I was reading an interview in which Jim Sinclair stated the following about QE



FM: So they turned your theory around by intervention in interest rates?

JS: Artificial non-economic buying of government debt. If the Fed was not in the market doing what they are doing, rates would be wild. That is why some of the greatest names in the bond market have failed when they went bearish in bonds last year and they are more cautious this year. There are reasons to be bearish, but you can’t be bearish in light of QE. You don’t fight the government or fight the Fed. If you do that you stand in front of a locomotive, a locomotive [currently] dedicated to keep interest rates low.

FM: Is that a good thing?

JS: It is a necessary thing. Anybody who says that Bernanke or the U.S. Fed acted ineptly is not a practical person. They did what they had to do. If they had not performed as they did and as they are right now, circumstances would not be tolerable. They did what they had to do.

FM: Is it sustainable?

JS: No. Historically debt has to be paid and if you have financial difficulties, you can inflate your way out of it or deflate your way out of it. Historically inflating your way out of it has been the method chosen because of political prerogatives. The whole theory of kicking a can down the road is, economics will recover in order to heal the balance sheet problems, therefore making the methods used in monetary stimulation self-canceling Bernanke has done exactly what he had to do. If I was given the job of saving the financial industry in 2008 there was no other alternative. The whole thesis of that alternative is you do save business, and business turns. And because of the positive nature of the underlying business having turned, the liquidity can be drained practically without stopping the forward progression. That point hasn’t been reached. You are trying to play a symphony and if we [have] an economic recovery of significance, the symphony can be played. The reason gold is at a pause point is because there is an assumption that business activity is reaching a point that is take-off speed for recovery. That is the psychology of the marketplace. Gold is a reflection of that as a currency in competition with the U.S. dollar. Gold has a mind of its own, and it is to balance the international balance sheet of the United States or whatever the reserve currency is.

FM: What is it telling us now?

JS: What gold telling us now is the concern over [the] crisis is somewhat less, yet the underlying necessity of an economic recovery, which would be self-canceling in terms of liquidity injected into the economy via balance sheet repair, has yet to surface fundamentally. That battle will be fought in the relationship between the dollar and gold, and it will be determined in 2012, one way or the other. The bottom-bouncing we have been doing is not sustainable for a full year. One side of the team is going to win and one side of the team is going to lose. The swing factor is U.S. economics. If U.S. economics were to significantly improve, then there would be balance sheet repair. Then the dollar would be in a macro sense repairing itself, not requiring injections of liquidity to maintain the status quo. When the liquidity comes in only to fill a hole of loss in a banking system, net net zero. That is not going to make those banks lend anymore to individual businesses.


I find these sections of Jim quite gold cautious if not outright bearish!

More from the same interview
FM: Can’t we just maintain this moderate recovery?

JS: Carry-on of a moderate recovery would keep us doing this great choreographer’s financial dance that might work, but it doesn’t take us out of a situation where there are significant risks. When you put this much money [into] an economy, you should get a recovery much stronger than we have. That is why Bernanke was so surprised it didn’t occur. The reason why it didn’t occur is because the money went into the banks to fill a black hole or to make a derivative perform when the counterparty was insolvent. Anybody who says Bernanke is a dope or didn’t react properly is a fool. He did what he had to do.

So as I understand from the last paragraph he is saying if the economy does improve no QE and gold loses? If this is in fact what he his saying he is hedging his bets against QE to infinity?

If I am correct in my interpretation we will no longer be reading or hearing his QE mantra ( to infinity )?

This was very very revealing

FM: Where is gold going this year?

JM: I am looking for the real range for gold, post-June, being $1,700 on the low end and $2,100 on the high end. We have a strong dollar policy that is interpreted as not allowing the dollar to drop precipitously but intervening to moderate the decline. We also have a weak gold policy, which is not to depress the price of gold but to intervene in the gold market so it doesn’t start screaming to extreme prices. The primary level it must not go above is $1,764 but that will fall in time and the next level after $1,764, I assure you, is $2,111 it must not go above. That is the weak gold policy and you do have the legal intervention in those markets by the Exchange Stabilization Fund and other entities. The Exchange Stabilization Fund is run by two people, the President of the United States and the Secretary of the Treasury.

