The latest from Jim Sinclair, the importance of which cannot be overstressed. Also, it took me several reads before I finally understood completely what he is saying here. I think he writes that way on purpose. In an event. The gist is this:

Large powerful groups with deep pockets have figured out that the tide has turned and that gold is going up and the dollar is going down. They are going to start using all their manipulative powers to work with rather than against that trend. Sinclair gives us a set date when this will all start happening in earnest. And for those of you who have read Our Crowd as he advised, you know why he knows. So the dollar is going down and gold is going up if these powerful interests have anything to say about it. There is also always the possibility that they will lose control and things will spiral down much quicker than they would like. That is even better for the gold crowd. Bull

Dear Comrades In Golden Arms,

It is very important that the new definition of what the US currency is now be fully understood.

The US dollar is now under the pressure of the Carry Trade as well as all other factors.

The cost of US dollar simplified is a means between the Libor rate and the shorter term US treasury rates. The size of available funds is quite enormous according to your financial status. As an example, what limit would there be for a Goldman Sachs or JP Morgan?

The operation increases the amount of dollars in transactional supply. Transactional funds are funds in the marketplace versus (as an example) funds being hoarded by US banks now.

The Carry Trade is initiated and then covered by borrowing and shorting the US dollar to guard against downside risk of the basic long.

Carry operations are generally not short term in their outlook.

By borrowing the currency of carry and shorting it the risk is contained by buying the higher yielding currency instrument. If that currency risk is covered, a classic transaction is made.

The Carry Trade is in many cases far from classic, and are used to fund higher risk transactions.

Either way it puts supply into the US dollar transactional market and defined, active and strong trade interest to hold down the value of the carry currency, now the US dollar.

The Carry Trade generally puts a multi-year and extremely bearish factor on the currency selected by the carry traders as the carry currency.

A waning of Green shoots and the growing transparency of MOPE as illusionary encourages the Carry Trade. This nullifies the propaganda that a lower equity market or slow business recover to no business recovery is good for the dollar as a flight to safety.

I am sorry to say, but a US depression would be Christmas for a dollar Carry Trader.

The US dollar controls the price of gold, so therefore the more pressure on the downside of the US dollar, the more upside pressure on gold.

Since the Carry Trade is usually far from classic and seeks to fund higher risk transactions than the classic form, the inviting conclusion is the Carry Trade will now be long gold.

The count of days will not be far off the mark, if off the mark at all.

One thing is for certain: The US dollar is very far from a SAFEHAVEN under its new definition as the Carry Currency of choice..


Gold is going to $1224, $1650 and then on to Alf's numbers.

Respectfully yours,
Jim