Have you ever considered how bad it must really be out there if the Fed and gold banks are working so hard to paint gold bearish and the US dollar bullish? It must fundamentally be the worst of the various economic crises in my more than 50 years in gold.

There has never been this level of effort to attempt on all fronts to discredit gold. That must reflect the real and dire condition of the balance sheets of the Western world financial industry. Anyone with eyes in their head can see this move has been contrived. In my opinion profit on the short side is a secondary motive.

Today is setting new records for the number of incoming emails that are definitely X rated. The latent and absolutely vicious p hatred in people is also revealing.

- Jim Sinclair, Jim's Mailbox, January 4 2013

Yesterday and today's pre-planned bombings of gold and silver were hideous ... as the cabal forces used the cover of a namby-pamby Fed minutes release, which will quickly disappear into oblivion in the weeks ahead.

- Bill Murphy, LeMetropoleCafe.com, January 4 2013

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Fed 'trying their damnedest' to hold gold down but metal will win soon, Sprott says

Submitted by cpowell on Mon, 2013-01-07 02:23. Section: Daily Dispatches

9:20p ET Sunday, January 6, 2013

Dear Friend of GATA and Gold:

The Federal Reserve is "trying their damnedest" to force the price of gold down and create volatility to scare investors away, Sprott Asset Management CEO Eric Sprott tells King World News tonight, but gold has a growing number of friends around the world and he is confident that the physical market will prevail soon. An excerpt from the interview is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/
Entries/2013/1/6_Spr...

CHRIS POWELL, Secretary/Treasurer

Gold Anti-Trust Action Committee Inc.

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In The News Today

January 6, 2013, at 5:45 pm
by Jim Sinclair

Jim Sinclair's Commentary

I consider Arabian Money to be a sound source of information.

Some say you cannot fight the US Fed. Right now there is battle setting up in the bond market of the usual homespun vigilante suspects versus the Fed and QE. Maybe you can't fight them, but there are forces out there now due to the transition of economic power to other CBs that not only can fight major other central banks, but could flatten any central bank anywhere, if such was determined to be in their best interests.

The BRICS and Euroland could be formidable in this pending battle. You know that we are in a currency war, and have been for years. The old lion is the US dollar and the new, very rich, and wise guys on the BRIC block are the young lions. My money is on the young lions.

This is where the battle is headed without any doubt. The euro battle may be over regardless of ZH sensationalism.

China plans to double gold consumption in three years, how high will gold prices go now?

Posted on 06 December 2012

China's Ministry of Industry and Information Technology announced that it expected Gold consumption in the country would be running at more than double national gold production by the end of 2015, more than double Chinese gold consumption forecast for 2012.

According to the MIIT statement, domestic demand is set to surpass 1000 tons by the end of 2015. It said this would 'widen the fundamental market shortage' and noted that the shortage of supply will persist in the coming few years as domestic gold supply 'might only reach 450 tons by that time.'

Official gold policy

The ministry promised: 'In order to strengthen the gold industry the government will increase gold mine investment; speed up industry consolidation and international cooperation. It also said it would 'develop gold trading platforms and investment variety (presumably meaning ETFs).

'With regard to acceleration of industry consolidation, the government aims to lower the number of gold producers in the country to 600 companies by the end of 2015 from the current 700. And, the top 10 gold producers could be responsible for 260 tons of total output, up from 100 tons, by the end of 2015.'

ArabianMoney readers will not be too surprised to hear that China now has big plans for gold. Only recently we published the thoughts of 'Mr. Gold' Jim Sinclair who forecasts $3,500 an ounce gold and higher is coming on the back of Chinese demand (click here).

Jim Sinclair's Commentary

Remember regardless of all the BS flying, the US Federal Reserve has no available option to stop or curtail QE. Should they do such a thing, financial Armageddon will occur in the longer bond market with an impact so great Western finance will not recover until 2035.

The screw up will be monumental in its Western world economic devastation that whatever Fed governor sits as Chairman will have to resign in total disgrace.

QE is going to infinity!

Money for Nothin' Writing Checks for Free

William H. Gross

January 2013

It was Milton Friedman, not Ben Bernanke, who first made reference to dropping money from helicopters in order to prevent deflation. Bernanke's now famous "helicopter speech" in 2002, however, was no less enthusiastically supportive of the concept. In it, he boldly previewed the almost unimaginable policy solutions that would follow the black swan financial meltdown in 2008: policy rates at zero for an extended period of time; expanding the menu of assets that the Fed buys beyond Treasuries; and of course quantitative easing purchases of an almost unlimited amount should they be needed. These weren't Bernanke innovations - nor was the term QE. Many of them had been applied by policy authorities in the late 1930s and '40s as well as Japan in recent years. Yet the then Fed Governor's rather blatant support of monetary policy to come should have been a signal to investors that he would be willing to pilot a helicopter should the takeoff be necessary. "Like gold," he said, "U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost."