What you don’t want gold doing when you are trying to calm the system, is go ballistic. Our entire world is a sea of algorithms and the people who intervene in the markets are more savvy than your general hedge fund industry. So the weak gold policy is not a policy to decrease the price of gold but a policy to prevent it from being a tattletale at the wrong time. Right now they think $1,764 is tattletaling and that has been the swing point for gold ever since it broke over $1,650.

Samix where is all this from?

We also have a weak gold policy, which is not to depress the price of gold but to intervene in the gold market so it doesn’t start screaming to extreme prices
...
That is the weak gold policy and you do have the legal intervention in those markets by the Exchange Stabilization Fund and other entities. The Exchange Stabilization Fund is run by two people, the President of the United States and the Secretary of the Treasury.

If this is taken as fact, then this would mean that our elites are in complete control of the gold price, for they are intentionally allowing gold to rise slowly and their intention is not a complete ambush.

The idea that I get from this interview by Jim Sinclair is that maybe he thinks that our masters are invincible and it is in our best interests to just play within the system that they create than fight against them ?

Seb1 wrote:
Samix where is all this from?

Sorry Seb, here is the full link www.futuresmag.com/2012/05/01/jim-sinclair-has-something-to-say

Samix, don't tell me I have been correct all along. Time to bail out of gold now? What about QE to infiniteeeeeeeee................

That article is dated May 1, 2012, just my luck, I am still in April and I am always behind the trend. Time to get out of gold now I think.

samix wrote:
This was very very revealing

FM: Where is gold going this year?

JM: I am looking for the real range for gold, post-June, being $1,700 on the low end and $2,100 on the high end. We have a strong dollar policy that is interpreted as not allowing the dollar to drop precipitously but intervening to moderate the decline. We also have a weak gold policy, which is not to depress the price of gold but to intervene in the gold market so it doesn’t start screaming to extreme prices. The primary level it must not go above is $1,764 but that will fall in time and the next level after $1,764, I assure you, is $2,111 it must not go above. That is the weak gold policy and you do have the legal intervention in those markets by the Exchange Stabilization Fund and other entities. The Exchange Stabilization Fund is run by two people, the President of the United States and the Secretary of the Treasury.

What you don’t want gold doing when you are trying to calm the system, is go ballistic. Our entire world is a sea of algorithms and the people who intervene in the markets are more savvy than your general hedge fund industry. So the weak gold policy is not a policy to decrease the price of gold but a policy to prevent it from being a tattletale at the wrong time. Right now they think $1,764 is tattletaling and that has been the swing point for gold ever since it broke over $1,650.

Samix, at times Sinclair drives me CRAZY - because what he SAYS lacks logical consistency.

This is a CLASSIC example. On the one hand, we have Sinclair acknowledging that John Williams' numbers are right on inflation. But THEN he goes and starts spouting this drivel about how "the U.S. recovery should be stronger".

What RECOVERY?????????




nowandfutures.com/images/pers_inc-expend_cpi_lies1963on.png

If you look at the REAL numbers on consumption there was never a "recovery".


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If you look at the REAL numbers with retail sales there was no "recovery".


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If you look at non-durable goods orders there was no "recovery".


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If you look at average wages there was no "recovery".

Meanwhile, in other recent commentaries I've NON-inflation based pictures on housing and ENERGY CONSUMPTION to also show that there was NEVER a U.S. "recovery".

You can't have a "recovery" with housing in a worsening depression. You can't have a "recovery" when the greatest energy glutton in the history of the world is now using much LESS energy. What's the U.S. economy "running on", consumer confidence?

By coincidence, I was just about to do a two-part series getting into this "lying with numbers" - and using many of the same pictures. So it IRRITATES me that it was necessary to essentially do this TWICE because someone like Sinclair who goes out of his way to cultivate an image of infallibility frequently gets VERY SLOPPY with his analysis.

:angry: :angry: :angry: :angry:

P.S. My "irritation" is directed at Sinclair, and NOT at BBC's readers/members...


:kiss:

P.P.S. The retail sales chart didn't show up the first time, let me try again:


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Not to worry Jeff I know I am sure I irritate you

Unfortunately people like JS do not realize how ditherers like me get a fair amount of comfort from what he says. If he is changing his tune he needs to be upfront about it.

On the other hand there is this:

www.commodityonline.com/news/gold-to-hit-$7000oz-bank-of-america-47690-3-47691.html