Posted on 06/16/2005 2:34:00 PM PDT by BringBackMyHUAC
Thursday, June 16, 2005
Establishment Beginning to Pay Attention
Author: Jim Sinclair
Since May the establishment has quietly begun to listen and will continue to do so.
What I told you would transpire has in fact happened. You know this by the courage of Mr. Peter G. Peterson, a man of such stature that when speaking on financial TV he cannot be interrupted by producers who don't like his script. That is not to say that the drop dead, beautiful, central-casting interviewer did not try to place words in this gentleman's mouth. That strategy fell flat on its face.
Mr. Peterson is the Chairman and one of the founders of the outrageously successful Blackstone Group. He is Chairman of the Council of Foreign Relations, founding Chairman of the Institute of International Economics (Washington DC), founding President of the Concord Coalition. Mr. Peterson was the Co-Chair of the Conference Board Commission on Public Trust and Private enterprises (Co-Chaired by John Snow, currently Secretary of the US Treasury). He was Chairman of the Federal Reserve Bank of New York from 2000 to 2004.
Mr. Peterson spoke of his close and personal relationship with Federal Reserve Chairman Greenspan. He made many extremely important points in his conversation:
1. He spoke of three serious deficits, the Budget Deficit, Trade Deficit and what he considered to be the most important, the Current Account Deficit.
2. He added to these deficits what he considered to be just as important, the deficit in personal savings by US consumers.
3. He pointed out that a cumulative Budget Deficit of US$7 trillion was looming in this generation.
4. He spoke of Chairman Volcker's opinion on a lower US dollar.
5. He spoke of a prestigious group of 12 people and their views on the US dollar of which 11 expect it to go between 10 and 15 percentage points lower.
6. He pointed out that a Current Account Deficit running at 6 ½ percent of GDP must be considered as another cumulative item that will result in a foreign debt equal to 125% of a single year's GDP.
7. He pointed out that the servicing cost of this debt is a factor and possibly the most serious concern.
8. He concluded with the comment that expectation that international entities will continue to support this growth and the cumulative nature of the Current Account Deficit by purchasing US debt is not necessarily guaranteed.
The beautiful lady interviewer - visibly unsettled - broke for an advertising sponsor promising to have Mr. Peterson back. We have not seen Mr. Petersen yet and an hour has passed.
Axiom number one of a generational bull market is that the Gold Community is either out of the market or totally committed and as a result is no factor in the major upward move in gold and precious metals shares.
Axiom number two of generational bull markets in gold is that the major move in both gold shares and gold itself is the establishment - not the so-called Gold Community.
The establishment will listen to Mr. Peterson. The move toward gold by the big guns has started. The shorts are cunningly trying to cover. It is only six short months until 2006 is upon us. In my opinion, 2006 to 2008 will be our best years ever.
Wait until 1/1/06 and you will find you are much too late. Things always start quietly before it becomes apparent. People trying to time the market perfectly are going to be left behind in the comet's debris trail.
The establishment interest has started. It took form last May in the majors and is beginning now in the juniors - not January 1st, 2006.
Got gold?
For gold's versus the dollar, see the following chart. Notice how gold and the dollar are the inverse of each other. But now gold is beginning to rise WITH the dollar. This means that, at least for now, gold is beginning to assert itself, and will continue to do so for some time IMO.
http://www.a1-guide-to-gold-investments.com/images/Gold-Dow-USD-5yr.gif
Sorry, it'll ALL be worthless soon enough. Water, food, and ammo will be the currencies of trade.
I've 'got gold' but be careful who you are listening to. These guys are big gold marketers, so some of their advice may be oriented toward lining their own pockets.
1. He spoke of three serious deficits, the Budget Deficit, Trade Deficit and what he considered to be the most important, the Current Account Deficit.
2. He added to these deficits what he considered to be just as important, the deficit in personal savings by US consumers.
But will you be able to keep any land without having gold to ride up as the currency slips down? Or will the bank be putting you to work as a share-cropper, getting their land ready to work?
==I've 'got gold' but be careful who you are listening to...
You are, of course, correct. That's why I posted an article from a non-profit site. Here is his bio, and as the last paragraph makes clear, he operates his site purely as a public service:
Jim Sinclair is primarily a precious metals specialist and a commodities and foreign currency trader. He founded the Sinclair Group of Companies (1977), which offered full brokerage services in stocks, bonds, and other investment vehicles. The companies, which operated branches in New York, Kansas City, Toronto, Chicago, London and Geneva, were sold in 1983.
From 1981 to 1984, Mr. Sinclair served as a Precious Metals Advisor to Hunt Oil and the Hunt family for the liquidation of their silver position as a prerequisite for the $1 billion loan arranged by the Chairman of the Federal Reserve, Paul Volker.
He was also a General Partner and Member of the Executive Committee of two New York Stock Exchange firms and President of Sinclair Global Clearing Corporation (commodity clearing firm) and Global Arbitrage (derivative dealer in metals and currencies).
In April 2002, shareholders of Tan Range Exploration approved the acquisition of Tanzania American International, a company controlled by the Sinclair family, for shares in Tan Range. Following this transaction, Mr. Sinclair became Chairman of Tan Range and now leads its efforts to become a gold royalty company.
He has authored numerous magazine articles and three books dealing with a variety of investment subjects, including precious metals, trading strategies and geopolitical events, and their relationship to world economics and the markets. He is a frequent and enormously popular speaker at gold investment conferences and his commentary on gold and other financial issues garners extensive media coverage at home and abroad.
In January 2003, Mr. Sinclair launched, "Jim Sinclairs MineSet," which now hosts his gold commentary and is intended as a free service to the gold community.
==Land and putting it to work (or at least maintaining its readiness to work) is the one greatest investment to fall back on in the roughest of times, IMO.
In the short run (next couple of years, and for as long as it takes for it to recover), the housing and land markets are poised for a major crash. That is, once the TIC shows negative numbers three time in a row. It has already done this twice. That is one of the reasons why gold is appreciating at the same time as the dollar is appreciating. Although, the dollar rally is only temporary IMO. Look for it to start declining fast in the very near future (again, IMO).
I agree with all of what you wrote for "the short run." Predictions are predictions, but your guesses look really well researched. And yes, I was talking about the long run while alluding to artificial markets.
And canned fruit. Don't forget canned fruit.
Is he perhaps referring to Chairman Greenspan? Chairman of the Federal Reserve?
I wouldn't ask for Paul Volcker's opinion on the weather let alone monitary issues.
And canned fruit. Don't forget canned fruit.
psst... toilet paper?
And toilet paper. Two-ply will be worth it's wait in gold.
Sorry about the tardiness of my reply to your ping (I have no idea who you are), but you are spot on...There is a guy who buys time all over the radio spectrum (the Goldline International's Joseph C. Battaglia), this dude, every time I listen to him, mixes his gold pitch with some of the most anti-Bush, pro-leftist drivel one could imagine. I think he intentionally wants the country to fail so gold skyrockets.
The gold sellers love Volker; he made them a mint, and then some when he was chairman.
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