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View Full Version : Jim Sinclair's new message.....from "This is it!" to "THIS IS THE END!!"



Relayer
11th February 2010, 22:07
Relayer: Early last year Jim began a countdown to the failure of confidence in the dollar. He assured that by late Nov 09 things would be clearly obvious to the many and the dollar index would begin an extended decline to possibly as low as 52. Like others, he did not give enough credit to the PTB and their ability to wage an effective propaganda (MOPE) campaign, and their ability to manipulate markets. The acknowledgment by the many of the truth.....of the dire financial situation that exists around the world.....has been aborted.

IMO, this failure of acknowldegement guarantees a series of shock waves of a higher intensity. In other words, when the truth becomes known on a broad scale, it will take more people by surprise. Fewer will be prepared for what unfolds. The previous scenario of a managed, gradual dollar decline through 72, followed by another decline to 62 is IMO no longer a reasonable expectation. IMO a sharp/swift decline in the dollar is to be expected. More volatility in everything. This includes more volatile human beings. From my point of view, this is already apparent.

Jim has years of financial experience, has knowledge, a window into the world of business/economics which I do not have access to. I regard him highly and do not take his advice lightly. Yesterday I posted of the absurd reponse by Geitner regarding the possibility of the US debt rating being lowered. His response "NEVER". His response is an example of the overconfidence, the expectation of continued (future self control); the idea, the belief that the PTB are in control, is discussed in the article that follows Jims short message. I urge all to visit Jims site, as today, there has been posted so much important information.



From JSMINESET:
Dear Extended Family,
I sent an email to you awhile ago saying "This Is It," when it wasn’t apparent.
Now, I am sorry to say, THIS IS THE END because it is becoming apparent.
Everything stands on the foundation of CONFIDENCE which is cracking rapidly.
Respectfully,
Jim
Just How Ugly Is The Sovereign Default Truth? How Self Delusions Prevent Recognition Of Reality
Submitted by Tyler Durden on 02/11/2010 13:55 -0500
Today SocGen’s Dylan Grice shares his perspectives on popular delusions, and why these may soon be coming to an abrupt end. Dylan begins:
Behavioural psychology applies to central bankers, regulators and politicians as much as it does to investors. In promising to ‘fiscally retrench tomorrow’, finance ministers are exhibiting the behavioural phenomenon of overconfidence in their future self-control. The bitter fiscal medicine required to stabilise debt levels won’t become more palatable today relative to tomorrow until the bond market makes it so. It can only do this through higher yields. Thus, Ireland and perhaps now Greece lead the way. For the Japanese it’s too late.
Why should behavioural psychology be seen as something applying only to investors? "Behavioural" finance is a well defined sub-discipline in its own right. But where is ?behavioural? politics, ?behavioural? central banking, or "behavioural" regulation? Remember the Fed policy statements around the end of the 1990s? The ones that kept referring to the "technology-enhanced" rate of GDP growth? Wasn?t this herding around a bad idea the very same herding then fuelling the NASDAQ bubble?
Nowhere is self delusion more prevalent that in the workings of the Federal Reserve duo of Greenspan and Bernanke. The issue is that any weakness, or any affirmation of faulty policy by the head money printer, will immediately be seen as weakness that could destabilize the reserve currency format. For a monetary system based on flawed assumptions that would be the beginning of the end.
Apparently heroin addicts can become so drug dependent their bodies cannot withstand the shock of withdrawal, and failure to continue taking the drug triggers multiple organ failures. I just wonder how apt that analogy is to our governments? debt dependency today. As long as governments think that taking these difficult decisions to end the addiction will be easier in the future than it is today, they will never take the decision "today." At the very least, there will have to be a sufficiently large bond market "event" to force the issue.
Today we finally saw a crack in the 30 Year Auction. And as the crack belongs to an ever more brittle wall holding back trillions in debt just begging to be revalued to fair value, and to an unmanipulated supply and demand curve, more and more fissures in the smooth and fake facade of sovereign debt will soon appear, only this time not somewhere out of sight and out of mind like Greece, but in our own back yard. At that point the financial oligarchy will very much wish the Methadone had been administered sooner (roughly about March 2009, when we first suggested it). It will however be far too late, and the decades of self delusion will finally end.
More… (http://www.zerohedge.com/article/just-how-ugly-sovereign-default-truth-how-self-delusions-prevent-recognition-reality)

Relayer
12th February 2010, 00:03
SOVEREIGN ALCHEMY WILL FAIL

February 11th, 2010 by Egon von Greyerz


SOVEREIGN ALCHEMY WILL FAIL


by Egon von Greyerz – Matterhorn Asset Management

When we look at the world economy today, wherever we turn we see a wall of risk. And sadly this is an insurmountable wall with risks that are totally unprecedented in history. There has never before been a potentially catastrophic combination of so many virtually bankrupt major sovereign states (US, UK, Spain, Italy Greece, Japan and many more) and a financial system which is bankrupt but is temporarily kept alive with phoney valuations and unlimited money printing. But governments will soon realise that they are not alchemists who can turn printed paper into gold. The consequences of the global financial crisis are potentially catastrophic.
As the Austrian economist von Mises said: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion or later as a final and total catastrophe of the currency involved.”

