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Today’s daily is EXTRA important. Please take the time to read it all!!!

As I write this, at 3:30 a.m., gold and silver are moving up fast and have recaptured all of yesterday’s losses.

Jim Sinclair issued the following announcement early last night:
The Most Powerful Body In Finance And What They Mean To You
January 30, 2012, at 7:37 pm
Dear Friends,  
I was interviewed today concerning the most powerful body in the financial world that now holds in its hands the near future of all markets, from currencies to commodities, based on a single edict to be given.
The interview is being processed and should be posted here later this evening.
This organization supersedes all governments and central banks today in terms of the financial power they edict. This organization can have a greater impact on your pocketbook than the FASB did when they killed “true value” accounting.
This body is made up of the key players of the five largest banks in the USA and other countries. This body by their actions this week will guarantee QE to infinity.
This is relevant to all your assets, yes all. If you have the time listen to it please do. If you don’t have the time listen to it please listen to it. If you don’t listen to it do not blame me when all hell breaks loose six months from now.
Not one word about this body was on the airwaves today, yet this group by a simple decision rules the financial plant. They will be making this edict in just a few days. They have to do it again later this year. It is then that you know what will hit the fan.
I feel this is it for jsmineset.com tonight. I do not want to write another word and detract from the revelations you will hear.
Your financial future, even if you have never heard of them, is in this organization’s hands. Check in later for the interview. If you don’t check in your finances might just check out.
Please remember you have been informed of this impending edict as a service to the community.
Jim Sinclair
I got up at 3:00 a.m. to listen to the Sinclair interview so I could address it in todays daily. I took notes of Ellis Martin’s interview with Jim Sinclair. Pardon the rather “random” nature of my notes – the interview was un-edited and rambled a bit, but here are the key points I took from the interview:
ISDA international swaps and derivatives association:
They decide what a derivative is. They will decide whether the five US banks go insolvent. The 5 banks control 97% of all credit derivative swaps.
They will decide whether the Greek event will be called a default. Insurance guarantying Sovereign Debt is called CDS, Credit Default Swaps. Greece is paying back .30 on the dollar, on their bonds, so how can that not be a bankruptcy? If the ISDA decides it isn’t, then it isn’t.
Who will determine the fate of the 5 major US banks? The 5 major US banks will. They will not rule against themselves. It will not be considered a default! The credit default swaps will not be called into action.
MFGlobal went broke on a 50% loss on Greece, when it was not considered a default, and the insurance wasn’t paid off. They were using client funds but felt safe with the CDS insurance, which was never paid off. And all because it was determined that it wasn’t a default, so no insurance was paid. All five of the banks would be bankrupt if a 30% event were declared a default since their obligations would be greater than all of their combined capital.   The ISDA will not call this event a default (since they are comprised of the five US banks).
All the guys like MFGlobal, the hedge funds that used client money, thinking they had insurance via CDSs, will go bust, just like MFGlobal, if the insurance isn’t repaid. Do we have to wait till Greek debt goes to zero before it’s called a default? The system is more at risk now than it was in 2008 due to the fact that more credit derivatives have been issued since 2008 than were involved in the real estate collapse. Instead of becoming more conservative, the banks became more reckless since the near-calamity in 2008. This industry, the ISDA, is more powerful than the governments.
What lies ahead? A repeat of 2008, but worse lies ahead. The only thing that can happen is to print paper to pay it off. Everything is being done to hold off the reality – just like when we pretended the mortgage-backed securities (MSBs) were fine. The dollar will go in the ash can as we use QE to fight this. QE3 was announced last week.
People don’t understand the fragility of the system. Since the ISDA will rule that “the credit event is not a default,” we will march forward to a point where there is nothing more to do, as Greek debt goes to zero. At that point, the can can’t be kicked further down the road. All this in the name of more profits for the 5 big banks.
Investment consequences:
QE is good for liquidity. Liquidity is good for general equities. What’s good for gold is equally good for equities (QE3 and international QE3). Eventually there will be another bank rescue. Everything possible will be used to put this off during an electionyear.
Why aren’t general equities not going through the roof with the announcement of QE3? They should be! Because of this event.
Historically, always the main motivator of the equities market is liquidity. The reason we came out of the bear market in 2009 is QE (liquidity). The reason we have been able to hold 12000 Dow is liquidity. QE is good for gold, good for general equities and negative for the dollar, but it is not a solution for anything (it is a bubble making mechanism, as in the real estate bubble, etc.) It is a bubble maker!
Is Greek debt a Sovereign Default or not? The 5 major US banks hold 97% of the insurance on default on the Greek debt. More liquidity, not less liquidity is forthcoming. The Fed provided $500 billion to buy euro debt. QE was internationalized. Then they provided QE3. 80-82 is the top of the range for the dollar. They cannot kick the can much further down the road. The banks don’t have the capital to pay off the debts – the CDSs they sold to insure Sovereign Debt. They have created an even bigger bubble than 2008. We have a year or two left, at best. (This matches John Williams’ 2014 time frame for the onset of hyperinflation.)
Gold will perform better if general equities are performing well.   This will not transfer to mining shares, where there is so little liquidity that all of the shares combined have a smaller market cap than IBM.
For those of you who didn’t follow Jim Sinclair ten years ago, I would like to point out that it was Sinclair alone who WARNED OF THE IMPENDING COLLAPSE OF DERIVATIVES AS EARLY AS 2004, FOUR YEARS BEFORE THE EVENT.

