We are getting hit over the head with respect to both professional and anecdotal information emanating from many sources now with growing momentum that a new gold backed currency/standard awaits us soon. As usual, hindsight is illuminating. Jim Sinclair is always ahead of the game.Here is a brief review of Jim Sinclair’s remarks on gold since October alone:

"The US Dollar will replace the US Dollar come The Revitalized and Modernized Federal Reserve Gold Certificate Ratio, not tied to interest rates, but rather gold value held by the Fed/Treasury versus a measure of international liquidity

……I firmly believe the scams in gold, once disclosed, are going to set your hair on fire.

- These will take the form of no gold, gold certificates, paper gold rather than bullion confirmed as bullion to [...]

- An ex-Fed bigwig sees the solution as revaluing the gold on the books…..

- Posted: Nov 29 2008 By: Jim Sinclair

Jim,

"Mechanically, reverting back to a global gold standard would be straightforward. First, an intrinsic global value of gold would have to be defined in order to convert various paper currencies. If the original Bretton Woods agreement were to be used as a model, we first divide the respective sizes of each central bank balance sheet by its corresponding official gold holdings. For example;

The Fed reports official US gold holdings to be roughly 8,100 metric tons, or about 286 million ounces.

The US Federal Reserve’s balance sheet liabilities (private banking system reserves) are approximately $2 trillion.

Therefore, the US dollar would have to be pegged to gold at somewhere around $7,000/ounce.

Aggregating the gold holdings of the ECB and the legacy central banks that comprise the Eurozone would imply a $6,300 gold price. Again using the Bretton Woods system as a model, the US dollar and Euro might be designated as “global reserve currencies” because they could most easily be converted to gold. The remainder of participating global currencies could then be made exchangeable into US Dollars/Euros at fixed, but amendable rates (floating foreign exchange rates)."

Tuesday, October 21st, 2008

Dear CIGAs,
Many people still do not get it. Gold is insurance against the consequences of the upcoming massive injection of liquidity into the global financial system.