Posted: Sep 05 2010 By: Jim Sinclair Post Edited: September 5, 2010 at 3:06 pm

Filed under: Jim's Mailbox

It looks like what I had anticipated many years ago is occurring NOW!

The gold industry itself, the least knowledgeable of the gold price mechanism, has woken up to the fact that for every million ounces a junior has there is more than $1 billion in value less cost of production. The guys who dig gold out of the ground are nitwits when it comes to the price of their product. Did they not lose billions betting against themselves on short of gold OTC derivatives?

Regards,
Jim

Goldcorp to buy Andean Resources for $3.42B

Gata

Dear Friend of GATA and Gold (and Silver):

With his new commentary, "Gold Entering a Virtuous Circle," Egon von Greyerz, founder and managing partner of Matterhorn Asset Management in Zurich, updates the case for the precious metal and says he considers $6,000, $7,000, and $10,000 to be realistic price targets. Von Greyerz writes:

"Gold and gold mining shares were an average of around 25 percent of world financial asset between 1921 and 1981. Today gold and mining shares are only 0.9 percent of world financial assets. If gold and mining shares were to go to 25 percent of financial assets, gold would go to over $31,000."

Wild as that may seem, one could argue that von Greyerz is being conservative. For during the 1921-1981 period he cites, gold investments were indeed largely gold investments -- real metal -- while since then much if not most investment in gold has been diverted by derivatives to mere paper claims on metal that increasingly hasn't existed at all as Western central banks and their bullion-bank agents developed the system of fractional-reserve gold banking to suppress gold's price and support government currencies and bonds amid a vast expansion of the world's money supply.

What would the price of gold be if investors suddenly discovered that most of what had been thought to be the supply was only imaginary, a government-inspired fraud that made Bernie Madoff and Charles Ponzi look like great humanitarians? It probably would be a price high enough to get von Greyerz a date with Mario Bartiromo on CNBC to explain how the establishment financial news media got it so wrong.

You can find von Greyerz's commentary at the Gold Switzerland Internet site here:



CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.http://goldswitzerland.com/index.php/gold-entering-a-virtuous-circle-egonvongreyerz/