In our view, governments like the US and the UK and many others will not abandon further credit expansion. They are committed to printing increasing amounts of worthless paper money in order to finance the growing deficits and the rotten financial system. Therefore there is no chance of Quantitative Easing ending but instead it will accelerate in 2010 and after. The consequence of this will be a hyperinflationary depression in many countries due to many currencies becoming worthless. No economy in the world, including China, will avoid this severe economic downturn which is likely to have a major impact on the world economy for many, many years to come.
Investors are ignoring the risks

What makes the current situation in the world economy so intriguing is that most investment markets have not recognised the risk. Stockmarkets and bond markets rallied substantially in 2009, totally oblivious of the risks. The housing market is down in the US and some European countries like Spain and Ireland. But in many other countries it is still near the bubble highs created by low interest rates and reckless lending.
The most important criterion, when taking investment decisions, is understanding the risks involved. Matterhorn Asset Management has in the last few years warned investors about the risks in the financial system due to the massive worldwide credit expansion and money printing. We have found it difficult to fathom so few people realise that the world economy has become a time bomb waiting to explode or more likely implode. All the so called experts have declared that it is impossible to identify the problems in the financial system in advance. For example, Greenspan, Bernanke, Geithner, other central bankers and government officials as well as Blankfein of Goldman Sachs and many bank heads have all stated that they couldn’t see it coming. Either they are lying or they are stupid. Sadly, it is most likely the former. It is virtually impossible to find an honest politician. They have one major objective – Power. To attain power they have to buy votes. But to buy votes they cannot tell the truth. No politician ever forecasts bad news because bad news does not buy votes. (Yes, there are exceptions like Ron Paul in the US). And as regards the bankers, it is definitely not in their interest to worry about risks to the financial system. For every year that they issue additional toxic debt and derivatives they earn more in that single year than most normal people earn in a lifetime.
Sovereign Defaults

The list of countries at risk of bankruptcy is increasing by the day. The acronym used to be PIGS (Portugal, Ireland, Greece and Spain). It is now PIIGSJUKUS and growing. The main contenders are currently: USA, UK, Japan, Spain, Italy, Greece, Ireland, France, Portugal, Baltic States, Eastern Europe and many more. On a proper accounting basis all of these countries are already bankrupt, but since many nations can either print money like the US and the UK or increase their already high borrowings, like Greece or the Baltic States, they have technically avoided bankruptcy although in reality all the countries in the list above are basket cases with very little chance of a return to normality. Shown below is what we call the Sovereign Time Bomb. The bomb consists of countries that have a combination of budget deficit and borrowings relative to GDP which puts them into the category “Time Bomb” or high risk of default. These countries have budget deficits from 6% (Italy) to 12.5% (UK, Greece) of GDP and their Public Sector Debts are ranging from 60% (Spain) to almost 200% (Japan) of GDP.
The Sovereign Time Bomb

http://matterhornassetmanagement.com/wp-content/uploads/2010/02/countriesindangerzone1.jpg (http://matterhornassetmanagement.com/2010/02/11/sovereign-alchemy-will-fail/countriesindangerzone-2/)
The problem is not just the current debt levels of these nations, because the deficits in all the countries are rising. Tax revenues are collapsing and with rapidly rising unemployment, the governments’ expenses for social charges are soaring. In the US for example the federal deficit in 2009 was $1.5 trillion (10.7% of GDP) and is forecast to stay around that level for many years. The plight of the US states is just as bad. Out of 50 states only 4 are expected to have a balanced budget in 2010. Up to 40 states, including California, New York, Florida, Illinois, Michigan, Ohio, North Carolina and New Jersey, are virtually bankrupt.
It took almost 200 years for US Federal debt to reach $ 1 trillion which it did in 1981. In 2009 the debt increased by $ 1.9 trillion in just that year to $ 12.4 trillion. In the next ten years the US debt is forecast to reach $ 25 trillion. And this doubling of the debt does not include any funds to prop up a bankrupt financial system or the spending of tens or maybe hundreds of trillions of dollars on worthless OTC derivatives. The forecast also assumes growth in GDP which is extremely unlikely especially for the next 2-5 years. Currently US Federal debt is six times what it collects in tax revenue every year. With debt exploding and tax revenues collapsing, there is no chance that the debt can ever be repaid with normal money. Also, with debt out of control interest rates will rise substantially to 10-20% per annum. Applying a 15% interest rate to a $ 25 trillion debt would give an annual interest bill of $ 3.75 trillion which would be substantially more than tax revenues.
The chart below shows the US Federal Debt per person. In the last ten years it has gone from $ 20,000 to $ 40,000. Total US debt, including private and corporate debt as well as unfunded liabilities, comes to $430,000 per individual. It is an absolute certainty that every man, woman and child in the US cannot pay off almost half a million dollars with normal money. Only massive money printing will take care of that.
http://matterhornassetmanagement.com/wp-content/uploads/2010/02/debt.per-person-10.2.10.gif (http://matterhornassetmanagement.com/2010/02/11/sovereign-alchemy-will-fail/debt-per-person-10-2-10/)
With these levels of deficits for the next ten years on top of an already massive debt, there is no possibility whatsoever that the US economy can avoid bankruptcy. No country has ever abolished debts of this magnitude by printing paper and the US will not be the first one to succeed either.