Mr. Bernanke never provided additional clarity as to what he meant by "no cost." Perhaps he was referring to zero-bound interest rates, although at the time in 2002, 10-year Treasuries were at 4%. Or perhaps he knew something that American citizens, their political representatives, and almost all investors still don't know: that quantitative easing - the purchase of Treasury and Agency mortgage obligations from the private sector - IS essentially costless in a number of ways. That might strike almost all of us as rather incredible - writing checks for free - but that in effect is what a central bank does. Yet if ordinary citizens and corporations can't overdraft their accounts without criminal liability, how can the Fed or the European Central Bank or any central bank get away with printing "electronic money" and distributing it via helicopter flyovers in the trillions and trillions of dollars?

Well, the answer is sort of complicated but then it's sort of simple: They just make it up. When the Fed now writes $85 billion of checks to buy Treasuries and mortgages every month, they really have nothing in the "bank" to back them. Supposedly they own a few billion dollars of "gold certificates" that represent a fairy-tale claim on Ft. Knox's secret stash, but there's essentially nothing there but trust. When a primary dealer such as J.P. Morgan or Bank of America sells its Treasuries to the Fed, it gets a "credit" in its account with the Fed, known as "reserves." It can spend those reserves for something else, but then another bank gets a credit for its reserves and so on and so on. The Fed has told its member banks "Trust me, we will always honor your reserves," and so the banks do, and corporations and ordinary citizens trust the banks, and "the beat goes on," as Sonny and Cher sang. $54 trillion of credit in the U.S. financial system based upon trusting a central bank with nothing in the vault to back it up. Amazing!

***

Jim Sinclair's Commentary

I will be 72 shortly, so I can say this. Geezers are totally screwed. Retirees are simply cannon fodder. The society that fails to respect their elders is on a path to extinction. The society that puts its elderly in harm's way will not survive. The society that totally abandons its elderly is finished, but may not yet know it.

Western world society has lost respect for, put in harm's way and abandoned its elderly. Karma will be a bitch.

Banksters are not immune from Karma; in fact they are in its cross hairs.

Retirement no more: Median net worth at lowest level since 1969 recent study finds.

There may be a temporary jubilee with the notion that the fiscal cliff has been deferred for a few months.  The media is quick to accept anything for a victory but very little has been done to stop our marching path onward on this massive debt spiral.  Many Americans continue to live in poverty with no visible exit.  The latest figures show over 47 million Americans on food assistance.  Many Americans as they enter their golden years are coming to fully rely on Social Security, a system that was on the table for being cut in the recent debates.  Since the Fed is creating asset bubbles and destroying fixed income investments, many older Americans are realizing that retirement is no longer a viable option given the rising costs in food, healthcare, and once again housing.  I see this on a monthly basis where you can spot older Americans in non-traditional and many times, temporary employment roles.  None of this intervention is ending up in household income.  In fact, when we examine real wealth the net worth of American's is down to the lowest levels since 1969 when adjusting for inflation.

A return home

Many baby boomers are being greeted with a grim reality.  Retirement may not be an option.  A recent paper from New York University highlights some dramatic figures for net worth data from 1983 to 2010.  The study found that 2010 median net worth in the United States hit its lowest point since 1969.  This research aligns with other figures we have found from the Fed Consumer Finance Survey:

More...

____________________________________________________

Jim's Mailbox

January 5, 2013, at 9:43 am
by Jim Sinclair

Dear CIGAs,

Markets are from day to day only exercises in human behavior. The gold market is a supreme exercise in how even a professional public works.

Last week someone yelled, "Fire in Gold's theater," and then in the middle of the stampede, someone looked back saying, "There is no fire." His words were drowned out in the din of the panic to all get out through two little doors. All the big high frequency trading computers were ablaze with the cry of "Front run the sellers in stampede, front run the sellers in stampede." The major HFTs known as the Squid was reported to have screamed, "Screw it that this is an illegal act, front run the sellers," (Front running is a criminal act by someone with a defined advantage from or on the floor, in or on the computer trading system acting in front of a legitimate buy or legitimate sell order for profit as the doer of the illegal act. The intent of front running is to force the legitimate buyer or seller to pay more on the buy and get less on the sell. Front running makes no investment decision, but only in micro seconds sets up a trade to block the buyer from buying or the seller from selling. The mechanical premise is that the legitimate investor "Muppet" will execute a buy or sell that then is offered to them at a slightly higher for the buy or lower price for the sale thereby making profit for the HFT. The thesis within the algorithm is that the stupid "Muppet" will pay a few cents more or sell it a few cents cheaper because there now is a bid or offer made by the high frequency trading machine in the volume that the legitimate order desires).

