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Here is the best answer out there from Jim Sinclair:

My Dear Extended Family,

“QE to Infinity.” Infinity defined as the low .7000 on the USDX.

Every reason for gold’s decline from $1900 so accepted by the talking heads has gone SPLAT!

1. Sell gold because the dollar is strong. Yeah, on the downside.

2. Sell gold because the Euro is weak. It looks like the euro is going to be wearing its necklace of gold valued in the market in the 1.40s.

3. Sell gold because the US central bank is going to taper, which means tighten. That turned out to be totally foolish.

4. Sell gold because the US economy is going to improve. Yes, it is improving on the downside.

5. Sell gold because the stock market is going to break and take gold with it. Break to the upside is more like it as has all stock markets in similar liquidity situations.

6. Sell gold because the bond market is going to break wide open and take gold with it. Right now 10-year bonds look more like 2% or less than the 4% all the talking heads were predicting.

7. Now gold returns and exceeds it old high.

8. Now good gold shares put on bull markets.

9. Now the shorts in gold who were fat, happy and uncaring will pay the paper for the hubris.

10. Now the gold shorts in good gold company shares that are complacent in their positions will get the spiritual experience they well deserve.

11. Now the bull market in gold is far from over.

12. Now it is clear that those in the community that verbally hammered gold with            their sub $1000 predictions in their writings repeatedly tried to help it lower. Now to the dickens with them.



jsmineset.com, September 18, 2013

Time to move onto the next diversions; the debt ceiling problem and who will replace Bernanke? 

The withdrawal of Larry Summers from consideration for the Federal Reserve chairmanship carries no significance.

This is all a farce. They’re both of the same ilk.

You think they’re going to put anybody in there who would make a difference? They’re all just lapdogs for the establishment.

– Jim Rogers, Money News, September 18, 2013

A quick summary of today’s events:

Gold’s best day since January 2009

5Y Treasury’s biggest yield drop since March 2009

USD’s 3rd worst day in a year

Homebuilder’s biggest rise since June 2012

New all-time highs for Dow and S&P

All along Jim Sinclair maintained that the Fed can’t cut back on QE.  He coined the phrase, “QE to Infinity” and it looks like that’s what we’ve got – until the dollar tanks.

After the Fed’s announcement yesterday, the dollar fell one percent.  That is an astounding drop.  The Fed has shown itself to be an Emperor with no clothes.  All they can do is jawbone and print money.  Think about it – the Fed is implying that the economy needs a trillion dollars a year of new money creation to keep from tanking.  This is what we have been writing for months now.  We pointed out the obvious; something has to give, either the dollar or the economy.  The Fed can’t support both. Below is an article from Jim Sinclair:

Just what you have been saying for years – the QE will continue, no matter what!

CIGA Wolfgang Rech

“While Congressional members and economists push their pick for Fed chair, international investor Jim Rogers tells The Daily Ticker: it doesn’t matter who Obama picks because all Fed Chair candidates “are lapdogs for the establishment.” He expects any new Fed chair will continue current policy, which he says is “insane.””

Fed Chair Hopefuls Are “Lapdogs for the Establishment”: Jim Rogers By Bernice Napach | Daily Ticker

At last count, more than 350 economists, 38 female House Democrats and about 17 Senators have signed letters to President Obama urging him to nominate Fed Vice Chair Janet Yellen as the next Chairman of the Fed. She emerged as the frontrunner for the job now that Larry Summers, a former economic advisor to the president and Treasury Secretary under President Clinton, has withdrawn his name from consideration.

While Congressional members and economists push their pick for Fed chair, international investor Jim Rogers tells The Daily Ticker: it doesn’t matter who Obama picks because all Fed Chair candidates “are lapdogs for the establishment.” He expects any new Fed chair will continue current policy, which he says is “insane.”

“They should stop all of this, printing $1 trillion every year,” says Rogers, author of “Street Smarts: Adventures on the Road and in the Markets.” He explains: “The world will suffer very badly, very badly when this comes to an end. It’s an artificial sea of liquidity.”

jsmineset.com, September 17, 2013

This is similar to Lyndon Johnson’s Guns and Butter – or today’s equivalent, Obamacare, Welfare and the War on Terror.  The result in the 1970s was crippling inflation and a rise in gold of over 24-fold and silver over $45 an ounce.  Yes, history is repeating itself IN SPITE OF MASSIVE MANIPULATION of the precious metals market.

It should be obvious that the favored banks (JPMorgan and Goldman Sachs and friends) had inside information and they knew what the Fed would announce, long before today.  They engineered the big drop in gold and silver this month and went long as they led the mindless hedge funds to the (paper) slaughter.  They should ALL go away!  There are no good guys here, on either side of the trade.  (See Zero Hedge articles, below)

Who Leaked The FOMC Statement To Gold Traders?

Submitted by Tyler Durden on 09/18/2013 – 14:42

Beginning 3 minutes before the release of the FOMC Statement, gold spot and futures prices began to rise notably.

