Jim Sinclair – Why Gold Was Smashed Today & What’s Next

December 14, 2011, at 6:49 pm
by Eric King 

**FULL AUDIO OF INTERVIEW TO BE RELEASED AT 12AM PST. CHECK BACK HERE FOR THE LINK**

Dear CIGAs,

With gold trading down over $60 and silver lower by more than $2, today King World News interviewed legendary Jim Sinclair. When asked about the action in gold, Sinclair stated, “Statements made by Mrs. Merkel, in Germany, this morning would have us believe that both the US Fed and Germany’s influence on the ECB would result in a willingness to accept a severe deflation, rather than willingness to accept a severe inflation. The selling (in gold) sent some of the fundamental guys out of their positions in gold, which affected the technicals.”
Jim Sinclair continues:
“Technical analysis, when looked at, is really everybody looking at the same thing.  So the sellers are chasing each other trying to find the bid.  I believe that what started all of this is purely political in nature.  I firmly believe there is no political will, on the planet anywhere, but especially in the Western world, to invite a severe deflation.
As the deflationary forces continue to surface you will see the absolute opposite.  I firmly believe you are more apt to have QE to infinity than you are to welcome rising unemployment and declining business activity.”
When asked about the technical damage in the gold market, Sinclair stated, “It isn’t really longer-term.  The technical damage right here and now is something that from today’s lows could be corrected in a few days, easily repairable. 
You’ve got support between $1,549 and $1,577.  You’ve also got it overlaying $1,519 to $1,572.  There is every possibility that you’ve seen the absolute worst of this as we’re talking now. 
The most important thing is volatility.  One thing this shows you, and it increases continually, is this is the wildest chop we’ve ever been in, in the history of trading gold, in terms of ups and downs.  It means to me that gold is going to rise to prices even higher than I expected….
More…

 

Jim’s Mailbox

December 14, 2011, at 6:38 pm
by Jim Sinclair 

Hi Jim,

Sounds like the Fed has put easing on the back burner for quite some time.
Looks like the Fed is becoming the Grinch Who Stole Christmas!

Happy Holidays,
CIGA Black Swan

Dear Black Swan,

One week ago they organized major swap line for all EU members. That is increasing liquidity.

You and the market have fallen for the MOPE.

Jim


Bernanke Signals Fed Ready to Ease on EU Risk By Scott Lanman and Joshua Zumbrun – Bloomberg
Dec 14, 2011
Federal Reserve Chairman Ben S. Bernanke signaled he’s concerned Europe’s crisis will hobble a 2 1/2-year U.S. expansion that may need another boost from the central bank.
The Fed’s policy-setting panel, which met in Washington yesterday, said the economy “has been expanding moderately,” compared with the Nov. 2 assessment that growth “strengthened somewhat.” At the same time, the central bank added a reference to “apparent slowing in global growth,” and said that “strains in global financial markets continue to pose significant downside risks to the economic outlook.”
Bernanke and his colleagues may be considering more measures to aid growth and improve public understanding of Fed policy, which could be unveiled as soon as their next meeting taking place Jan. 25-26, said Julia Coronado, chief North America economist at BNP Paribas. The Fed reiterated that it expects joblessness to drop “only gradually.”
“They still see downside risks, so I still think they’re tilted toward easing,” said Coronado, a former Fed researcher who is based in New York. She said she expects a new round of asset purchases in the second quarter, or as soon as the January or March meetings should the economy deteriorate faster.
The “recent strength in data” allows Fed officials to “be a little more patient than they otherwise might be,” Coronado said.
More…

Congress Passes $662 Billion Defense Bill, Aka The NDAA

Congress just passed the National Defense Authorization Act in a 283-to-136 vote. 190 Republicans and 93 Democrats voted for; 43 Republicans and 93 Democrats voted "against." Prepare to be arrested, without charge, simply because someone "up there" believes you engage in "terroristy" stuff. Good luck proving them wrong.

Goldman Summarizes The Reasons For Today's Rout

Everyone still dazed and confused by today's market rout will be delighted to know that Goldman is none the wiser... Or rather, Goldman knows precisely the reason why the market tumbled.

Negative Lease rates continue/gold and silver bombed as Europe runs out of USA dollars.

Harvey Organ at Harvey Organ's - The Daily Gold and Silver Report - 53 minutes ago

Good evening Ladies and Gentlemen: Today the lease rate for one month lease on gold went to negative 1/2%.  In other words, the central bank pays the bullion bank to borrow gold. The following market indications are provided courtesy of the London Bullion Market Association Dec 05, 2011 GoldForward RateLease Rate 1 month0.79667-0.52257 2 month0.80500-0.41330 3 month0.81000-0.27610 6

Why You, They And — Hell — I Might Just Buy That Parabolic Move In Gold…

It may be just me, but it seems like majority of market participants are terrible at dealing with one of the rudiments of life as a human being; time. It is almost as if the herding man lives in constant contempt for his former self and dogmatic surety about his current convictions (whether they relate to past, present or even the future). If this hunch happens to be true, then it doesn’t take much to see the folly – for surprise surprise; as time passes the much-loved present conviction joins the realm of past regrets. So to thwart the arrogance of the gold bubble-top callers and the long-for-the-sake-of-being-long speculators here I outline why you, they and — hell — I might just buy that forthcoming parabolic move in gold.

More On The Undisclosed Netflix SEC Investigation

Earlier today, we noted that according to Disclosure Insight, it appears that following a response to a FOIA request, the SEC has disclosed that the video streaming company may be involved in some form of regulatory investigation commenced at a point in time after November 10, 2010, which has not been previously disclosed by Netflix itself. Following a flurry of requests to demonstrate just what an SEC response looks like in a situation such as this, below we present the formal response from the SEC, which contrary to what most people think, is more than just a regional athletic conference and sometimes also pretends to regulate criminal activity and other types of fraud.

Citi Near Term Stock Forecast: 9300 In The DJIA; 985 In The S&P; Sees Chart Analogs To Pre-World War Periods

Earlier today we presented one of the 12 forecasts by Citi's FX Technical group which saw gold reversing recent drops, and soaring to $2400 by H2 2012 and far higher later on. Naturally, one argument is that this is simply Citi talking their books, and that one should be short when a bank is pitching a long. Of course, that is a valid interpretation. On the other hand, it is also possible that the recommendation is nothing less than a contextual recommendation of the what the big picture would look like if the bankers' grand plan falls into place. And the plan is simple, and has been discussed extensively before here: namely, to push the market to that critical triple digit threshold at which point Congress and the population (most certainly including the "99" which just happen to have 401(k) and other pension funds) will beg Bernanke to print. However, the traditional resistance has been the market discounting precisely this, and refusing to sell knowing that when the market drops, it will eventually rise: a traditional Catch 22. Which is why stocks in the US have lagged the correction in China and Europe for as long as they have - this has not been a decoupling as is widely misunderstood; what it has been is a delayed realization that Bernanke will not print until market discounting fails, and stocks flush. Then and only then will "salvation" come from Saint Ben. Which is actually precisely what Citi is preaching. In the next two charts, we see its recommendations for the Dow Jones Industrial Average and the S&P, as dropping to 9300 and upper 900s in the S&P, at which point the Fed will have no choice but to intervene. It is in this context that the lift off of gold will take place, and where the previously stated targets of north of $2400 are quite feasible. Yet, ignoring the price of gold, it is Citi's ultimate conclusion that is most disturbing: the bank finds eerie similarities in the current stock market formation with previous charts, both of which eventually led to World Wars...



David Stockman's Thoughts on the Coming European Train Wreck

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