Even "Suave Locks," the praised CFTC commissioner was nowhere to be seen or heard.

Regardless, Mr. G yelled loudly while hitting a chime and ringing a bell all the time while dancing in circles, and said, "There must be fire because everyone is running. Look! The crowd is in tatters!"

Mr. A calmly and in a professorial tone reported to have issued another of his declared infallible proclamations stating there is a fire because look back 1400 years and see this is the exact time of day and day for a fire. Everybody run, the Mayan cycle calendar says this is the exact time for a fire. Anyone not heeding will certainly go up in flames. Anyone not heeding my words of aged wisdom is clearly an imbecile plotting with the legal system to get me. Anyone not heeding me will be banned from my private and extremely costly seminars wherein the total knowledge of all that is needed to be known of the experience of Mammon is available in exchange for lots money.

Back in the theater only a few calmly remained. Strangely, with such statements, chimes, bells, dancing and proclamation there is no smoke to be seen anywhere in the theater.

Those remaining are the Sitting Bulls.

Suddenly there was a rush back by paying theater clients that had not been injured in exodus to return to their seat for the rest of the movie. Unfortunately their chairs had been destroyed in the stampede out and they had to pay an additional fee for a tattered rug to sit on.

The movie is called "The Life and Times of Jesse Livermore."

Patience (or forbearing) is the state of endurance under difficult circumstances, which can mean persevering in the face of delay or provocation without acting on annoyance/anger in a negative way; or exhibiting forbearance when under strain, especially when faced with longer-term difficulties.

http://en.wikipedia.org/wiki/Patience

Jim

__________________________________________

In The News Today

January 5, 2013, at 9:42 am
by Jim Sinclair

Jim Sinclair's Commentary

Now our esteemed economic leaders have said rising prices is not inflation. It is not inflation because a shopper can elect to buy Spam instead of a steak or watch TV rather than go to a game. Listen to a radio if the TV costs after rising. Do nothing whatsoever if costs all over rise. This is the theory of substitution and is really being considered for social security inflation benefits and you know the CPI in time.

We will assume Spam and steak are out. TV is out and radio is in. Games are out and you can read the score in a day old newspaper you found on the ground. Voila! No inflation thanks to the substitution principle. Under this scenario if the entire population was to starve to death and doing nothing at all, it would totally eliminate the word inflation from all dictionaries.

This is not a joke. It is for real.

10 things you'll pay more for in 2013 From satellite TV to baseball tickets, here's what you'll be shelling out more cash for this year.

Steaks, hamburgers and bacon 1 of 10

Meat products are projected to cost up to 4% more next year, according to the U.S. Department of Agriculture.

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Gold Going to $2500, $3500

Thursday January 03, 2013 12:17

Then $4500... and by that time I think the US bond market will explode.

The US passed the 'fiscal cliff' by making an agreement to raise taxes over 600 bn and cut spending $20 bn. Wow.

In two months the US has to raise the debt limit. The Limit is already reached but the Treasury is using side measures to cover the deficit till then. Supposedly they can make a new deal.

Given the fact that the US is the only major economy with any solvency left, even with our immediate national debt at $16 trillion, and a president who is determined to borrow as much as possible in is his remaining time (guy has no real knowledge of much of anything really) ...that

The Gold price will ratchet up inexorably this year, I would be super surprised if it did not easily break $2000 a month or two after they automatically raise the debt limit for the US in two months. IN fact I think the gold price will break and hold $2000 and then immediately test $2500 for a time, before being beat back to the new low baseline, $2000, and during 2013, it will fluctuate between $2000 and let's be a bit more generous $3000. (Really my estimate is 2000 t0 2500).

But my more generous estimate will be probable. The US fiscal situation is out of control. As I stated it's the only major economy left with some credit.

Seriously. China. Laugh. They are fake, and have a banking system far worse than ours. Europe. Laugh. Need I say more?

Japan, laugh, they are on the verge of a bond crisis and using extraordinary measures now to fund their huge deficits, and have a trade collapse and are now even on the verge of saber rattling with China over those small insignificant islands.

And THEN, we talk the war potential in Asia over this and also the Mid-East. It's an easy call to say that gold is headed really to more like double its present numbers. Over $3000.

And here I am including a chart of our calls in the last two years, take a look at the arrows, the arrows were where we called either tops or bottoms.