Only Lose – Lose Options

Governments have two choices – continue to borrow and print money or reduce government spending. This is a lose – lose situation and whatever choice they make it will end in disaster. Countries within the EMU like Greece or Spain are introducing austerity programmes that forecast their deficits to come down to 3% of GDP which is the EU maximum deficit limit. These are totally unrealistic targets that are mainly based on an improvement in the economy which is total fantasy. The dilemma is that not one single country within the EU is below the 3% limit, not even Germany. And the effect of the austerity programmes will lead to such a major contraction of the economies that tax revenues will collapse, further exacerbating the plight of these countries.
The alternative is to print or borrow more money. Printing is not a luxury that individual EMU members have and for these insolvent countries to borrow money is becoming almost impossible or very costly. But the European Central Bank can print money and this is likely to be the path they will initially choose to save Greece and possibly Spain. Countries like the US and the UK can still borrow and print money. And this is what they will continue to do. With rising deficits, rising unemployment and the problems in the financial system re-emerging they have no choice. Both the UK and the US are set upon a course of self-destruction. We will see trillions of pounds and dollars printed in the next few years. But the only buyers of these government securities will be the US and UK governments. The rest of the world will dump their holdings which will result in both the dollar and the pound dropping precipitously and interest rates rising substantially.

More......http://matterhornassetmanagement.com/2010/02/11/sovereign-alchemy-will-fail/

skijake
12th February 2010, 11:10
Great posts Relayer, as usual.
Thanks for supplying them.
Sure the ups and downs of the spot price of Silver are exciting but this is the driving force behind the moves we will witness in PMs in time.
Stay on your feet and stay alert.

of one mine
12th February 2010, 11:46
The news this morning is already confirming interest rates to rise. I think we are headed on an unfruitful path the tensions brought on by Iran and a possibility of Isreal invading or attacking is also going to impact economically possibly starting WWIII. No telling right now what will happen but safety is the best policy for your funds(PM's). And store up for the winter. In other words hard times will get harder.

of one mine

GV_silvergold
12th February 2010, 12:17
I find the doomsayers to be overly dramatic. I could be wrong in my read. I'd like to share some of my own thoughts.

I think governments are pursuing a policy of inflation, which is a cheap way to pay back debt. Over the years, many countries have experienced massive inflation, and they emerge just fine within a short time frame. Look at some latin American countries. Lovely countries, for the most part, content people. Look back in just recent times and you can find instances of 1000% inflation per month. Now that is a massive catastrophe for sure, but how do they bounce back so fast? Look at Thailand in 1997. That was the be-all-end-all financial collapse. But life went on for Thais, and within just a year or so it was going along strong. Same thing for Indonesia. Their rupiah, practically overnight, lost around 5x it's exchange value. Prices went up, there was a short term (like a few months) struggle, and now things are just as they were.

So this guy can predict massive collapse, but will it be like in other countries? Because for them, it didn't take long to dust themselves off and get back to life as it was.

America has a massive farm sector, the ability to literally feed the world. It's very efficient. We have good infrastructure. Everyone needs to eat. As long as Americans are wise to our resources, and craft strict laws preventing foreign ownership of our farms, water resources, fishing rights, we'll be fine even with a massive dramatic "collapse" that this guy predicts. How do others emerge so well?

PlataTruth
12th February 2010, 12:40
Things will change for the majority that is certain. In Latin America and most far east countries they have two classes, Rich and Poor. The rich were able to avoid the financial collapse and the poor, well they had nothing to lose anyway. The middle class will bare the brunt of this collapse, our life savings will be wiped out. To say we will bounce back is naive. We will pay once again for the errors of our governments and the rich will get richer. Be prepared, buy and hold.

GV_silvergold
12th February 2010, 12:47
Things will change for the majority that is certain. In Latin America and most far east countries they have two classes, Rich and Poor. The rich were able to avoid the financial collapse and the poor, well they had nothing to lose anyway. The middle class will bare the brunt of this collapse, our life savings will be wiped out. To say we will bounce back is naive. We will pay once again for the errors of our governments and the rich will get richer. Be prepared, buy and hold.

