May 13, 2011, at 5:08 pm
by Jim Sinclair in the category In The News | Print This Post | Email This Post

“Jim Sinclair said the other day, “The drop at this time will in retrospect be seen as the foundation for gold trading not at $1,650, but rather at $5,000 an ounce.”
–Wealth Daily

Dear CIGAs,

I am preparing to leave tomorrow for Tanzania and Oman. There is no departure whatsoever from what Wealth Daily quoted today. Technical damage requires technical repair because today algorithms are the major participant in metals markets. The technical repair will take place and gold will trade to a minimum of $1764.

The Federal Reserve Balance Sheet was piled full of the worst garbage that financial institutions had. There was no Fed review of the junk OTC derivatives that make up these so called assets that were purchased. I suspect that is why the nice lady expert on the board retired. The banks just poured in all their losers. If the international public knew what that inventory was, the US dollar would be well below the .7200 level on the USDX.

The ability to reduce the assets by selling them would indicate that what has been a loser has miraculously become valuable. In my opinion it was the bad side of the Lehman flush that makes up a great deal of the assets of the Federal Reserve.

The remaining balance is US Treasury Instruments purchased by the simple creation of electronic paper. This also constitutes a great reason why QE (by that name or another) must continue. If the Fed did not have their QE check book open, I believe the Fed would be broke, having taken it on from the banks.

The Truth Has No Agenda [ GB ]

Bye Buy Shorts**

**P.S If the shorts are real