Those are some incredible calls.

Subscribe to PrudentSquirrel.com for the full article.

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Giggling glee born of easy, greasy greed

Posted Wednesday, 2 January 2013

Higher taxes for millionaires? First ask yourself "How did they become millionaires?" Then ask yourself "If I'm so smart, how come I'm not a millionaire, too?"

Well, if this helps, I have noticed that one of the differences between us slovenly proletariat trash and millionaires is that they seem to have a lot of perfect teeth and nice haircuts. So, if you have nice teeth and hair, the data apparently shows that you've got it made, so relax! Haha!

If you don't have these, however, you will need to do it the appropriately-named "hard way", which brings up one Big Important Difference (BID) between us busted-out lowlife dimwits and the millionaires: We spent our money on pure gluttonous consumption, and had a wonderful time for a surprising number of years by virtue of racking up suffocating amounts of debt, whereas millionaires got their millions from profitably (as in compounding the money borrowed from a bank) investing their money in productive, profitable businesses, like making money by making things, or by mining things, or making money merely handling whole oceans of money, or making money by running this towering, engulfing deluge of money created by the evil Federal Reserve through some Wall Street scam, con job, bamboozle or 401(k), or in any of the rest of the gigantic financial services industry which produces, as best I can remember instead of researching it to find out, about 40% of all the profits made in America.

You no doubt noticed that I surprisingly did not use an exclamation point to emphasize such a huge, glaring fact that is destroying this country with some silly, low-IQ, pie-in-the-sky crap about how investing all your retirement money in the stock market is such a good idea when in fact -- in fact! -- it is a mathematically a guaranteed -- guaranteed! -- loser for the vast majority of trusting, gullible and embarrassingly ignorant people who are stupid enough to think that putting all their money, and their entire financial future, into the general stock market is a "good idea" despite a complete lack of successful historical examples, common sense and the mountains of evidence to the contrary, when, alas, it isn't, as the evidence had already proved, so it's weird anyone would do it.

Anyway, I remember when I found out that investing long-term in stocks is a Big Time Loser (BTL) for the vast majority of people, and a Small Time Loser (STL) for almost everybody else.

For me, it was the Five Stages of Shock. First, I was in denial, then, in the Second Stage, I was angry, then I was depressed, then I was angry again, then more angry, and then violently angry and scared out my Mogambo Freaking Mind (MFM), where I remain today.

And it's especially bad when dividends from owning stocks are taxed so highly. We're the highest taxers of dividends in the world!

Forbes magazine posted a blog by Austin Johnson on the new changes in taxes on dividends. The top corporate rate on the dividend is now 39.6%. The recipient of a dividend, if in the top tax bracket, is taxed at 39.6%, too, plus another 3.8% (the new Medicare tax), for a whopping combined tax rate of 65.8l%!

And if you just stupidly add up the tax rates, it comes to an 83% tax! This 83% tax rate is both highly shocking and, unfortunately, a ridiculous and useless concept, except as evidence that I have no idea what I am talking about, as if anyone needed more evidence of that! Hahaha! Come on!

But what else can people do, except buy stocks, with all the trillions and trillions of new dollars being first created by the evil Federal Reserve and then spent by the government? All these tons and tons of new dollars, busily working their economic way down winding, wending paths through an economy's worth of manufacturers, miners and farmers, workers, middlemen, retailers, owners and shareholders, and government itself, all of whom always have to wonder "What to do with all this money rolling in, and how can I get some more of it?"

And what other market can absorb literally trillions and trillions of dollars per year?

Ergo, the stock market has to go up because the government is not going to stop deficit-spending, and thus the Federal Reserve will not stop creating lots and lots of money, and there is nothing else to do with that much freaking money, except maybe buy bonds, which are, alas, Totally, Totally Toxic (TTT).

Get a load of this: With the price of bonds so high, the imputed yield on the 10-year bond is at a tiny, micro, miniscule 1.5%, when even the government's own ludicrously-doctored figures show that inflation in prices is over 2%, and the money supply is expanding by over 10% a year!

It's actually over 8% price inflation, as I gather from John Williams at shadowstats.com, who calculates inflation the old-fashioned way: It measures how much prices went up, more nearly matches the increase in the money supply.

So join with me in asking what kind of morons are buying bonds, thus losing real buying power in inflation-adjusted dollars, when history shows the average yield is about 6%, which means that when the interest rate gets back to its long-term average (if it ever does! Ha!), then the expensive 10-year bond you bought today, yielding a laughably low 1.5%, will have lost 75% of its cost? Yikes! Big loss!