I have mortgage debt. In the event of massive inflation, I should be covered to some extent because that debt will be far easier to pay back. Am I missing something? My parents, on fixed income, will be SCREWED completely. They were complacent too, as neocons and other rotten politicians ran over us.

silverheartbone
12th February 2010, 13:19
I have mortgage debt. In the event of massive inflation, I should be covered to some extent because that debt will be far easier to pay back. Am I missing something? My parents, on fixed income, will be SCREWED completely. They were complacent too, as neocons and other rotten politicians ran over us.

I'd say that you probably missed something (http://news.google.com/newspapers?nid=1298&dat=19811001&id=KHQQAAAAIBAJ&sjid=m4sDAAAAIBAJ&pg=6880,66207).

Did you ever read your mortgage?

I read mine and there were things that I could not comprehend what was being communicated,
so at closing I asked the meaning.
No one there at the closing knew the answers
although it was the standard mortgage language and forms.

Just you wait until the next round of high interest (http://news.google.com/newspapers?id=Egc0AAAAIBAJ&sjid=YCMIAAAAIBAJ&pg=2728,81386&hl=en) rates.

PlataTruth
12th February 2010, 13:25
You dont actually think they will make it easier for US to pay back our debt? Along with massive inflation will be the rising of interest rates to ensure your debt rises just as fast as the money supply. Debt is the anchor around our necks and the water is rising fast. Real money (PM's), hard assets, commodities are our only financial savior. Reduce your debt, I fortunately have none and am waiting, have been waiting for a long time knowing the devaluation is coming. Have strength in family, friends and knowledge as it has been, and will be again. God bless. Prepare for the worst and hope for the best.

GV_silvergold
12th February 2010, 13:29
I'd say that you probably missed something (http://news.google.com/newspapers?nid=1298&dat=19811001&id=KHQQAAAAIBAJ&sjid=m4sDAAAAIBAJ&pg=6880,66207).

Did you ever read your mortgage?

I read mine and there were things that I could not comprehend what was being communicated,
so at closing I asked the meaning.
No one there at the closing knew the answers
although it was the standard mortgage language and forms.

Just you wait until the next round of high interest (http://news.google.com/newspapers?id=Egc0AAAAIBAJ&sjid=YCMIAAAAIBAJ&pg=2728,81386&hl=en) rates.

Heartbone, that is fascinating. Is it an isolated case? I have a 30 yr mortgage and just assumed that it was rock solid and can not change for the 30 year term.

I have thought for a very long time that due to the so-called "crowding out effect" that rates would go much higher. But they haven't. One reason I like silver and gold right now is the fact that the bank will not pay a reasonable interest rate on deposits.

Thanks for your response.

DaBrownsRPhat
12th February 2010, 13:47
Things will change for the majority that is certain. In Latin America and most far east countries they have two classes, Rich and Poor. The rich were able to avoid the financial collapse and the poor, well they had nothing to lose anyway. The middle class will bare the brunt of this collapse, our life savings will be wiped out. To say we will bounce back is naive. We will pay once again for the errors of our governments and the rich will get richer. Be prepared, buy and hold.

Plus just some quick things.

America's economy is over 3/4's based on comsumerism, buying junk. We are not an agricultural society.

Foreigners already own tons our our land and resources.

Our government likes to make things worse than they already are.

The average Joe on the street probably couldn't grow one plant, let alone grow food enough to survive on. (Again who owns enough land to do that anyway, and from those who are still paying a mortgage.)

If hyper inflation hits, things you will need will also go up, as well as the money supply, so your thinking about the mortgage is right, but not thought all the way imo.

You also seem to not understand or are down playing the hardships people, all people, the average person went through and are still going through in some areas in those examples. From the macro perspective, things may seem like they are back on track, but tell that to the guy who along with his family is checking their back before walking up to their house to make sure they are not going to be jumped. Or wanting to stay home instead of risking walking around the neighborhood.

I don't know your personal experiences at all, but many Americans would not do too well in that situation imo. Too used to going to McD's and grabbing something to eat, or buying steaks at the grocery without even knowing, really knowing, where it came from or how it got there.

This brings up something that I have been thinking about recently. It is sad that for thousands of years Earth has been the home of humans. Humans knowing how to grow food, process food, preserve food, and cook food. Let alone building their home or shelter themself, repairing things or using natural things as tools, etc. The Earth is our home and the majority of Americans wouldn't be able to survive in the wild (without luxeries like electricity, gasoline, Home Depot, Kroger, etc.) eventhough we evolved from it.

