There''s no inflation ... unless you open your eyes


By Jim Sinclair
Saturday, May 15, 2004

Here I am reviewing a host of material from bearish gold
advisers and "trade everything always" hustlers and I can
no longer contain myself.

That's because on the right side of my desk is a report
on the COT (positions of large and assumed-to-be
commercial traders) and the Saturday edition of
Investor's Business Daily.

You people in the Gold Community are being used and
abused! Once again you have fallen for a manipulation
of technical formation necklines and taken it hook, line,
and sinker. You are bailing out and the commercial
interests are buying the supply you are offering to

Stop your retreat and at least face the enemy!

Wake up to the outrageously bullish fundamental
case for gold, which is getting more bullish every day.
What's happening now is exactly what gave you the
spectacular 1979-80 price explosion, which should
at least prompt you to STOP your selling.

If you fail to hand your positions to COT, then gold
will vault itself directly over $433 and above $480 so
fast you will not believe what you see.

A Golden Comet from Down Under, Mo Town's Mr.
Lee, sees clearly the doers of the dirty deed when
he says: "COT is the least short of gold since July
2003. Largest speculators are the least short of gold
since July 2003. The positions held by both parties
are at a point of reversal along the trend line defined
at both the uptrend line and power downtrend lines
of the herewith faxed chart. These guys are using
this decline --in all probability sponsored by them
--to cover their shorts, reverse their stance, and go

Well, let me say this, Mo Town: This game is for
billions. People commit crimes for $50. What do
you think is going on?

Golden Comet Mad Jack MyMoney, reviewing these
same figures, says: "COT has recognized the
fundamentals of gold and is reversing their positions
and getting long and longer. COT is joining Dr. No,
Chung Phat, and ABX on the buy side. How many
more contracts does COT have to buy to start pushing
the price of gold higher? They have increased their long
position by 31,122 contracts since the price of gold
dipped under $380."

Let me tell you, Mad Jack, that the answer to that
question is simple: They DO NOT have to buy ONE more
contract to take the price of gold over $433. All the
Gold Community has to do is STOP SELLING to them.

These guys/gals have manipulated the charts and the
media and published false flag analyses, and the gold
guys/gals have fallen for it. The hoard of gold advisers
has let the community down totally and do not deserve
one cent of your money. To rehire these boobs is to do
yourself and this community a disfavor.

When gold sells over $480 this summer, demand your
money back. Fire these idiots now and forever. Stop
going to any site that carries their nonsense before
you don't have enough money to pay for the electricity
to run your computer. Listen to me. STOP your
selling and watch gold fly.

I am conservative in predicting 4 percent inflation.
If the present totally massaged, revised, misleading, and
politically manipulative indexes read 4 percent, do you
have any idea what that index would have read in 1979?
The answer is at least double.

Let's face it -- 4 percent inflation is to the U.S. dollar
what the ebola virus is to the human body. The idea of
a rally in the dollar based on the pitiful incremental
increases possible in the discount rate is so foolish that
I cannot imagine why any commentator would pass that
assertion on to his readers.

Whatever demand might arise from the carry trade will
be buried shortly by those who sense the slowing
down of the momentum of the U.S. recovery and who
will seek the demand developed by the carry trade to
offload unhedged dollar positions.

If Richard Russell meant the carry trade when he cited
demand for dollars to pay off debt, with all due respect
he is still wrong because he is looking only at the
demand side and not the mountain of unhedged dollar
positions out there that will land on the USDX the
second they see confirmation of the developing
slowdown in the momentum of the U.S. recovery. If
Russell makes a pronouncement on the Dow, I will not
go against him, but on this he is dead wrong.

Economic currency factors for relative economic
strength selection where trends are concerned are
NOT arithmetical comparisons of index reports. The
raving "here today, gone tomorrow" currency idiots will
buy the dollar and sell the euro based on what the
U.S. manufacturing index does in comparison to the
Euroland index.

God help the USDX when it becomes apparent that the
rate of recovery in the United States is rolling over
and down before the election.

No matter who wins the election, what do you think will
happen to this economy after the election with oil then
over $55 per barrel? Don't kid yourself for one minute.
The100 percent war footing, tax relief, monetary easing
economic phenomenon that we are seeing today is an
economy on amphetamines with no prescription renewal
in place.

After the election the United States will return to
economic contraction and this huge rally both in
economic statistics and hot stocks will go down in
economic history as the death rattle of Uncle Sam.

Who knows -- the watershed new issue might well be


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Phoenix, Arizona 85032
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