Sinclair’s father was the legendary Bert Seligman, who was considered the most shrewd and successful stock investor of his time. He passed all of his knowledge down to his son, Jim who has owned a clearinghouse, a stock brokerage and is the CEO of a large African gold mining company. Sinclair was considered for the position of Secretary of the Treasury in the Reagan Administration and was hired to help the Hunt Brothers liquidate their silver in the 80s. He is not some pantywaist, he is the real deal and when he issues this kind of warning, I listen carefully and ACT.

Jim Sinclair also pointed out that the large hedge funds can “paint the tape” and influence Technical Analysis. JPMorgan is constantly forcing gold and especially silver down to critical moving-average levels to get the technical analysis people to sell off their positions. Then they can swoop in and buy up the assets on the cheap, and they do just that. Are you listening, Larry Edelson? Your charts will fail you when it comes to your TA and gold and silver. Gold and silver will NOT collapse because of the new liquidity (QE3 and to infinity) that is being shoveled into the system. You will be right about general equities, they will rise, but you are wrong about gold and silver and will have done a great dis-service to your followers by scaring them out of their metals by virtue of your charts.

My problem with general equities is that they pay off in dollars and the dollar will be sacrificed with the QE that is necessary to keep the system afloat. Making more dollars on your stocks will be preferable to not making more dollars, but if the dollar’s value has been cut in half, it will be a hollow victory. I still prefer gold and silver, and by a long shot!

So there you have it – gold and silver, UP. General equities, UP. The dollar, DOWN. The can will hit the wall within two years. The dollar’s days as the world’s reserve currency will end.

Remember what Sinclair said:
This is relevant to all your assets, yes all. If you have the time listen to it please. If you don’t have the time listen to it please. If you don’t listen to it do not blame me when all hell breaks loose six months from now.
You can find the entire audio interview link on the JSMineset.com website and on YouTube:

Breaking News Ellis Martin Report with Jim Sinclair
Breaking News Ellis Martin Report with Jim Sinclai

Andy Hoffman sent me the following take on Sinclair’s interview:
The Impending Undeclared Default Of 5 Major US Banks

Sounds like we have 10 more MF Globals in the next few months because the firms that think they have hedged their Euro debt with credit default swaps realize that their hedging is worthless as it will never pay out. Greece 30% agreement is announced…banks owning Greek debt are suddenly insolvent when insurance doesn’t pay out, then everybody realizes that their Italian, Spanish, and French bonds will get the same treatment, they’ll get 50% haircuts…and not be able to collect their insurance. I would imagine as the holders think through the dominos, they’re only holding the debt because they expect the insurance payouts on the derivatives – if/when they PIIGS fail. That would cause dumping of Italian and other PIIGS debt.