Jake
12th February 2010, 14:12
``````````````

DaleFromCalgary
12th February 2010, 14:39
"Jim has years of financial experience, has knowledge, a window into the world of business/economics"

Him and Ted Butler have cried wolf once too often for me.

akak
12th February 2010, 14:45
"Jim has years of financial experience, has knowledge, a window into the world of business/economics"

Him and Ted Butler have cried wolf once too often for me.

Dale, I hope you aren't going all 'Duneyman' on us!

But seriously, I also have been put off by Sinclair's and Butler's repeated cries of imminent market meltdown in the past. Whatever happened to Sinclair's "dollar death countdown" from last year, which I believe was up in November?

PlataTruth
12th February 2010, 15:43
I am far from the Mad Max, total financial meltdown supporter, but I do believe the Governments will attempt to inflate away their/"our" debts thereby completely eroding our savings and standard of living. It is all they know how to do, fiat the disease and cure.

DaBrownsRPhat
12th February 2010, 16:20
I am far from the Mad Max, total financial meltdown supporter, but I do believe the Governments will attempt to inflate away their/"our" debts thereby completely eroding our savings and standard of living. It is all they know how to do, fiat the disease and cure.

Except they do not understand it isn't a cure. ;)

ragnartrading
13th February 2010, 21:32
I am very optimistic on European and especially Eastern European countries economy in no too distant future. Once this government debt issues finally collapse ( clean up the hard way & quicker) they have much better starting point than USA. Unlike in US where government is in deep debt and citizens too, back in Eastern Europe only governments are drowning in debt. Most of the people are debt free, never had true credit card, their houses are mortgage free and majority is renting. While living in US , I still keep close contacts with my former partners and collegues many of them are very successful business owners , some of them are just emloyees, but while carying plastic and calling it a "credit card", what I found out it is actually just bank debit card.
My point is that once the governments get away of messing thing up, the people will be able to move forward quicker and more freely than in USA or UK.

Just my 2 cents...

Relayer
13th February 2010, 21:51
Dear CIGAs,
BlackRock sees the seriousness of the Greek bankruptcy situation when they compare it to the Lehman collapse. It was the flushing of Lehman that was the accelerating event of the Western World’s banks (OTC derivative) melt away, not down.
If the Dark Side can break Greece, using Germany, propaganda and the rating agencies as the tools, it will be open season on six of the weakest countries debt next. More depends of the resolution of the Greek situation than Greece and the euro.
This has to be payback time, simply as voyageurs, when a popular US personality broke Asian debt in much the same way.
Weak and strong is defined as debt versus GDP as a percentage. Then comes the dollar because of its outrageous (for a major currency) debt to GDP as a percentage position.
Save Greece, and the West advances at warp speed towards a form of Western world Weimar. We are damned if we do, and immediately damned if we do not.
BlackRock may be betting on the spread of "Extend and Pretend" regarding Greece. This is the most shocking time in the history of fiat currency. This is the ending phase of the floating exchange system as we know it, and all of it was arranged by the Dark Side for profit.
The sheeple sleep on.
JSinclair


BlackRock Says Greece Is No Lehman, Buys Its Bonds (Update1)

February 12, 2010, 12:17 PM EST
by Anchalee Worrachate



Feb. 12 (Bloomberg) -- BlackRock Inc., the world’s biggest asset manager, increased its Greek bond holdings, betting the European Union won’t allow the nation to default as Prime Minister George Papandreou cuts the bloc’s biggest deficit.
The company has a so-called overweight position on Greek debt, holding more securities than allocated in its benchmark, even after Standard & Poor’s, Fitch Ratings and Moody’s Investors Service cut the country’s credit grades in December. The fund may continue with this strategy for “some time,” said Michael Krautzberger, co-head of European fixed-income in London, after EU leaders pledged yesterday to help Greece regain control of its finances.
“They won’t allow a Lehman-type crisis,” said Krautzberger, who helps oversee BlackRock’s $3.35 trillion of assets. “The market has worried too much about an imminent government default in Europe that will not happen because of the solidarity.”
Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008. A government-led effort to rescue the securities firm proved impossible, according to former U.S. Treasury Secretary Henry Paulson.
German Chancellor Angela Merkel and her counterparts pledged “determined and coordinated action” to support Greece’s efforts to regain control of its finances. They stopped short of providing taxpayers’ money or diluting their own demands for the country to cut the budget deficit.
The statement lacked specifics and officials are now working on measures such as establishing a lending facility for Greece, with each country making a contribution according to its size, an EU official said yesterday on condition of anonymity.


‘Ready to Help’


Greece, representing 2.7 percent of the euro region’s $13 trillion economy, posted a budget deficit of 12.7 percent of gross domestic product in 2009, the highest in the euro’s 11- year history and more than four times the EU’s 3 percent limit.
The yield premium that investors demand for holding 10-year Greek bonds instead of benchmark German bunds increased 20 basis points to 293 basis points at 4 p.m. in London. It has narrowed 69 basis points since Feb. 8.