And this does not even MENTION the reduced spending-power value of the remaining 25% of your dollars, thanks to inflation. All in all, bondholders will pretty much be wiped out! Yikes! Nice long-term investing there, dude! Hahahaha!

At this point, you may be asking yourself "What kind of an insulting idiot is this Stupid Mogambo Person (SMP) disrespecting the insurance and retirement investment industries who have to buy bonds because they have no choice, and who are getting screwed along with everybody else, except for the executives, of course, who are all, I am sure, making out like bandits? I hate him!"

Or perhaps you are even rubbing your chin, thoughtfully saying "I hate him, too, just like the guy in the paragraph above, but what he says makes sense! But I hate him nonetheless after listening to him blabbering and blubbering, rambling incoherently in that loud, stupid voice of his about how We're Freaking Doomed (WFD) because of the inflation in prices that will be caused by the inflation in the money supply because the evil Federal Reserve is forced to create more and more and more money and credit so that the federal government can continually deficit-spend us into a twisted, inflationary hell without the government having to embarrassingly try to auction off such astonishing, astounding, completely unbelievably massive loads of new government debt by actually competing in the credit markets, bidding against other sellers of new debt for a relatively limited pool of private funds, pushing interest rates To The Freaking Moon (TTFM), destroying America and the world. I mean, what kind of idiot IS this guy?"

What kind of idiot am I, you ask? Well, I'll TELL you what kind of idiot I am! I am the kind of idiot that that is so stupid that he fails at everything, and the only things at which I did NOT fail are, firstly, to finally recognize and accept my own inherent stupidity, and secondly to wisely acknowledge the correctness of my naturally-suspicious paranoia and cynical hostility towards governments, self-interested salesmen and self-proclaimed "experts."

Thus, I looked, instead, at history to find out what happened all the other times over the last 4,500 years when a government acted this stupidly (most of them, as it turns out), and to find the ultimate best investment that lasted through it all.

As an aside, I could have saved a LOT of time, learned the same thing about economics, just by reading Hazlitt's nifty book "Economics in One Lesson," or by simply going to Mises.org and getting -- free! -- the glorious wisdom of the Austrian School of economics, thanks to the foresight and work of Lew Rockwell, whom I never actually met, but who must be a busy guy because if I call him up and say to the receptionist "Hey! Ask Lew Rockwell if he will lend me twenty bucks!", I find that he's never available, and they won't even take a message anymore. So he must be a busy guy!

I can tell by the look on your face that you are not interested in hearing about another smart person who doesn't want to talk to me, either, and what you really, REALLY want to know is "What turns out to be, as the ultimate Idiot's Delight, the best investment during a period of government deficit-spending and money creation about which you have been shooting your mouth off until we are sick of hearing it?"

Well, since you asked so nicely, I am happy to report that you, too, can succeed financially despite any personal shortcomings, such as being a rude moron who dares challenge me instead of cringing before my towering intellect, and/or having severe behavioral difficulties so that your kids hate you because you are a clueless, terrible parent, and your boss and all your co-workers hate you because you are incompetent at your job which makes their jobs harder, and you naturally hate them in return, stabbing them in the back at every turn, sparing no venom, daring to mix metaphors right in front of their stupid little, hateful faces.

And you can financially prosper even if your spouse and your relatives and your neighbors all hate you, too, mostly because they are all a bunch of small-minded Earth-people whose serious lack of intellectual capacity cannot possibly allow them to comprehend the profound inherent safety and strong security, and thus an invaluable neighborhood asset, of having a Mogambo Big Beautiful Bunker (MBBB) in my backyard, bristling with enough firepower and miscellaneous armaments to kill them all a thousand times over if they give me a bunch of crap, which they, so far, don't.

And so the important, profound answer to the question "How to have a successful, wealthy future despite being a complete moron and your own government is acting like one, too"?

It is (drum roll, please!) to buy gold bullion and silver bullion!

And I think to buy oil stocks, too, because oil has absolutely the most net energy per unit of volume, and it literally comes out of the ground almost ready to use as a fuel. Wow! Talk about intrinsic value that will surely rise with general inflation, which is guaranteed by the Federal Reserve creating so much money and credit! How could oil NOT become more expensive?

So, I mean, investment-wise, how could things get any more obvious? Not stocks. Not bonds. Not houses. Not cash. Not anything but gold, silver and oil.

And speaking of "how" could something possibly be, ones wonders how could one NOT shout loud huzzahs, hoorahs, and heehaws to the highest of heavens, nor feel compelled to excitedly exclaim with a happy, giggling glee born of easy, greasy greed, "Whee! This investing stuff is easy!"?

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