Re: From Jim Sinclair - misc ramblings
in response to
by
posted on
Aug 13, 2008 05:43PM
Golden Minerals is a junior silver producer with a strong growth profile, listed on both the NYSE Amex and TSX.
Without going to any great length, to me this means several things, most notably the Fed eventually will be forced by the market to back the Dollar with a bonafide asset that has concrete value. The current backing of money with "the full faith of the Government" alone is no longer sufficient because the government blew it's credibility by allowing Wall St to scam the world selling them hundreds of Billions of worthless "AAA" rated Mortgage backed garbage that has never had any real value. Fool me once shame on you, fool me twice..... no way Josee. At any rate once Dollar growth is by necessity pegged to the intrinsic value of a Gold backing, the Feds will have free reign to further expand the monetary base - even significantly, to bail out & stabilize the line up of financials at the begging bowl window. You see without the ratio tie to Gold and having no backing, the Greenback is doomed to a sharp drop in the value of the currency at the very least, or could very well become a leading contender in the race to zero hot on the heels of the Zimbabwe dollar aka Reichmark of the 1920s. The good news in all this for us Gold bugs is the Gold Cartel *must* allow the POG to rise to sufficient levels to provide proper backing to the outstanding currency base, ie. to the revitalized M3 Sinclair speaks of, so this will create a predictable floor & ceiling in the POG and gone will be the days where we get creamed as in recent weeks. Bear in mind a lot of new Dollars will be issued in the years ahead to cover Derivative losses at the major financials, so a tie of M3 to the POG guarantees an ever increasing Gold price going forward until the Derivatives crisis ends, with the POG trading within a well-defined narrow band. After the bailouts are over, the trading range simply flattens out because of the tie to M3, but not until Gold has reached many thousands of Dollars per ounce. Now imagine how this stable yet sizeable POG environment going forward ad infinitum generates humungous profits for Gold miners and you have the recipe to make a vast fortune in your PFs. But there will inevitably be financial casualties along the way to fame and fortune, so it remains prudent to protect yourself in the ways that Sinclair has strongly suggested.