“There’s still potential for Greek bond yields to fall further now that it’s clear the EU is thinking of measures to deal with the problem,” Krautzberger said in an interview yesterday. “The plan might not be very specific yet, but there’s no doubt at this point they stand ready to help.”
Greek bonds handed investors a loss of 0.76 percent this year, the second-worst returns after Portugal, whose bonds lost 1 percent, according to Bloomberg/EFFAS indexes. The top performer in the euro region is Austria, whose bonds returned 1.98 percent.


Relative Value


The decision to be overweight Greek bonds was also driven by the securities’ value relative to bonds issued by other European countries, said Krautzberger.
Concern over Greece’s deteriorating finances pushed the 10- year bond yield to 7.16 percent, the highest since 1999, on Jan. 28. Portuguese bonds of the same maturity yielded 4.40 percent on the same day.
“Until recently and before the rally, Greek yields nearly doubled those of Portuguese bonds in some parts of the curve,” said Krautzberger. “Portugal might have slightly better fundamentals, but they are not that far apart.”
The market should shift its focus from default risks to the outlook for growth when governments start to tighten fiscal policy, Krautzberger said.
“What the market should worry about is the implication on global growth, inflation and various asset classes when all major economies have to start cutting back on their fiscal spending to stabilise the deficit,” said Krautzberger. “From that perspective, you may argue that Europe is better off.”




--Editors: David Clarke, Keith Campbell.

Relayer
13th February 2010, 22:40
said "Him and Ted Butler have cried wolf once too often for me."

I would agree with you on Ted B.

Now Jim S. is a different story. The fact that a large majority of people have not become aware of the problem does not mean the problem does not exist. He did not anticipate the ability of the government to BS the sheople into oblivion. He did not anticipate the degree to which the government would hide the problem of bank insolvency by allowing fantasy bookkeeping. That is what has caused his November09 warning to come and go. The result is the rally in the dollar, which of course is based on nothing but false confidence and manipulation of markets. This will prove to be another temporary rally in a bear market. Like I said in another post.....the longer people are asleep to the seriousness of the problems, the more likely the dollar will get hit hard and fast, shocking them awake.....alas too late to protect themselves!!

Maybe you arent one of the sheeple and have acquired the gold and silver, and whatever it is you think you need to be prepared. Maybe this lulls you into a sense of security; causes you to doubt what could happen tomorrow?

Not me. Even though I have literally put all my savings into gold/silver, it does not make me so confident about the future. I do hope what I have done to prepare at least puts a buffer between me and the worst of circumstances. I do not have a melancholic temperament, am not a pessimistic type person. My Avatar is a Yes logo.

Cup-of-Ruin
14th February 2010, 05:02
Pack your shiny, campers, 'cauze itz comin'....paper is gonna burn, all hell is coming, paper gonna burn ya see, in the furnace is where the gold and silver are refined, pure, unadulterated substance, the currency of kings and God Himself, fear not and stack, campers, this is the end but just the beginning.

DaleFromCalgary
14th February 2010, 10:04
"I have mortgage debt. In the event of massive inflation, I should be covered to some extent because that debt will be far easier to pay back"

It depends on when your mortgage comes up for renewal. Double-digit inflation leads to double-digit mortgage rates and a crash in house prices that will make the present kerfluffle look like a walk in the park. During the early 1980s, mortgage rates went up to 22%. I paid 17% for the first five years on my house (on a 15-year amortization), and 12% to 14% on subsequent renewals until I paid off the house in 1997. The only reason I could afford it was because I lived in the basement suite and rented out the main floor. This not only gave me rental income but because the main floor was half the house I could deduct half the mortgage payments (both principal and interest), half the utilities, and half the maintenance and repair expenses. Most people today live in single-family homes, so they won't have the deductions as if it were a rental property.

This is why I am 10% in physical gold and working towards the same in silver and palladium. As inflation spikes, only commodities and bullion store value for conversion into fiat currency when needed.

GV_silvergold
14th February 2010, 12:51
Dale, thank you very much for sharing your thoughts. We likely have a lot in common. I'd like to continue the conversation, if you have the time. More details:

My mortgage debt on main residence is now in a 30 year "fixed" term at about 5%, about $2000/mo. I can't imagine the mortgage holder changing the fixed rate. Can you?

I also own a large house which was converted to a duplex (similar to the setup you described). Someday I may move there and rent the basement. It's very well-built and I owe about $200k left on it, also 30 year fixed. Fully occupied always, I pay mortgage about $1500/mo. Rental revenue is about $1900. So I am +$400 on that per month, and I get some tax benefits. I have enough cash now to pay off the balance loan on this, rate is 5.75%. I am earning almost 0% interest on my CDs. So I have thought about moving my cash into paying this off entirely.

I don't care for the stock market, and have a strong desire to move a certain amount of cash into precious metals as an insurance policy, rather than using call cash to pay down debt. It would seem more prudent to move into gold/silver rather than paying down mortgage debt, assuming you believe that inflation is on the horizon.

