Pulp Non Fiction

[ Tuesday, December 14, 2004 ]


Gold Community Warning!


Author: Jim Sinclair

China has announced that it is considering the sale of U.S. dollar-denominated Federal Debt held as reserves by the Central Bank.

This comes on the heels of Russia's decision to consider doing the same thing as a means of shifting to Euro-based items. Keep in mind, central banks do not hold significant dollars as dollars, or euros as euros, but rather as debt instruments, so the reduction of dollars in favor of other currencies mainly means the sale of U.S. Federal Debt Instruments and the purchase of alternative debt instruments in their place.

Mark today, November 26th, as the end of the U.S. dollar as the reserve currency of choice.

The U.S. dollar is now trading directly on the 1995 low, having broken down the BEARISH NECKLINE of the Head-and-Shoulders of all time, with a measured move between .7300 minimum and .5100 maximum.

Intervention aside, the U.S. dollar dies once we have three closes below .8197. I would be floored if there is no attempt to prevent this here and now, as defined by next week. However, it is totally hopeless in my opinion, as no intervention can stop the crash of the common stock of the U.S.A., the U.S. dollar.

Hold gold -- your investment and insurance -- close to your chest, and do not listen to the pea-brains that have taken the place of the Prechterites within the gold community, possibly costing you the opportunity of a lifetime as they look for tops.

Gold shares will soon out-perform gold itself, as new and more knowledgeable international investors enter the smallest capitalized investment market on the planet, gold shares.

Avoid those juniors and major gold companies that have derivative risk. Do not buy the bull of "margin-free gold derivatives" as that is such spin, and even makes the U.S. government look like kindergarten spinners.

Change your mortgages immediately to a fixed rate from a floating rate. Make sure no debt you hold balloons in 2007. If you can pay down debt immediately, do it! If you do not own real gold, it is late, but there is time to buy some. Do not sell good, well-managed properties, shares of gold exploration and development companies that are free of derivative risk and have no insider stock-option plan, or royalty gold shares with the same criteria of excellent gold companies.

The next four years are going to be dillies.

Do not listen to gold-community nuts that spend their time always looking for tops.

art [8:25 PM]