Jim Sinclair's Commentary:

Gold is at or very near its low.The following is one of the reasons:

Sprott warns of 'meltdown'
STEVE LADURANTAYE
August 1, 2008

North America is the midst of a "systemic financial meltdown," Eric Sprott warned yesterday as his company turned a quarterly profit of more than $11-million.

"I'm not trying to be shocking to anyone, but let's face it," said Mr. Sprott, chief executive officer of Sprott Inc. "When Bear Stearns goes down, Freddie and Fannie go down, and IndyMac goes broke, we have major issues out there."

Toronto-based Sprott runs mutual, hedge and offshore funds. Mr. Sprott said assets under management increased to $7.7-billion in the second quarter, up from $6.8-billion at the end of March, despite operating in what he called a bear market.

Profit was $11.4-million, or 8 cents a share, compared to a year-earlier loss of $7.7-million. Revenue - management fees, crystallized performance fees, gains or losses from proprietary investments, interest and other income - was $39.5-million. While the company charges performance fees, they are not calculated until the end of the year and are distributed as a special dividend.