DaleFromCalgary
14th February 2010, 14:10
"It would seem more prudent to move into gold/silver rather than paying down mortgage debt, assuming you believe that inflation is on the horizon."

I never bought oil or bullion until after I paid off my mortgage. I just don't like any kind of debt hanging over me, because it means one is beholden to the creditor.

However, it may be that circumstances are different now for peoples' comfort zone. My mortgage was in the days of double-digit interest and price-suppressed gold. Even after I began investing, I didn't get into bullion until a few years ago because I was buying physical conventional oil (mineral rights, limited-partnership units, and other private-equity). Eventually it became too difficult to find any good private oil deals because most of them are snapped up before anyone else hears about them. I've only been able to find about one oil purchase a year for the past few years, so I started putting my royalties into bullion.

To me, it doesn't matter whether we get inflation or deflation. Bullion protects against both in the long run. Nor do I worry about a sudden crash. My belief is that we will slowly step down a staircase rather than fall off a cliff.

Relayer
14th February 2010, 14:48
Whether its long term inflation or hyperinflation, mortgage debt becomes harder to pay. The cost of living/providing everyday items go so high that you will not have the money to make your mortgage payments. This is true as applied to all debt. Debt will be a burden unless you have little of it. Those who have posted to be out of all debt are most correct. Debt is a transfer of wealth. The idea that it is okay to live with just a little of it 2%-4% is propaganda. The idea that inflation hasnt been a problem over the last 10, 20, 30 years is propaganda and not proven by the facts.

I posted these before, here they are again. Look at the increased cost of housing compared to income. Compare the charts themselves.


http://forums.silverseek.com/attachment.php?attachmentid=1378&stc=1&d=1266176605






http://www.dollardaze.org/blog/pages/00023/SmallGlobalMoneySupply.png

http://www.dollardaze.org/blog/?post_id=00747

Relayer
14th February 2010, 14:59
said..."My belief is that we will slowly step down a staircase rather than fall off a cliff."

Relayer: thats just what the government is attempting to get people to believe. They are in control of the financial problems. They have proved it by the recovery of the banks, the system, the market. Dont believe it.

They cannot control what is clearly now out of control and beyond fixing.

Sakata
14th February 2010, 15:56
said..."My belief is that we will slowly step down a staircase rather than fall off a cliff."

Relayer: thats just what the government is attempting to get people to believe. They are in control of the financial problems. They have proved it by the recovery of the banks, the system, the market. Dont believe it.

They cannot control what is clearly now out of control and beyond fixing.

Chances are it will be a staircase. With each step being so big we fall down it with a huge thud, just before the next step arrives. Occasionally we will not be able to stop ourselves and we will fall down several steps at the same time.

Ardent Listener
14th February 2010, 16:11
I don't pretend to know if this is the end or not, but I'm speeding up on my preps plans, hoping for the best and planning for the worse.

cabtrom
14th February 2010, 16:53
Fanny & Freddy own most of the mortgages. Not sure mortgages will be a big deal. at some point they'll be paying people to stay in the homes. As for credit cards, Id max those bitches out and then default. Lets be honest who really gives a **** anymore? should I care if I cant pay these assholes back when THEY ARE the reason I cant pay them back. all I hear is "if we didn't bail out the banks we would have had a great depression" well who gives a ****, at least it would have been real. Our lives have all become a big financial lie! sucks if you got kids, a mortgage and a car payment. I think a coming financial collapse will be our finest hours. now, stop panicking and have a drink.

Relayer
14th February 2010, 19:33
thats an interesting way to put it~!~Could very well be what happens.

DaleFromCalgary
14th February 2010, 19:42
"Not sure mortgages will be a big deal. at some point they'll be paying people to stay in the homes. As for credit cards, Id max those bitches out and then default."

I don't know American law but in Canada all mortgages, credit card debts, and personal loans are recourse loans, meaning you can't walk away from them. Banks or their collection agencies will follow you and garnishee your wages, freeze your bank accounts, and get court orders to search your premises for valuables.

This happened in the early 1980s when many Albertans thought they could walk away from houses after the last oil boom collapsed. Before anyone says that there will be too many defaults to handle, I had relatives in the banks back then who told me that they high-graded the best defaults (likely to provide the greatest recovery) for themselves and sold the rest to collection agencies. One of my co-workers had bought Dome Petroleum shares on margin just before they went bust. He spent the next decade paying off that loan, with interest, but fortunately the stock broker gave him the time to pay in small installments instead of seizing his assets.

Relayer
14th February 2010, 20:54
Posted: Feb 14 2010 By: Jim Sinclair Post Edited: February 14, 2010 at 6:20 pm

Filed under: In The News (http://jsmineset.com/category/in-the-news/)

Dear CIGAs,
Rome (then the Western world) is burning!
Just like minorities did not see or wish to understand what the rise of Hitler meant to them, just like those that ran out onto the new beach revealed as the water retreated from Hawaiian beaches only to be inundated by the Tsunami, many are ignoring the organized and strategized attack now on Greece as the prelude to an attack on Spain, Italy, Ireland, Portugal and then major debts.

