calls the default (which he's sure they wouldn't and he was clear as to why), that everything will go to hell in a handbasket in an accelerated fashion. But, he also is clear in saying that not calling the default is the wrong thing to do, and that it kicks the can down the road, etc. But, that in the meantime, the QE that must accompany the non-default call will mean equities will have the wind at their backs.

However, he is also clear that the default is ultimately inevitable, and that the more QE that's thrown at it now, the worse the effects of the eventual default will be, at which time, all equities, including PM's, go down - hard. And this makes sense, because if the default causes the credit markets to tie up like in fall and winter of 2008-09, in a super-Lehman Brothers scenario, things could get ugly fast.

If I understand him correctly, then, at some point down the road, the stuff will hit the fan, and just about everything, including PM's, are in trouble. Bottom line, we'd better be on the lookout, and be ready to take action quickly if all of a sudden, defaults start to happen and the world runs out of QE bailouts.

Would welcome comments re the above.