Bonds did not. Stocks did not. FX did not. Around 4300 contracts changed hands in the Dec Futures – massively more than average volume – before the statement came out and drove prices further up. In those 3 minutes Gold prices jumped $11… so the question is – lucky guess… or which big bullion bank got the nod?


The Machines Win: Within Milliseconds, The Move Was Over

Submitted by Tyler Durden on 09/18/2013 – 14:52

We hope everyone is enjoying the spoils of war from reading the FOMC statement and buying appropriately. Of course, as Nanex shows, unless your trigger finger hit that big green button within a millisecond or so, you missed the entire move…

And here is what Bill Murphy wrote below about the “inside information” at LeMetropole Café:


FOMC leaves pace of asset purchases unchanged at $85B a month The FOMC statement noted that while the downside risks to the outlook for the economy and labor market have diminished since last fall, the tightening of financial conditions seen in recent months, if sustained, could slow the pace of improvement in the economy and labor market.It added that it has decided to wait for more evidence that the economic recovery and improvement in the labor market will be sustained before adjusting the pace of its asset purchases.The only dissenter today was Kansas City Fed President Esther George, who remained concerned that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations. * * * * *

And, the answer IS (to The Gold Cartel trading on inside information): a resounding YES!

For the second time in a three-day trading period there are now two blatant examples of trading on inside information. All that has to be done by the CFTC is to get time and sales on whom the major buyers were on Friday afternoon and in the hour before the Fed announcement today … and check to see if they are one and the same people.

Not surprisingly the beaten down prices of gold and silver soared on the very unexpected news. The price of gold rocketed to $1350, while silver leaped to $22.67. Both made stunning moves off the lows and then went into capping mode (before taking off again).

Not surprisingly the beaten down prices of gold and silver soared on the very unexpected news. The price of gold rocketed to $1350, while silver leaped to $22.67. Both made stunning moves off the lows and then went into capping mode (before taking off again).

While this is much needed pleasant news for our beleaguered camp, the whole deal stinks to high heaven, as pointed out by the GATA camp. Think about it. The widely followed gold price is still some $60 to $80 lower than where it was a couple of weeks ago. The Gold Cartel set this entire two-week hit job up because they knew what was coming from the Fed, quite frankly as many of us suspected. They wanted gold off the investment radar screen when the announcement was made and they succeeded in doing so. Can you imagine where the price of gold would be today in a free market or if the price was where it was two weeks ago before the announcement. We would be looking at $1500 bid this afternoon and the talk would be about the inflationary impact of the Fed inaction. Instead, so what from that point of view … due to the lame price.

Gold has now leaped to a high of $1359, while silver rose as high as $22.90. The gain in gold as substantial as any in recent years with The Gold Cartel’s 2% Rule getting blown out of the water.

We are facing a shutdown of the government and a default without new funding by the end of the month.  All the ducks are lining up in a row for a big, big move up in gold and silver.  As was to be expected, business the last few weeks has been way, way down.  People never buy at the bottom.  They sell or step aside and wait.  Things are about to get interesting as the moving average hedge funds and momentum funds start to unload their short positions.  JPMorgan and Goldman Sachs will make hundreds of millions, and you, the retail buyer will sit around and wait for prices to go much higher before you decide it’s finally safe to go back in the water.

After a day like today, it should be obvious that this is not your best strategy.

Enough of the bad news and it is very bad, even if you own a lot of gold and silver.  This will not end well, but I have a cheer-you-up short video below for you today.  Watch it!  I promise you, it will make you smile and tug on your heart strings…

A baby sea lion climbs on a boat and gets comfortable.

Check out the following article below from King World News:

Dave from Denver (and for me a reason why The Gold Cartel has been so manic about driving the price of gold down. This potential has to have them privately petrified)…

This whole piece is pretty unnerving, but this part is terrifying (if you’re worried about systemic collapse):

The average derivative/asset ratio at the top 3 banks (JPM, Citi, BofA) as of Q1 stands at 37.6x. This is higher than the average leverage ratio (32x) of Lehman, Bear Stearns and Merrill Lynch leading up to the 2008-09 recession. The average exposure of these 3 banks to interest rate contracts (% of total derivatives) is 78.7%. A mere 0.1% loss on interest rate derivative contracts would send these banks reeling, a 3.5% loss would wipe out all of their assets, and a 10% loss would exceed all US Commercial Bank Assets combined.

The derivative implosion in 2008-09 was largely confined to Credit Derivatives, which globally as of Q1 stand at $25 trillion, down from $58.2 trillion in Q4 2007 (note: US Commercial Banks still have $13.9 trillion in credit derivatives on their books…which is $213 billion more than their total combined assets). Interest rate derivatives are 17.6x this number which, under higher rates, could make this the largest financial bubble to burst in history. In sum, if interest rates continue to rise, the global banking system will likely be under unprecedented stress with failures virtually guaranteed.

King World News, September 17, 2013