The US stands third in the line of weak structures, debt to GDP, and will come under attack by the ever-increasing wealth of the bear raiders via the CDS OTC derivative market.

Iceland, the weakest of all, was taken down. Now the target is Greece. Just as Europe fell to the Nazis, so might it to the Blitzkrieg by financial entities.

When J.P Morgan, the man, sought to settle a liquidity crisis, he asked Jesse Livermore to come and visit with him. He proposed that the famous Bear, Livermore, cease his short raids for the benefit of the country. Livermore, impressed by Morgan’s appeal, did so.

Quite to the contrary, we have made the most successful of the short raiders (derivative manufacturers) rich, and taken no meaningful action to restrict their mode of doing business.

Rome is burning and few understand why. Even less give a damn.

Relayer
14th February 2010, 20:56
Margin of Risk
Posted On: Saturday, August 16, 2003
Author: Jim Sinclair

Q: Jim, you used margin when you where building your foundation. I am young and willing to accept risk. So Jim, what's your problem?

A: Let me answer your question under two subheadings for simplicity's sake.


Responsibility

Few who write on the Web fully recognize the responsibility they have to their readers. I would also suggest that this statement applies equally to those in the print and electronic media as well. In contributing to the debate on questions of the day - whether they be economic, political, or both - you need to consider your words with attention and care, especially when someone else's livelihood is at stake.


Training

My father is Bertram J. Seligman. From simple observation and a study of history, I believe he was the greatest trader that ever lived. Yes, greater than Jesse Livermore who befriended Bert because of his talent.

Bert traded like an old master painter. He used to trade 10% of the NYSE's volume and ended the day with a 500 share position. He taught me to trade from as far back as I can remember. I sat beside him in the car, in the office, and in the house.

We failed miserably as father and son but succeeded beyond anyone's wildest imagination as partners. He was also a business man. He financed the first movies in aircraft via "In-flight Motion Pictures, Inc." He put the first refrigeration device in trucks via "Thermo King Inc."

A partner of Smith Barney who ran its trading department had inadvertently become a controlling shareholder in a small company and called Bert when the company asked him to lower his position. Bert took on the man's entire position and control of the company and went on to promote Dr. Land's new camera. The company eventually became Polaroid and Dr. Land visited my home on several occasions.

Bert financed a company that had invented a feminine hygiene product called Pursettes which was sold in the U.S. through the 1960's and 1980's. One of the great fortunes he made was in a metals company called Strategic Materials.

He was also a partner in deals and trading operations with Jesse Livermore, Old man Kennedy and Arthur Cowen. He invented what is today called the NASDAQ.

At my request, he left me totally out of any financial or material inheritance, having given me more than that: the knowledge to spot value in businesses and - more importantly - how to trade for a living.

I was in a trading department when I was 12 years old. At 19, I was an over-the-counter market maker maintaining 35 markets. That is the training and qualification you need to handle huge margin positions.

During the entire gold market [of the late 80s presumably], I never got a margin call - not because I never made a mistake but rather because I margined myself and if a call was pending I liquidated my holdings before the close of that trading day.

I am trained to be a survivor in a battle that takes no prisoners. You may not be. I live markets day and night. I come from the lineage of Jesse Seligman and a famous banking family.

Now you will love this. The Cartel of Common interest [The (Gold) Cartel of Common interest is apparently a term that Jim Sinclair used in the 200-2003 timeframe.] is comprised largely of Seligman firms. Yes, my ancestors founded them all except Merrill. Goldman and Lehman are my family's. Many of you made fun of me when I first told you those cartel members had met their match. Well, they have. They face the bloodline of their founder and did not know it until know.

Read the book, "Our Crowd," by Stephen Birmingham and it's all there. Markets, metals and entrepreneurialism course through my entire body not just my blood. The market is my mistress but compared to the real life equivalent I thrive on the volatility associated with this one.

I am committed totally to markets. I love risk and feel alive only when all is committed. Absolutely nothing else in the material sense interests me. Now that I have played the material game, even that no longer interests me. Money does not interest me. I have given away much more than I have. The game interests me. The game is called building companies and trading markets.

Now I am passing my love of this business on to whoever recognizes the gift and is willing to run with it. My two youngest children have chosen to go their own routes outside the financial sphere and my eldest daughter is in my service in Africa. She is an adventurer in her own right but remains uncomfortable with the intensity I show when the bell rings which is her feminine prerogative.

For the curious, my name has been James E. Sinclair since the day I was born. My mother was Abbey's Irish Rose.

A recent Interview with Jim. He discusses his father and Livermore and trading.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2009/11/13_Jim_Sinclair_files/Jim%20Sinclair%2011%3A13%3A2009.mp3